The Obama Administration is going to review a provision that would only allow the use of domestic manufactured goods in the US$819 billion economic stimulus plan -- which could have a devastating impact on the Canadian steel and iron industries.
White House spokesperson Robert Gibbs told reporters Friday that "the administration is reviewing those provisions as part of the recovery plan" regarding the 'Buy America' clause.
However, he would not say whether the White House favoured the provision or not. He said Obama is aware of Canada's concerns and that the issue will be brought up when the president visits Ottawa Feb. 19.
"I don't think there's any doubt that trade is going to be on an agenda for a bilateral meeting between the United States and Canada. I think that would have been the case regardless of who those two participants were," he said.
Canadian Finance Minister Jim Flaherty, who is attending a meeting of western finance ministers and central bankers in Davos, Switzerland, says that the U.S. clause is the talk of the meeting.
"We need to provide stimulus to our economies and not go the protectionist route . . . which hurt a lot in the 1930s," Flaherty told 麻豆影视net.
He said there was consensus on that statement among both the finance minister and central bankers at the meetings.
Chris Braddock of the U.S. Chamber of Commerce told 麻豆影视net the clause would "definitely have ramifications for Canada."
He added that the provision would hurt trade with all of the U.S.'s major trading partners.
He also said that many manufacturing industries outside of steel and iron would be hurt the way the clause is written now.
Canada's steel industry exports about $7 billion every year, with a large chunk of that heading to the U.S.
The 'Buy America' has become a hot button issue in the House of Commons. A day after Liberal Leader Michael Ignatieff blasted the Conservatives handling of the situation, Liberal MP Ralph Goodale kept up the attack.
"It's not enough for the Conservatives to say that they expect the Americans to live up to their (trade) obligations," he said in the House of Commons Thursday. "How can we have any confidence this government will actually fight for Canadian producers and exporters.
Tory MP Gerald Keddy responded that it was not the time for "heightened rhetoric."
Prime Minister Stephen Harper told the House of Commons Thursday that the protectionist legislation could contravene the North American Free Trade Agreement and that it backtracks on America's "international obligations" to break down global trade barriers.
"I spoke to our ambassador about it yesterday and I know that countries around the world are expressing grave concern about some of these measures that go against not just the obligations of the United States, but frankly the spirit of our G20 discussions," Harper said.
