Tight Borders, Tighter Trade

"Buy America" is threatening to cast NAFTA into the forgotten steamer trunk stuck up in the attic, leaving Mexico and Canada wondering whatever happened to free trade and open borders. Keeping pace with the 'longest undefended border in the world' suddenly morphing into one of the longest defended borders of the new world, the trusting and mutually beneficial trading and economic relationship between Canada and the United States is fast deteriorating.

That U.S. economic stimulus package that has insinuated within it those 'buy America' steel and allied building materials provisions has crimped a long-standing bilateral trade whereby industry has become inter-related to a degree that it seemed at one time nothing could rent asunder. Protectionism can do that, and more. Canadian companies long accustomed to doing a brisk business with U.S. customers are seeing their futures suddenly evaporating.

The two countries may have a $1-billion-a-day trading relationship, but it's beginning to hiccough and falter, here and there. With some Canadian manufacturers understanding quite clearly that if they are to hope to maintain their customer base they will have to relinquish their proud 'made in Canada' status, and set up manufacturing sites in the United States. Not that there is anything new in this; it's what the U.S. has always tried to achieve.

NAFTA was supposed to be a trusted mechanism between three North American partners that would allow countries to maintain their origin-status and permit an easement of trade. Canada and Mexico have been attempting, diplomatically, to educate the new U.S. administration, but they're meeting a bit of Congressional resistance. Of course there's always the retaliatory tool, but it's a last-ditch cudgel.

Diplomacy can only go so far, however, and the truth is that despite years of lobbying to inform and educate their American counterparts, nothing seems to dodge the protectionist bullets that fly everywhere any time the economy suffers a set-back in the U.S., despite its stated commitment to free trade and enhanced business between the Continent's partners. The top executives, newly-appointed in the U.S., persist in displaying raw ignorance.

The "hardened" border that Secretary of State Hillary Clinton speaks so casually, yet meaningfully of, means a thicker, more difficult to penetrate border, closing down newly-opened opportunities, turning back several decades of progress. The passage of goods, services and travellers between the two countries has been deleteriously impacted, as the U.S. closes in upon itself, in its traditional mode of turtling-and-tilting against adversity.

Canada's business leaders are fuming, and with good cause. They would very much like the government of Canada to press home to the Americans that our trade relationship, our economic inter-relatedness, our position as the largest provisioner of fossil fuels and other energy sources to the United States, is also negotiable.