The U.S. and Canada, its largest trading partner, reached a preliminary deal to settle what had become an acrimonious dispute over "Buy American" provisions in the U.S. stimulus package.
The deal, if approved, will give companies on both sides of the border access to government procurement contracts at the state and local levels. U.S. Trade Representative Ron Kirk said the increased access for U.S. firms in Canada would be worth billions of dollars in contracts.
Sound good? Not to Don Boudreaux. Here's some of the letter he wrote to the Wall Street Journal.
In other words, Washington agrees that it will spend Americans’ tax dollars wisely – that is, get the most value in return for each dollar spent – only if Ottawa does the same with Canadians’ tax dollars. If instead Ottawa had stubbornly insisted on wasting Canadian taxpayer dollars by refusing to buy lower-priced goods and services from Americans, Washington would have boasted of its commitment to continue wasting American taxpayer dollars by refusing to buy lower-priced goods and services from Canadians.
This sort of Dali-esque surrealism of government behavior is ignored by the public and the punditry only because it is all too common.
He's not the only one on my blogroll who has come out writing against these agreements. Here's what Jeffrey Miron thinks about the issue:
Even if this issue gets resolved sensibly, it should never have arisen in the first place. When the government builds infrastructure, it should do so at minimum cost (quality adjusted). The Buy America provisions interfere with that objective and risk killing jobs when our trading partners retaliate.A side issue (the subject of today's poll) is whether people value American products more because they were made in America. That is, are you more likely to buy a product if you know it was made in the United States (or Montana)? That brings me to the poll question of the week.
How do you value a product if it is "American made"?
(a) I like it about the same
(b) I like it better
(c) I like it worse
The poll is open for a week. Vote early and often (on the sidebar -->). I'm interested in hearing what you have to say.