Posted by: Rob | June 8, 2009

The Corn Laws Redux

The Corn Laws were a nineteenth century protectionist initiative by Great Britain.

The Corn Laws were import tariffs designed to support domestic British corn prices against competition from less expensive foreign imports between 1815 and 1846. The tariffs were introduced by the Importation Act 1815 and repealed by the Importation Act 1846. These laws are often viewed as examples of British mercantilism, and their abolition marked a significant step towards free trade. The Corn Laws enhanced the profits and political power associated with land ownership.

The latest iteration of the Corn Laws is, of course, the “Buy American” provision attached to the huge economic stimulus bills recently passed by the United States Congress.  The edict is, at base, that not a single dollar of stimulus can be spent outside the borders of the United States.

The effects of this measure are already being seen in Canada, which exports a significant percentage of its goods and services to the United States.  Conversely, Canada also imports goods and services from the United States.  However, as the rate of Canadian exports to the US declines, due in part to the “Buy American” provision, Canadian businesses, provinces and municipalities are getting a little upset.

Liberal leader Michael Ignatieff is now warning of a potenial backlash against the American trade policy.

Liberal Leader Michael Ignatieff warned American legislators Sunday their ‘Buy American’ strategy courts a trade backlash from Canadian municipalities.

“We need to remind the Americans that we’ve got a multibillion-dollar municipal and provincial procurement market in this country,” Ignatieff told the municipal delegates. “Americans have unfettered access to it right now, but if they shut down their markets, there will be consequences.”

The Federation of Canadian Municipalities has already taken a vote to proceed with action.

Representatives of Canadian cities voted narrowly on the weekend to retaliate against American firms that have stopped buying Canadian goods unless the U.S. “Buy American” policy is not repealed.

Under the resolution, passed 189-175 at the annual meeting of the Federation of Canadian Municipalities in Whistler Saturday, U.S. bidders could be shut out from city contracts.

I don’t understand why the US repeatedly retreats behind (pseudo) trade barriers whenever the economy is “threatened”.  The Americans certainly don’t inhabit an “island” of self-sufficiency.  I find it ironic also, considering the US has always been a primary proponent of economic “globalization” as they sought more and more markets in which to sell their goods and services.  One would think that what is good for the goose is good for the gander but, apparently, that is not the case for the US.

I guess I should be relieved, instead, that the Americans are not yet seeking lebensraum.  If we can wait them out until they can no longer afford the petroleum fuels to power their vast military forces, we can perhaps increase the probability of repeating the outcome of 1812.

Representatives of Canadian cities voted narrowly on the weekend to retaliate against American firms that have stopped buying Canadian goods unless the U.S. “Buy American” policy is not repealed.Under the resolution, passed 189-175 at the annual meeting of the Federation of Canadian Municipalities in Whistler Saturday, U.S. bidders could be shut out from city contracts.
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Responses

  1. It’s the same deal we have with our drug problem. We seek to punish other countries for our own sins. Economic malaise and drug addiction are local problems, not global.

  2. it would be easier if we actually MADE anything, other than TGIFriday Burgers and Pizzas. We manufacture very little. Sad…

  3. And Congress doesn’t think that Canada and Mexico are part of North America, either. I agree with Daisy Fae, we don’t have a manufacturing base anymore. If we want one, we’ll have to buy all the equipment back from the Chinese. I can see that they are probably trying to lower our trade deficit, but that won’t happen until they put Wal*Mart out of business. Fat chance.

    Notice also that the Corn Laws were repealed in 1846, just in time to worsen the Irish Famine. Loads of grain, cattle and pigs were exported to England while Ireland starved.

  4. UB: I think the US “war on drugs” is less about preventing addiction and more about control and making money for a select few.

    This most recent economic malaise had pure and simple greed as a significant contributor (IMHO). I really am both amazed and appalled when I hear people who are all about “making money”. What is money? What was once a medium of exchange has been perverted into something you can get for nothing. And that story never has a good ending.

    I think that, all in all, the “Buy America” provision was a way to appease the masses and cajole them into permitting their tax dollars to be used in ways that the administration and congress saw fit. Ways that a lot of Americans would not normally support. There will be fall out from it though. Perhaps sooner than later.

    daisyfae: Ah, but the making of things in America has become too expensive. All the benefits that go along with the better paying labour jobs creates havoc with margins and bottom lines. Especially when Americans willingly stop buying the stuff that *is* “Made in the USA”.

    I had to laugh at an article I read today about how what America really has to offer the world is knowledge and services. Services like financial services and investment banking. I can hardly type this with a straight face, let me tell you.

    silverstar: Wal*Mart: “Bring it home to the USA”. What a joke. Judging the average Wal*Mart shopper by sight only, I would hazard a guess that they don’t look at the labels to determine where the cheap crap there is made.

    Interesting point about the Corn Laws. I hadn’t noticed that. I only found the article when looking up Malthus after reading a story about bride scams in China (yeah, long story). At base, though, it’s always been about “making money”.

  5. […] | Tags: Buy American, Uncanny Comments, US Protectionism | Leave a Comment  A few days ago, I wrote a little about the growing backlash in Canada over the recently renewed “Buy American” campaign […]


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