From The Globe and Mail, Toronto, noting PM Harper’s meeting with congressional leaders on the Buy American provisions in the stimulus bill that provoked Canadian responses and hurt companies on both sides of the border, “PM prepares to lobby U.S. Congress.”

Canadian prime ministers troop to the White House every few years, but rarely lobby the congressional leadership who control matters key to Canada’s interests – such as inserting Buy American clauses into stimulus-spending bills. Mr. Harper meets Mr. Obama for less than an hour Wednesday, but will hold two sessions Thursday with the top Democrats and Republicans in both the House and Senate.

“In the American system, particularly when it comes to issues of trade and protectionism, often our bigger challenges are in Congress, as opposed to the administration,” Mr. Harper said in an interview with CTV News before he left for Washington.

“So far the administration has responded quite positively to our offers and our attempts to deal with this. But it may be the case that the administration alone can’t deal with it. That’s something we’ll have to gauge on this trip.”

The prime minister will also talk about the move by some in Congress to punish Canada for developing its oil sands in northern Alberta. Environmental groups are engaging in protests and stunts against PM Harper’s visit, agitating against U.S. energy security. See SecureOurFuel.org’s commentary, “Greenpeace’s War on Reality.” Key excerpt:

of PetroChina’s involvement (financial and otherwise) in the oil sands eliminated all doubt, if any remained, that even if U.S. policymakers end our unique relationship on energy with Canada, those resources will continue to be produced for, sold to and used by millions (billions?) of grateful energy consumers in Asia – impacting America’s economic and strategic position, but doing nothing to limit the emission of carbon dioxide (in fact, according to one respected study, emissions may actually increase under an LCFS).

UPDATEHow ‘Buy American’ Can Hurt U.S. Firms“:

Mr. Pokorsky runs Aquarius Technologies Inc., a company in Port Washington, Wis., that makes equipment to treat sewage. The stimulus plan earmarks some $6 billion for municipal wastewater projects that are right in his company’s sweet spot.

But the bill’s Buy American provisions — meant to give U.S. companies a leg up on foreign competition — are causing Aquarius and other U.S. companies a lot of grief with both suppliers and clients in Canada.

Protectionism invites retaliation invites further protectionism invites further …

The Washington Post’s Annys Shin does a nice job describing the cross-border trade problems that the stimulus bill’s “Buy American” provisions have caused with our Canadian partners. In “‘Buying American’ Puts Strain on U.S. Trade with Canada,” Shin reports that the provisions are most troublesome for industries that are highly integrated across the U.S.-Canadian border, exchanging materials and components made in both countries.

Shin also has an apt term for the U.S. approach toward the issue, “indifference.” President Obama definitely played down the issue during the three leaders’ news conference in Guadalajara Monday.

Here’s a collection of headlines from Canada:

• Edmonton Sun, “Obama: ‘Buy American’ won’t hurt Canadian trade“
• CanWest News Service, “Premiers primed to fight ‘Buy American’“
• AFP, “Canada’s Harper warns ‘Buy American’ is ‘risky’“
• Brantford Expositor, “Obama urges Canada to just relax” (Expositor! A fine newspaper name.)

And from The Globe and Mail (Toronto), “Obama underplays Buy American policy”

At Hayward Gordon, a Halton Hills company specializing in industrial water pumps, American business that once made up three-quarters of the firm’s orders is drying up.

“It’s millions of dollars in orders that are starting to pile up,” said John Hayward, the company’s second-generation president who believes the worst is yet to come.

“It’s about to hit us like a tidal wave,” he said. “I have to compete against American companies here [in Canada] and sometimes lose orders to them, and I can’t turn around and compete in the U.S. And there’s a hell of a lot wrong with that.”

Relax, Hayward.

No, we don’t expect a renewal of 1812 hostilities, but in matters of trade …

• From Bloomberg, “Canada Minister Clement Warns of ‘Don’t-Buy-American Backlash’”
• Canada.com, “Wilson confident of resolution to ‘Buy American’ spat”
• Toronto Globe and Mail, “Confusion reigns over Buy American“
• Toronto Globe and Mail, “Tories seek union’s help in fight against ‘Buy American’“
• The Chronicle Herald, “Flaherty: Protectionism bad” [No disagreement there.]
• Watertown Daily Times, “Free trade Other nations follow US protectionism
• Calgary Herald, “Ignatieff warns U.S. of ‘Buy American’ backlash“
• Financial Times Deutschland, “Buy American wird zum Bumerang”
• La Presse Canadienne, “Flaherty: exclure les entreprises des EU n’est pas la chose à faire”
• El Economista (Mexic), “Canadá toma represalias por “Buy American”

Tony Clement is Canadian Industry Minister.

Michael Wilson is Canada’s ambassador to the United States.

Jim Flaherty is Finance Minister.

Michael Ignatieff is leader of the opposition, the Liberal Party.

The German and Mexican links are included just to make the point that the rest of the world is watching and making plans.

More coverage of the comments of Tony Clement, Canadian Minister for Industry, who spoke at the National Association of Manufacturers on Wednesday.

Canadian Press, “Clement says U. S. protectionism ‘expanding’ and ‘cascading’”:

American protectionism is expanding rapidly despite President Barack Obama’s commitment to free trade, Industry Minister Tony Clement said Wednesday.

The so-called Buy American provisions in Obama’s economic stimulus bill are increasingly slamming the door on Canadian companies looking to bid on contracts in the United States, Clement said following a speech to the National Association of Manufacturers.

“What’s happened is these provisions seem to be expanding in scope, and they’re cascading down the system,” said Clement, in Washington to meet with key Obama officials and legislators.

“It seems to be metastasizing a little bit, which is of grave concern to Canada.”

The trend continues despite Obama’s stated support of free trade, he added.

“The Obama administration is our ally on this. They understand the need to combat protectionism,” Clement said.

It’s just an adverb and it’s just an editor’s call, but we didn’t hear “rapidly” in any of Clement’s comments. The “Buy American” provisions in the stimulus and the backlash in Canada are serious concerns, but “expanding rapidly” seems too strong.

CanWest, “U.S. protectionism ‘hurts Americans’: Clement”

Reuters, “Ottawa worries ‘Buy American’ sentiment spreading”

The restructuring of GM Canada with the possibility of aid from Ottawa was another topic Wednesday. Clement repeatedly noted the integration of the U.S.-Canadian manufacturing sectors across the border. Rarely do we hear the phrase “supply chains” mentioned as often as at this news conference.

Canadian Minister of Industry Tony Clement spent the morning at the National Association of Manufacturers, meeting with NAM President John Engler and our trade policy staff,  giving remarks and then answering questions from member companies and associations, and then holding a brief news conference attended by the trade/trade press and Canadian media.

Topic du jour was the “Buy American” provisions in the U.S. economic stimulus bill that have riled many on the northern side of the border. In his news conference, Clement offered a summary of his government’s views and his goals in coming to Washington:

The Canadian government is concerned about any impulses towards more “Buy America” and more protectionism. We see that as inconsistent with the President’s participation in and agreement with the G20 talks and other fora, international fora. It’s a consensus in the world that in order for us to get to the end of the world economy downtown, we need to resist protectionist pressures that we’re all facing, quite frankly, in all our jurisdictions.

We wish to work with the U.S. Administration and with Congress to make sure that this is not something that infringes upon Canada-U.S. trade agreement. We actually think it’s more injurious to American trade, to the health of U.S. trade, to allow these pressures to continued be acted out on.

A lengthier excerpt is available here as a transcript and here as a soundfile.

Several times during his remarks and news conference, Minister Clement mentioned the news conference Secretary of State Clinton gave when she discussed U.S.-Canadian border issues, highlighting security but also emphasizing the importance of commerce. As the Canadian Press reported, Secretary Clinton said security is the goal “without undermining either our relationship or the trade in goods and services, the tourism, the natural flow of people who both work and go to school and recreate on both sides of the border.”

More from Dow-Jones:

WASHINGTON -(Dow Jones)- Canadian Industry Minister Tony Clement expressed concern Wednesday that the Buy American provisions included in the U.S. stimulus package passed earlier this year continue to expand.

“It seems to be metastasizing a little bit, which is of grave concern to Canada,” Clement told reporters during a trip to Washington to meet with Obama administration officials and lawmakers.

Canadian Minister of Industry Tony Clement is speaking at the National ASsociation of Manufacturers Wednesday, addressing the topic, “The Integrated Canada-U.S. Market: Facing Economic Challenges Together to Improve Long-Term Competitiveness.”

Here’s some reading material for those who wish to prepare:

• Washington Post, “Trade Wars Brewing In Economic Malaise — Outrage in Canada as U.S. Firms Sever Ties To Obey Stimulus Rules“
• Toronto Star editorial, “Ottawa lags in trade row“
• Associated Press, “More air cargo gets security screening“
• Financial Post, “Canada posts bigger-than-expected trade surplus in March“
• CBC News, “The no longer quite so undefended Canada-U.S. border“

From The Congressional Record, Page S528, the debate on Senator Byron Dorgan’s amendment, No. 300. It passed on a voice vote.

The amendment is as follows:

(Purpose: To clarify that the Buy American provisions shall be applied in a manner consistent with United States obligations under international agreements)
On page 430, strike lines 7 through 12 and insert the following:

(d) This section shall be applied in a manner consistent with United States obligations under international agreements.

Mr. DORGAN. I offer this amendment on behalf of myself, Mr. Baucus, Mr. Inouye, and Mr. Brown. It simply says the “Buy American” section shall be “applied in a manner consistent with United States obligations under international agreements.”

I yield the remainder of my time to Senator Brown.

Mr. BROWN. I thank the Senator from North Dakota and thank Senators BAUCUS and INOUYE for their support.

Americans are willing to reach into their pockets and spend billions of dollars for infrastructure to build bridges and highways and water and sewer and put people back to work. All that Americans want is that we provide jobs in this country–jobs, construction jobs–and that what they use for this construction, the materials, are made in America. This is WTO compliant. It follows U.S. and international global trade rules. It is a commonsense amendment.

Some people say “protectionism,” but how can you have an $800 billion trade deficit and call us protectionist? How can you have a $200-billion-a-day net outflow and say we are closing our borders? It makes sense to vote for the Dorgan amendment.

Mr. McCAIN. Mr. President, I ask for 1 minute to speak in opposition to the amendment.

The PRESIDING OFFICER. The Senator from Arizona is recognized.

Mr. McCAIN. Mr. President, what this amendment does is basically stand in direct contradiction to the amendment itself. It is impossible to say the section would be applied in a manner consistent with the U.S. obligations under international agreements and then say that anything that is manufactured in the United States, whether iron, steel, or manufactured goods will have to be subject to “Buy American.”

The reaction to this amendment has been strong and widespread, including the President of the United States, who said, “I think this would be a mistake right now.” The President said, “It is a potential source of trade wars that we cannot afford at a time when trade is sinking all over the globe.” (continue reading…)

President Obama’s comments to ABC’s Charlie Gibson on the ill-advised “Buy American” provisions in the stimulus bill are getting some notice. From the transcript (and the paranthetical “not” corrects a misstatement as acknowledged by the White House):

CHARLES GIBSON: A couple of quick questions. There are “Buy America” provisions in this bill. A lot of people think that could set up a trade war, cost American jobs. You want them out?

PRESIDENT OBAMA: I want provisions that are [not] going to be a violation of World Trade Organization agreements or in other ways signal protectionism. I think that would be a mistake right now. That is a potential source of trade wars that we can’t afford at a time when trade is sinking all across the globe.

CHARLES GIBSON: What’s in there now? Do you think that does that? Do you want it out?

PRESIDENT OBAMA: I think we need to make sure that any provisions that are in there are not going to trigger a trade war.

The NAM’s letter to the Senate cited below includes a statement in opposition to the Buy American provisions. The Sun newspapers in Canada regarded the item as newsworthy, reported across the nation in, “Buy American’ clause will backfire, U.S. leaders warned.”

Getting even more attention was a letter from Canada’s ambassador to the United States, as reported in The Globe and Mail:

In a letter to Harry Reid and Mitch McConnell, the respective leaders of the Democrats and Republicans in the Senate, Ambassador Michael Wilson asks legislators to refrain from bringing in new laws that would restrict trade, lest they lead to similar actions by other nations.

“A negative precedent set here in the United States can have repercussions around the globe and could provoke debilitating beggar-thy-neighbour policies,” said the letter, a copy of which was obtained by The Globe and Mail.

At one point, he warns that legislation in Congress that would force officials to direct infrastructure spending to U.S. firms could undermine the United States’ ability to dissuade others from also undertaking protectionist measures.

“We are concerned about contagion, that is, other countries also following protectionist policies. If Buy American becomes part of the stimulus legislation, the United States will lose the moral authority to pressure others not to introduce protectionist policies,” he writes.

“A rush of protectionist actions could create a downward spiral like the world experienced in the 1930s.”

We should note that the U.S. and Canadian economies are closely integrated. In fact:

The two nations share the world’s largest and most comprehensive trading relationship, which supports millions of jobs in each country. In 2007, total trade between the two countries exceeded $560 billion. The two-way trade that crosses the Ambassador Bridge between Detroit, Michigan and Windsor, Ontario equals all U.S. exports to Japan. Canada’s importance to the U.S. is not just a border-state phenomenon: Canada is the leading export market for 36 of the 50 U.S. States, and ranked in the top three for another 10 States. In fact, Canada is a larger market for U.S. goods than all 27 countries of the European Community combined, whose population is more than 15 times that of Canada.

From the U.S. Embassy site in Ottawa.