Protectionism may cause trade war with our neighbors

As President Obama visited Canada and flew across the Atlantic to the G-20 Summit (Group of Twenty Finance Ministers and Central Bank Governors) in London earlier this year, he was trying to figure out how to lessen the tensions from the “Buy America” language that crept into the $787 billion economic stimulus package debate.

The provision, which sounds enticing to beleaguered American workers, said that federal stimulus purchases had to be manufactured in the United States. When our foreign trading partners heard that, they started sharpening their swords for a new round of trade wars in retaliation for what they viewed as a new protectionist era in the United States.

Trade agreements, such as the North American Free Trade Agreement, have been a sore subject around union halls. Over the years, unions have pressed Congress to block free trade treaties.

Last week, Canada’s Ambassador to the United States Michael Wilson, addressed that very issue at the Association of Washington Business’ annual spring meeting in Spokane.

Wilson used the speech to warn against protectionism, he said “both countries benefit from free trade, and even though it can be difficult for people to understand, trade both ways actually creates American jobs.” Canadian government statistics show that 7.1 million U.S. jobs were created by Canada-U.S. trade, which has tripled over the last two decades.

Canada plays a major role in our economy. It is a larger market for U.S. goods than all 27 countries of the European Union combined, even though Europe has more than 15 times the population of Canada. Canada buys four times more U.S. goods than China. Last year, Canada was Washington’s leading market for non-aerospace goods, more than twice as large as Japan. More than 153,000 Washington jobs depend upon U.S.-Canada trade.

In 2006, bilateral exchange between Washington state and Canada increased 6 percent to more than $19.2 billion, with our state shipping $5.4 billion in goods north and the Canadians sending $13.8 billion worth of goods south.

While the numbers are skewed toward Canada, $8.4 billion comes to Washington each year in the form of energy — mostly electricity, natural gas and petroleum products. Ambassador Wilson pointed out that his country, not Saudi Arabia, is the largest supplier of oil to the United States, and unlike the volatile Middle East, Canadians are close, friendly producers.

At times, our two countries have sparred over lumber imports, but we share many of the same values. Both nations, for example, are working to cut greenhouse gases without destroying our economies and causing massive layoffs. The Saskatchewan Power Corp is refurbishing a 100-megawatt coal unit that can capture and pipe carbon dioxide to nearby oil fields. The carbon dioxide can then be used to pull up deep reservoirs of previously unreachable oil from geological seams, a technology that hopefully will become a prototype for the United States.

Just as importantly, our strong economic ties with Canada have forged a strong friendship. Throughout history, U.S. and Canadian troops have fought side-by-side in wars around the globe. Today, we stand together to battle terrorism and secure our common borders.

In Washington, our state’s Department of Licensing worked closely with the Canadians to establish the enhanced driver licenses to make border crossings safer and faster. The joint international project comes just as Vancouver is preparing to host hundreds of thousands of people for the 2010 Winter Olympics.

The ambassador’s point is that no two countries in the world share a relationship like the one between the United States and Canada. We are good friends, neighbors and trading partners who need one another more than ever in these trying times. He is absolutely right.

Hopefully, our elected officials will look beyond the raw spontaneous emotions that drive protectionism and realize we have too much at stake to trigger another round of trade wars. That won’t help American workers or our economic recovery.