Photo from www.draplin.com

Seemingly lost amidst the Olympic shuffle last week was an announcement by the Harper government on reaching an agreement with the United States that allowed for Canadian exceptions to the highly contentious “Buy American” regulations. The regulations, imposed last-year by the U.S. government, blocked Canadian manufacturers from bidding on almost $800-billion worth of contracts tied to stimulus spending by the U.S. government.

Given the high-profile nature of the spat and the political capital such an agreement should generate, it seems strange that the Harper government would downplay the announcement by burying it amidst Olympic fever. A closer look at the details of the agreement, however, indicate why this might be the case.
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On November 22nd, APEC leaders vowed not to raise trade barriers over the next 12 months to the delight of PM Steven Harper. For the past few weeks, Harper has been discussing the issue with world leaders in an effort to keep free trade alive during the economic downturn. He’s also managed to sign a free trade agreement with Colombia just this week. Harper maintains the leading cause of the Great Depression was a result of bad decisions made by policy-makers, one of which was shutting down borders to trade in order to protect domestic jobs.

So how will the Obama administration react when in takes office in under 2 months time? It’s no secret that throughout the 2008 election campaign, Obama promised to restrict free trade agreements which he blames for the loss of US jobs due to outsourcing. He also mentioned renegotiating major trade agreements such as NAFTA. At the same time, currently serving President Bush advocates the exact opposite – keep borders open and allow free trade to continue.
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