Officials from Canada and European Union have complained loudly that a provision in the House stimulus bill that requires American steel and iron for infrastructure projects violates the World Trade Organization rules. But guess what? They don't. The treaty allowed countries to make exceptions for government procurement for specific industries. The U.S. stipulated iron and steel. The EU--not to be outdone--stipulated drinking water, transportation, telecommunications, and energy. Canada stipulated steel, motor vehicles, and coal. So these complaints--and the similar outcry among corporate lobbyists in Washington--is base hypocrisy. And it's too bad that President Barack Obama is listening to them. Todd Tucker of Public Citizen gives the details in "Eyes on Trade." Read it.
Translated out of trade lingo, both Canada and EU give their nations' products much more generous preferences than Congress is even considering giving ours. While current U.S. laws (merely extended in the stimulus bill) give U.S. iron and steel a leg up over the foreign competition for transit projects, Canada and the EU give their firms a leg up over American companies and products on EVERY aspect of transit funding, and many other government purchases besides.
And, we're not criticizing them for it: why SHOULD decisions by democratically elected parliaments about how to best spend tax dollars on domestic infrastructure be subject to constraints imposed by international trade agreements? There is no "protectionism" at issue here. But, it is certainly hypocrisy--and perhaps a bit of opportunism--on the part of Ottawa and Brussels.
--John B. Judis