Today's entry is courtesy of an op-ed in the Toronto Star; the topic is the deal that exempts Canada from the 'Buy American' provisions of the US stimulus package.
Canada gives away the store in return for scraps from U.S.: In return for these meagre scraps, the provinces and municipalities have offered up temporary market access to U.S. suppliers worth an estimated $25 billion (Canadian). More ominously, Canada has bowed to U.S. pressure to permanently bind purchasing by Canadian provincial governments under the WTO Agreement on Government Procurement (the GPA).
The use of the word "ominously" suggests that we are meant to view this development as bad news. But it is only bad news if you adopt the point of view that taxpayers are your hostages, and that you are being forced to release them at a price that displeases you. The rest of us will be blinking in the sunlight and scarcely believing our deliverance.
Once again, we are obliged to make the point that the gains from participating in international trade take the form of imports. It is a good thing if we can import fresh fruit and vegetables in February at a price lower than what would have cost to produce them ourselves. And it is a good thing if governments can import goods and services at a price lower than what it would have cost to produce them locally.
The author gamely tries to make his case for why Canadian taxpayers should return to and embrace their captive state:
- "U.S. municipalities are not covered by its GPA commitments". Translation: "No fair! US suppliers still have their hostages!"
- "provinces and municipalities are now on a slippery slope." Translation: "We might lose our remaining hostages!"
- "If democracy had been allowed to run its course, Canadians would likely have rejected this unfair and detrimental deal." Translation: "If only we had a chance to crank up our lobbying machine, those taxpayers would still be manacled and blindfolded in our basement!"
What really disappoints me is that the author works at the Canadian Centre for Policy Alternatives. When a progressive think tank decides to intervene to defend the privileges of a small lobby group against the interests of everyone else, then there's something seriously wrong with our body politic.
eta: It should be noted that during a recession, there is a case for imposing 'buy local' rules - this was the original motivation for the Buy American provisions in the US stimulus package. It should also be noted that Mr Sinclair chose not to make this argument, possibly because we would then be obliged to abandon the existing procurement rules when the recession ends.