Honeymoon's over!

Baring his teeth under that photo-friendly smile, Obama is considering 'Be American, Buy American' as part of his stimulus package for the US of A. This causes a lot of concern, not only because, as Canadians, 55% of our goods are sold in the US, but also because this muscle-flexing could result in a further slowing down of economic cycles worldwide.

Our biggest trading partner, a signatory to NAFTA no less, now doesn't want to play by the rules. They want to be mavericks, they want to chart their own course, go it alone. Now, this may be a nod to patriotic Americans, but the rest of the world will be sinking deeper and deeper into a morass.

Speaking of NAFTA - remember, we have a long standing dispute with the Americans over softwood lumber. Our lumber (specifically in British Columbia, Ontario and Quebec) is subsidized by federal and provincial governments. The US thinks it is unfair and is fighting to levy other tariffs to countermand these subsidies. This, they claim, will bring up the prices to current market rates.

Have they conviniently set their principles aside for the time being?

Think about it - protectionism seems like an antithesis of capitalist America. It puts me in mind of what the British Raj did in India 200 years ago. They decreed that Indians could only buy cotton cloth manufactured in England. They took the raw material from India all the way to the Manchester mills where they wove the finished product and sold it to us at a cheaper price. I'm no economist, but it was obvious that our indigenous cottage industry floundered and couldn't keep up. Dirty politics?

Well, we are watching something similar now. Though the bill has yet to be passed, the undercurrents are dangerous. There is a lot of murky water underneath. According to statistics, in 2007 alone, Canada's trade with the US in iron and steel products equalled $5.8 billion. Tidy sum indeed.

I watched PM Harper on TV yesterday ranting about the unfairness of this potential move on the part of the Americans. Other politicians have denounced it too. As usual, Layton said something completely inane - why doesn't Canada follow in the US footsteps, he demanded, imposing a similar caveat on our exports?

What this move will do for Obama's Canada visit on 19th Feb is up in the air. I have a feeling protestors will line Ottawa's streets.

Coming on top of the threat of recession and stagerring job losses, this American policy can't be good news for the world.