18 September 2009

The border meets the planet

The following appeared in today's edition of "globeandmail.com".

Stephen Harper and Barack Obama emphasized close co-operation on climate-change policy when they met this week, while playing down the importance of free trade in government procurement; they characterized the Buy American clause in the U.S. stimulus package as “a source of irritation.” This was a sensible and forward-looking choice.

Free trade between the United States and Canada will be in danger if some version of the American Clean Energy and Security Act, the Waxman-Markey bill, which the House of Representatives passed in July, is also passed by the Senate. The bill's cap-and-trade plan includes “border adjustments” that are supposed to add into the price of imports the cost of carbon emissions in manufacturing them, but would also have the effect of protective tariffs.

This risk to Canada would be removed by a shared North American approach to climate change, to be articulated in December at the Copenhagen conference, which will try to replace the Kyoto Protocol. Mr. Obama and Mr. Harper are right to assert their commitment to “a comprehensive and effective international agreement.” Though developing countries such as India and China are unlikely to agree at Copenhagen with the United States, Canada and Europe, the exercise may well focus the minds of Canadian and American policy-makers.

As stimulus spending begins to wind down, any hope of eliminating protectionism in state and local-government purchasing, before the end of the U.S. recession, is fading. When Mr. Harper and a few of his colleagues met with much of the congressional leadership yesterday, they apparently could not persuade them to reverse Buy American policies. But there is still time to avert eco-protectionism.

It would be a gross exaggeration to echo Carl von Clausewitz's often quoted description of war as “a mere continuation of politics by other means,” by saying that climate-change measures are only the latest variation on the perennial theme of North American free trade. The reduction of greenhouse-gas emissions is a good goal in itself, and the economic interests of Canada demand a considerable alignment of Canadian and American climate-change policy.

The U.S.-Canada Clean Energy Dialogue, on which Jim Prentice, the federal Minister of the Environment, reported to Mr. Harper and Mr. Obama on Wednesday, is promising. At present, environmental and trade goals are in harmony, as they should be.