“We’ve heard talk of Buy China retaliation; Buy Australia … basically, this legislation has sparked Buy Local movements around the globe,” says Braddock. (Buy China isn’t just talk. Check out this report from the FT on new Buy China rules announced yesterday, and what they might mean for foreign companies.) What the Chamber is after, is a solution that ensures free trade for all.

Only 6% to 7% of stimulus funds have been deployed to date. And according to Braddock, Buy American has actually slowed down the stimulus effort in a few key ways. First, it’s created mass confusion as to who can or cannot bid on a stimulus-related contract. Second, it’s meant that some U.S. companies, such as Duferco Steel in Pennsylvania, have found themselves shut out of participation on recovery projects because of foreign products in their supply chains, putting, in this case, 450 American jobs at risk. Third, some U.S. companies have been prevented from bidding on stimulus-related government contracts overseas. (See Canadian Business editor Joe Chidley’s post on General Electric chief executive Jeffrey Immelt’s experiences for context.)

In the past week, the U.S. Chamber has gone very public on this issue. On Thursday, June 11, they held a press conference in D.C. to ask Congress to exempt state and local governments from complying with Buy American riders. That way, federal rules around procurement would truly be in compliance to the United States’ international obligations to other nations under the terms of free trade treaties – as President Barack Obama promised way back in February.

This, in Braddock’s view, is preferable to the legal sleight of hand that’s currently obtaining. Right now, state and local governments in the United States are, for the most part, not covered by international trade treaties. However, conveniently, most procurement decisions are made at the state and local goverment level. In applying Buy American only to state and local governments, the Obama administration has been able to claim it is honouring free trade principles at the international level – while requiring lower levels of government to do an end run around them.

In Saskatchewan, where part of my family is from, we have a good phrase for that kind of thing. Unfortunately, it’s not printable.

The U.S. Chamber’s effort was timed to coincide with a joint Hill lobbying spree by the premiers of Canada’s provinces and Prime Minister Stephen Harper. The Harper government is calling for exemptions for Canadian companies only from Buy American riders. Both the feds and the provinces want the U.S. to sign on to open procurement policies at all levels of government.

Of course, what the Harper government is calling for isn’t entirely what Braddock and his colleagues want. That’s because it’s not just Canada that’s affected by the Buy American riders. And in retaliation, Buy Local movements are taking root around the globe.

With Canadian municipalities voting in favour of retaliatory action last week, the United States has 120 days to roll back its Buy American riders on stimulus funds. If the riders aren’t rolled back, then Canadian municipalities will cut companies from countries with discriminatory procurement policies out of bidding on their contracts. And that, says Braddock, represents potentially billions and billions of dollars in lost business for U.S. companies – further hampering the American economy’s attempts at recovery. (Canadian cities buy roughly $15-billion worth of goods and services from U.S. suppliers every year.)

In a classic twist on the let’s-bash-up-on-Canada-regardless storyline, some north of the border seem to believe this is still (somehow) the result of lack of Canadian foresight and a missed opportunity. According to one analysis in a respected newspaper, the premiers of all Canadian provinces should have signed on to the World Trade Organization’s Agreement on Government Procurement years ago, thus securing reciprocal access to contracts in 37 American states.

Meanwhile, this thinking goes, competitor nations that did sign on to the WTO’s deal are blithely unconcerned about Buy American riders affecting their companies’ abilities to bid on stimulus contracts.

This reading misses two key points. It overplays Canadian agency in a situation that has been largely driven by U.S. domestic politics. Second, it overplays the reach of the WTO deal, which doesn’t apply at the municipal level – where much of the federal stimulus procurement effort is being made. Sure, Canadian business missed an important opportunity when the then-premiers decided not to sign on the WTO’s agreement way, way back. But doing that wouldn’t have solved much of the problem now facing Canadian companies operating down south.

Meanwhile, Buy American riders are popping up across the American legislative landscape. Two new bills that recently passed the House, the “Water Quality Investment Act of 2009” and the “21st Century Green High-Performing Public School Facilities Act,”  included “Buy American” mandates in their terms. These bills authorize billions of dollars in spending over periods of several years.

Right now, Buy American only matters for the two years stimulus funds are designated to flow. Once 2010 ends, Buy American is history. But if similar provisions become law in bills like these, then the U.S. is very much shutting its doors to free trade for the long haul. And that, for anyone who does business across the border, is a major problem.

On Dec. 1 International Trade Minister Stockwell Day and Agri-Food Minister Gerry Ritz announced Canada is asking for consultations regarding COOL under the World Trade Organization’s dispute settlement process.

Some background. The mandatory country labelling of all beef, pork, lamb, chicken and goat meat and “certain perishable commodities” sold in U.S. stores was implemented on Sept. 30, 2008 as an interim final rule (this, according to Foreign Affairs and International Trade Canada, means there is a “six-month non enforcement transition period.”)

So essentially, in order for these products to be considered a product of the U.S., each stage of their growth and processing has to have occurred on U.S. soil, or in the case of fish or shellfish, which were covered under earlier legislation, U.S. waters. Otherwise, for example, if a cow was born in Canada but raised and slaughtered in the States, the label of the sirloin cut that comes from the cow must now indicate its path from Canada to the U.S.

Canada’s issue with the COOL rules, also according to DFAIT, is this:

“Canada is concerned that the legislative requirement to separate products into three categories based on the country or countries where they were produced will impose additional costs at each stage of the process (for example, feedlots, processing and packing, and retail). Processors, for instance, may need to segregate animals at their facilities, which will generate additional costs. These additional costs could create a disincentive to purchasing Canadian animals. Processors may choose not to buy Canadian animals or may buy them at a discounted price.”

After all, these talks, which were supposed to define the development agenda of the WTO, have been going, going, going, but not quite gone, almost since they started seven years ago. Two years ago, a previous last-ditch attempt at reaching “modalities” (trade-speak for agreements among the 150-odd member countries on ways to move forward) failed in Geneva (see my column from summer 2006).

Yesterday, renewed talks in Geneva failed after India—a newish power in the developing country camp—squashed the negotiations on agriculture (which are linked to negotiations on services and manufactured goods) when it refused to give in on its demand for significant “emergency” powers to prevent a flood of cheap food imports damaging its farming sector. India’s chief negotiator, Kamal Nath, claimed to have the support of dozens of other developing countries in standing firm on such “special security measures,” or SSMs, against demands to water them down from the United States.

Much chatter out there seems to be about whether this spells the end of the Doha round. (If you want to hear WTO director general Pascal Lamy’s inimitably dry take on the collapse, check this out.) I attended the Hong Kong ministerial meeting back in December 2005, and my sense (for what it’s worth) is that it ain’t over till it’s over. They’ll talk again, and will creep towards a resolution. The question is, will any resolution even matter by the time they get around to one?

I’m not going to get into the obvious merits of free trade in agriculture, services and goods here. I’ve done it before ad nauseam, as have many people who are smarter than me. (For instance, see Andrew Coyne’s recent post at macleans.ca, which lists some of Canada’s more egregious transgressions against the free trade cause.)

Let’s just for the moment point out some ironies. For one, what’s the logic of defending a farming community against cheap food imports, all in the name of food security, in a nation that cannot feed its people? According to the UN World Food Programme, India is home to nearly half of the world’s hungry; more than a third of the population consumes less than 80% of minimum energy requirements—a threshold below which the WFP considers people to be, ironically, “food-insecure.”

On the other hand, what’s the logic of going to the wall over what is, from the U.S. point of view, clearly a minor point of principle, when so much else is at stake in terms of opening up important markets to American goods and services? It makes no sense—unless, as a cynic might charge, the point is to maintain the politically expedient but economically appalling level of farm support in the States, as embodied in the most recent U.S. Farm Bill?

The convenient myth among politicos and some trade-watchers is that Doha doesn’t matter, that it’s just a bunch of bureaucratic polyannas getting together to discuss how many modalities can dance in a blue box. But the inconvenient reality is that real people (consumers here, the poor around the world) pay dearly for the protectionism that keeps free trade an elusive dream—and the Doha round always having to come back from the dead.