Madam Speaker, before I start my speech I will go a little further on the question that I just raised, because I think it is only common sense. It behooves everyone in this place to have a reasonable and respectful relationship with our trading partners around the world, regardless of who those trading partners are.
Certainly we are making a serious mistake if anyone in this place thinks that we do not have to have a rules-based trading relationship with the United States of America, our closest neighbour, our greatest ally and our largest trading partner. It is absolutely essential to our ongoing livelihood here in Canada. It is in the best interests of our workers, it is in the best interests of our businesses and it is in the best interests of all Canadians. The money generated from those economies helps to pay for everything that Canadians receive.
There has been some attempt, I believe a playful one, at trying to drive a wedge between the government, the American administration and the new President. That is sheer folly and sheer foolishness, because regardless of the political party in power in Canada and regardless of the political party or person in power in the United States, it is absolutely incumbent upon both administrations to have a good, solid, respectful relationship, because both countries benefit. That is not rocket science in any way, shape or form.
As you know, Madam Speaker, there has been a discussion in the House on this issue today. There has been some interesting debate, and the economic stimulus package is making its way through the U.S. congressional legislative process. We have been watching with great interest and trying to have as much influence as possible on the decisions that the Congress in the United States will make.
We need to put the measures that are moving through the Congress in perspective. Governments around the world have all found themselves in the same position. We are moving into turbulent economic times, and these are very recent changes. These changes occurred in the last quarter, and we expect they will deepen in this quarter.
When the G20 leaders met in Washington in November of last year, there was a wide range of views regarding both the nature and the seriousness of the situation. Certainly the situation had not progressed to the degree that it has today. In spite of these differences, however, the G20 leaders were able to agree to provide timely stimulus to domestic demand while also maintaining long-run fiscal sustainability.
In Canada we acted on our own commitment. On January 27 we tabled our economic action plan, a plan to stimulate economic growth, restore confidence and support Canadians and their families during this synchronized global recession. The action plan will stimulate the economy by building infrastructure, reducing taxes, freezing EI rates, stimulating housing construction, improving access to financing and strengthening Canada's financial system by helping Canadians through training programs.
Just as our economic action plan is meant to provide stimulus in Canada, the American Recovery and Reinvestment Act of 2009 is predominantly meant to stimulate the U.S. economy. The cost of that bill is now approaching $900 billion. It includes extensive tax cuts, assistance to state and local authorities for education investment, new health care investments, unemployment benefits, and infrastructure and energy investments.
However, there is another reality, the reality of the integrated North American economy of today. That stimulus package will also benefit the neighbours across the border, Mexico and Canada, and as long as everyone is contributing to the solution, we should be welcome within that stimulus package.
That is a clear message to the United States. Given the magnitude of the challenges we all face, no individual country is likely able to save itself without help from its trading partners. No individual country in the world is an island. Now is not the time to allow protectionism to rear its head. It will drive the economy downward; it will be a downward spiral not seen in the global economy since the 1930s.
We are extremely concerned that the broadening of the buy American provisions in the U.S. stimulus package will lead to other countries following similar protectionist policies and will create that downward spiral and fuel a greater economic crisis. That is why our government was making our concerns known to the American administration, legislators and other stakeholders long before the opposition was on this file.
One-third of all cross-border trade between Canada and the United States takes place with companies with a presence on both sides of the border, and two-thirds is within established supply chains. If either government were to introduce new barriers or preferences now, it would increase costs, cause delay and disrupt the way that businesses have organized themselves on the continent, thereby resulting in decreased North American competitiveness. I do not think any of us on the North American continent can afford that at the present time.
The Minister of International Trade recently met with U.S. trade officials and strongly indicated Canada's concerns about increased U.S. protectionism and the pressures and possible broadening of buy American provisions in the proposed stimulus package. He said, “We know from history that protectionist legislation winds up hurting one’s own economy and invariably hurting the economies around it”. In a follow-up letter to the acting U.S. trade representative, he wrote, “Canada believes that elements of ARRA now under consideration are protectionist in nature and contrary to the very goals of economic recovery that this bill is intended to address”.
That is the very start of what happened and how this issue has grown. It is important for all Canadians to know that we have taken our message to the American government. We have used all of the assets at our disposal, including one-on-one discussions with American legislators, congressmen and senators. We have certainly been in broad and thorough diplomatic discussions with the United States. We know how serious this issue will become if we are not able to nip it in the bud.
Certainly, we are not alone in our concerns and we are not alone in the lobby. America's other trading partners have expressed concerns. There is domestic opposition as well from companies as diverse as Caterpillar, which has a tremendous national market in the United States but also is an exporting company. There are many national business organizations and corporations that have now taken another look at the bill and said that it looks good on paper, because protectionism always looks good on paper, but what are the results of it? The results are that America would lose jobs, would lose opportunity and would lose income.
Canada has tremendous political capital with our closest friend and ally, the United States. We are optimistic that the United States will not proceed with a bill that would be damaging to international trade. After all, the greatest danger to global economic stability is that other countries would retaliate with protectionist measures of their own.
Last night's vote by the U.S. Senate to ensure that the U.S. stimulus package meets all international trade obligations is an encouraging sign. It is the first crack and an encouraging sign that our combined efforts are making progress.
At the G20 in November our Prime Minister pushed for progress on four initiatives to address the causes of the global financial crisis, initiatives that were ultimately endorsed by the G20 leaders. We pressed for action to address the crisis, commitments to strengthen domestic financial regimes, an agreement to conduct transparent international assessments of national financial systems, and a commitment to resist protectionism and maintain open markets.
We owe it to all of our trading partners to resist protectionism and maintain an open marketplace.
Meanwhile, Canadians and Americans share the largest and most comprehensive economic partnership in the world. We are one another's largest customers and largest suppliers. We are joined at the hip. We are dovetailed together. Anyone in this place or any other place who thinks that we are not dependent upon the American economy and the American economy is not dependent on us is making a very serious lapse in judgment.
Although our precise policies may differ because we are separate countries, our objectives as nations are similar. We seek prosperity, security and a good life for all of our citizens. The prosperity of our neighbours is inextricably tied to our own. Our two economies are so integrated that we must address this downturn together.
The hon. member for Kings—Hants has called upon the government to intervene forthwith and persistently with the United States administration and Congress in light of what he characterizes as growing protectionism in the United States.
As this House knows, the government has responded quickly and effectively to specific protectionist elements which appeared in the stimulus package being prepared by the U.S. House of Representatives and the U.S. Senate. It certainly does not stop there.
Canadians will be gratified to learn that a committed and gifted team of civil servants and Canadian diplomatic representatives have been working around the clock on this file engaging their counterparts on the other side of the border, but also working with their contacts in industry, trade and academia.
American newspapers, talk shows and radio phone-ins have been filled to the brim with debate on this issue, and yes, Canada can take plenty of credit for broadening the public discourse in America. Last night our friends in the Pearson Building received a note from our advocacy team in Miami. I will read a few lines of it.
“On February 4, Miami head of mission, Marcy Grossman, addressed the 100-plus members and guests of the board of the Greater Miami Chamber of Commerce, the leading business organization in this town with over 2,500 members. While the event had been arranged for Miami's head of mission to present the highlights of our newly available study of the Canada-Florida economic relationship, she used the occasion instead to deliver the Canadian message on buy American. Our timing was unusually felicitous because the Greater Miami Chamber of Commerce board also considered today its advocacy priorities for the U.S. federal and state authorities in the next few weeks. In addition, the members of the board's international advocacy group were already considering what the chamber wants to say on this stimulus legislation to the Florida representatives in the U.S. Congress. The result was an immediate invitation for us to provide our information to the key people today, so they can consider it in their approach to Congress on the stimulus package. We have already sent them a package containing the basic talking points, Ambassador Wilson's letter to the Senate leadership, and the letters from the CME, the Canadian American Business Council, and the U.S. chamber and industry associations”.
This morning the The Miami Herald published an op-ed piece by the respected Latin American columnist, Andres Oppenheimer, urging the U.S. Congress to kill the bill's buy American provisions. In it he observed that the exact details of the bill are far less important than the message it sends to the rest of the world. The column quotes Canadian Ambassador Michael Wilson and ultimately concludes:
If it gives U.S. trade partners an excuse to pass their own ''Buy national'' laws, U.S. exports will plummet even more and more U.S. jobs will be lost than this provision would help save. Now, please make sure that “Buy America” doesn't turn into “Bye America.”
This debate has come full circle certainly in the United States. We have made great headway in the House of Commons. There are more of us in agreement on this issue than there are in disagreement.
Our interventions and our interlocutors across the U.S. are being heard loud and clear. We have like-minded stakeholders in business, in industry and in academia. We have a situation where for the first time in many years, more than 100 major U.S. corporations have signed a common letter to the U.S. Senate leaders warning them about expanding protectionist measures, and their comments ring loud and clear in Canada as well as in the United States.
There are lots of people weighing in on this debate. One U.S. economist at the Peterson Institute for International Economics has concluded that buy American provisions in the bill will cost more jobs than it will create. Most of us are in agreement with that. Earlier this week President Obama spoke out about the need to avoid sending a protectionist message when trying to stimulate the economy and about the need to make sure that the provisions in the legislation will not trigger a trade war. Again, I think the Americans have come full circle on this.
Quite frankly, as the Minister of International Trade said last night, we are not out of the woods yet. The decision is yet to be made, so it is no time at all to give up on a full court press. It is no time to slacken the pressure that we are exerting on our American friends and colleagues. In many different arenas, in academia, in industry, in business and diplomatically, we have pursued this with great zeal on behalf of the citizens of Canada.
I would like to thank the hon. member for Kings—Hants for this timely motion. It is an important debate. It is a debate that needed to be had. It has allowed all of us in the House to clarify our position vis-à-vis whether we are going to move in a protectionist direction, join the downward spiral of nations that would destroy the economy of Canada and potentially of North America, or if we are going to stick to our formula that has worked for more than the past decade of rules-based trading that is fair and equitable to all of the players, that allows everyone in every economy to join with their allies, whether they be across the American border, the Mexican border, the Colombian border, the Costa Rican border or the Peruvian border.
The world is moving toward more free trade, not more protectionism. To turn our backs on that at the present time would be a serious mistake for our nation. It would be a worse mistake for our citizens, because we would let them down and be directly responsible for a greater loss of jobs than we are seeing in this downturn.