Prime Minister Stephen Harper warned Canadians on Thursday that discouraging protectionist trade policies in the United States might not be a straightforward task.

Speaking at a news conference announcing a new economic agency for southern Ontario in Kitchener, Harper touched on the subject of how Canada could best discourage a growing call for trade protectionism by its southern neighbour.


Prime Minister Stephen Harper says Canadians should be aware that discouraging protectionist trade policies in the United States might not be a straightforward task. ((Adrian Wyld/Canadian Press))

Protectionism in the face of moribund local economies featured prominently in discussions in Guadalajara, Mexico earlier this week among Harper, U.S. President Barack Obama and Mexican President Felipe Calderon.

There are global fears that the "Buy American" provisions slipped into the $787-billion US stimulus package by the U.S. Congress last February and designed to stimulate job creation in the United States will cut off any nascent economic recovery in Canada at its knees.

Ottawa is confident that an agreement on the issue can be reached, Harper said, but he cautioned that won't simply be a case of getting a pledge from Obama on the issue.

The Buy American provisions are not "strictly a matter of the White House," Harper said.

"The provisions we're talking about apply to procurement by subnational levels of government — by state and municipal governments in the United States," he said.

Under NAFTA and WTO rules, agencies below national governments are not subject to the same procurement restrictions. Provincial and municipal governments in Canada have the same rights to employ protectionist policies, and that too is something to be avoided at all costs, he said.

"[But] President Obama indicated an openness to looking at a range of solutions to this problem," Harper said, so he's optimistic a solution can be reached.

He cautioned against protectionist trade activities by any and all economies, including Canada's.

"We are seeing the expansion of these domestic preferences around the world," Harper said. "China announced a 'Buy China' plan as part of its own stimulus package [and] these things, if they multiply around the world, could become extremely problematic in terms of recovery."