Commentary
The Dispute Over the U.S. Government’s “Buy American” Policy
Canada’s new ambassador to the United
States, former Manitoba premier Gary Doer, has pledged to make it his top
priority to eliminate the “Buy American” clauses associated with the American
stimulus spending. He promises to explain to American lawmakers that it is in
their best interest to allow “competition” in the awarding of government
contracts. In return, he is promising them that he will influence Canadian
governments not to take protectionist measures in regard to Canadian stimulus
spending.
The dogfight over the U.S. “Buy
American” policy highlights the real predatory nature of imperialist trade.
When it serves the big monopolies to penetrate the markets of their rivals they
demand “free trade”; when it serves their interests to keep their rivals out of
their markets they rely on protectionist laws. This has been the experience in
trade between Canada and the U.S. since the signing of the Free Trade Agreement
and the North American Free Trade Agreement in the late 1980s and early 1990s.
Since then, Canadian exports of wheat, softwood lumber, beef and other
commodities have faced non-stop challenges, tariffs and other trade barriers
erected by U.S. governments. Despite repeated rulings that these trade barriers
are illegal, they remain in place.
The veiled threats from Doer and the
overt threats of some of the provincial premiers of retaliation with “Buy
Canadian” policies attached to Canadian stimulus spending are not likely to
cause much concern south of the border. The size of Canadian stimulus spending relative
to American spending means that it is far more profitable for American
monopolies to maintain a “Buy American” policy than to abandon it. Furthermore,
many of the biggest corporations bidding on Canadian government contracts are
Canadian in name only, being branches of American
corporations. So the losses to American corporations from a “Buy
Canadian” policy would be minimal.
The dispute over the “Buy America”
policies illustrates the problems created for a relatively small economy
existing next door to the biggest economy in the world. It further illustrates
the folly of such a small economy trying to compete on an even playing field
with the larger economy. Further exacerbating matters is the fact that “free
trade” can never exist in an international economic order dominated by
capitalism. This is especially the case at the stage of monopoly capitalism
where the biggest capitalists control national states and use those states to
create an advantage for themselves and a disadvantage for their rivals.
From its inception as a British colony,
Canada’s economy has been based on the export of raw materials to a larger
economy and the import of manufactured goods, primarily from the same larger
economy – first Britain and now the U.S. As such, the Canadian economy is
extremely vulnerable to economic and political developments over which
Canadians have no control. There are some, including various provincial
premiers and some of the biggest trade unions, that
suggest that Canadian protectionist measures can address this problem. Others
insist that “free trade” policies are essential to the Canadian economy.
However, both positions are wrong. History has shown that neither protectionism
nor free trade serves the interests of the Canadian economy.
Protectionist policies during the first
half of the twentieth century did nothing to create an independent,
self-reliant economy in Canada. Far from it, they gave rise to a branch-plant
economy with the highest level of foreign ownership of any country in the
world. Similarly, the “free trade” policies of the last two decades have done
nothing except to further integrate the Canadian economy with that of the U.S.
Protectionism and “free trade” are, in reality, merely
two sides of the same coin – weapons of monopoly capitalist and imperialist
domination and plunder. So, to expect some different result would be naïve.
The problems confronting the Canadian
economy do not result, primarily, from the trade policies of the U.S. Rather, they result from the fact that the Canadian economy
is a capitalist economy. As such, the motive of production for “Canadian”
capitalists, as it is with capitalists anywhere, is the pursuit of maximum
profits and not the satisfaction of the needs and aspirations of the Canadian
people. Canadian capitalists have achieved maximum profits through the selling
of the land and labour of the Canadian people to the
highest bidder and that situation will not change so long as the Canadian
economy is a capitalist economy. An independent and self-reliant economy can
only be created if the interests of the working people are put in command. In
other words, it can only be achieved on the basis of organizing the economy on
the basis of scientific socialism.