Mr. Speaker, I will be splitting my time with the member for Ajax—Pickering.
I am pleased to have this opportunity to speak to this important motion before the House today. While the spectre of protectionism in the United States has been lessened in view of the development last night in the U.S. Senate, this issue remains in more general ways a matter of concern.
The buy American provisions of the American stimulus package reflect the genuine fears held by many Americans in the context of the current economic difficulties facing their nation and the world.
However, as experience has constantly taught us, the kind of protectionism that was envisioned in the stimulus bill prior to the amendment passed last night is precisely the kind of counterproductive measure that would worsen the crisis and not contribute to a workable solution for all who are affected across the world.
We in Canada must be especially vigilant when protectionism raises its head in the United States.
It was President John F. Kennedy who said, “Geography has made us neighbours. History has made us friends”.
This is, of course, very true, and our interdependence has been for the most part mutually beneficial. However, at times like this, when fear and uncertainty are prevalent, this close relationship and interdependency can create vulnerabilities that are very challenging when protectionism is promoted.
There is little doubt that the United States remains the single most powerful economic force in the world. That which affects the United States, like a stone dropped in a pond, will ripple outward and affect those far beyond its borders. It will also disproportionately affect those who are the most interdependent and who are geographically close to the United States. Canada is one of those countries.
I am reminded of comments by former Prime Minister Pierre Trudeau, who stated that living next to the United States was like sleeping next to an elephant: one is affected by every twitch and grunt. While the Senate has indeed amended the U.S. stimulus bill, the grunt remains something of concern.
The protectionist rhetoric that has been heard within the U.S. Congress and across the country is precisely the kind of talk heard during the Great Depression of the 1920s and the 1930s.
The buy American provisions, which were fortunately mitigated last night, were eerily reminiscent of Smoot-Hawley, which was a resolution that in the minds of most economists was a major contributor to the Great Depression.
Smoot-Hawley radically increased tariffs on almost a thousand manufactured items and agricultural products, causing an even further decrease in the value of stock market indices, and it prompted retaliatory measures across the world. These measures did not resolve issues either in the United States or abroad, but actually dramatically worsened them. The government of the day had the opportunity nonetheless to lobby then-President Hoover not to pass this legislation. The president was not partial to the legislation, yet the government of the day was silent, to the detriment of both nations.
While the current stimulus package has been amended and the most egregious protectionist measures have apparently been removed, I encourage the government to remain ever-vigilant on this file. While the Senate and the new administration of President Barack Obama have pulled back from protectionism, this spirit of withdrawal and defensiveness is still very much in the minds of millions of Americans.
The Prime Minister asserts his understanding of the Great Depression and certainly argues that it was trade barriers, not a stock market crash, that caused, in part, the Great Depression of the 1930s. While I will not here dispute his assertion, it leaves me to ask why the government has not been more proactive in ensuring that protectionist provisions were not included in the initial U.S. stimulus if it was aware of the threat posed by them.
Canada has greatly benefited from its relationship with the United States, in trade in particular. We are linked through countless agreements, most notable among which are the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement.
The North American Free Trade Agreement has revolutionized continental trade and investment and helped unlock our region's economic potential, yet at the same time the relative costs of Canadian products and services are increasing due to ongoing U.S. concerns about border security.
The Canadian Trade Commissioner Service, which expanded in 2003 under the previous Liberal government, with 40 consulates general, consulates, trade offices and honorary consuls located in major commercial centres across the United States, provides Canadian businesses with a network supplying the information, advice and support they need to advance their commercial interests, with increasing emphasis on cultivating partnership opportunities in foreign investment and in science and technology for Canadian firms to integrate into U.S.-led and other global supply chains.
All of these realities confirm what most of the U.S. already knows: our economic interests are inextricably linked with those of the United States. When we moved away from a predominance of trade with Great Britain following the Second World War, we turned to the only logical alternative, our neighbour to the south. Since then, we have arrived at a time when 60% of our imports originate from the United States and 40% of our exports flow to them.
We should consider ourselves fortunate that in prosperous times, while other countries push aggressively to establish increased and improved preferential trade links with the United States, Canada enjoys preferential access to the American market. The long-standing arrangement was at risk with the stimulus bill being considered in the United States, and while the offending measures have been removed from the bill, we must continue to monitor closely the emergence of such sentiments among Americans.
We need continued action from the government. We need it to be proactive and not, as it is in this case, reactive. We on this side of this House recognize that it is hesitant to do so, as it has been hesitant with every major economic decision since the start of the crisis. However, it is time to be vigilant and to be unafraid to assert our position in advance of protectionist measures.
In the words of the great thinker Søren Kierkegaard:
It is perfectly true, as philosophers say, that life must be understood backwards. But they forget the other proposition, that it must be lived forwards.
We cannot afford to forget the lessons of the past. Canadian livelihoods are at stake, as are the values of our natural resources and our partnerships with the United States. However, it is not simply enough to act now on information we have had for 70-odd years. We must act now to prevent this sort of reaction from occurring in the future. With the dawn of a new administration in the United States, Canada must act to establish the sort of relationship with the United States through which our position will be well known and clear in advance of any protectionist measures.
President Kennedy's words, as noted earlier, are profound. We share a common border and have much in common. While not always in agreement on many issues, United States and Canada are neighbours and friends. Our vast continent, with forests as old as time itself and resources scarcely imagined anywhere else in the world, is still very much a new frontier. There are new winds of change blowing across America. President Barack Obama is a symbol of such change. His willingness to hear our concerns and modify his position is evidence of this new reality.
Let us remember that we share so much that we must always work together for our mutual best interest and for the great benefit of all people of the world.