Posted by: hobbesonafob | May 29, 2009

NAFTA = Not Always Free Trade Agreement

Although the 2009 Forum for International Trade Training Conference was not based on any of my academic interests, it was interesting to attend as an outsider. By “outsider” I mean that I was the individual who would drink at the open bar until I felt comfortable talking to anyone about anything (e.g. the economics behind the smuggling of cigarettes around my hometown Cornwall, Ontario – you’re welcome Department of Foreign Affairs and International Trade representative!).  

During times like these it was interesting to be an onlooker at a conference for international trade. The goal of the conference — well, one of them — was to reconfirm that the world is changing, but that we are now recovering from the economic fiasco. In other words, things will be tough, but keep doing your best. This view was shared by FITT, Export Development Canada (whose bread and butter is providing insurance for trade), and the Canadian Manufacturers and Exporters. Not to mention, that the hall was filled with individuals whose interests were inherently linked with international trade.

I think they all have a genuine reason to be concerned. 

The main worry was about Canada’s #1 trading partner: the United States of America. The “Buy American” provisions has caused problems. Most of those problems are not seen in the following image:

 

Go #$@* yourself Canada!

Go #$@* yourself Canada!

What this picture does not reveal is the story told by the Director of Corporate Affairs of IPEX Inc., Veso Sobot. Sobot described a construction site going through an inspection in the U.S. When the inspector asked where the pipes were from and a worker replied that they were from Canada, the inspector told the worker to rip the pipe out because it was not made in America. Not good. [Good: a self hat tip to me for not making a pun about laying Canadian pipe].

According to all of my leftist professors America was a giant empire built on neo-liberalism. What the hell has happened???

This story in the Economist not only highlights the impact of security measures on the border, but also the grumbling here:

Tony Clement, Canada’s industry minister, says all this risks provoking a backlash among his countrymen. It has already begun. The industry group representing Canadian manufacturers has identified seven bills with protectionist provisions making their way through Capitol Hill and is calling for Canada to threaten retaliatory action. On May 25th a member of Canada’s left-leaning New Democratic Party introduced a private member’s bill that would require the government to give Canadian companies priority when buying goods or services.

As a student of Economics 101, America’s reaction to the global recession does not compute.

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