Stephen Harper’s Conservatives were re-elected as the government in Canada this week, gaining more seats in the Parliament, a success that merits close attention in the United States. For one thing, voters resoundedly defeated the opposition Liberals’ call for a carbon tax. With Canada relatively untouched by the global financial crisis, voters did not punish Harper for being in power.

Most notably, Harper is a strong advocate of free-trade agreements, so Canadians explicitly rejected the protectionism that can be found in other political parties, especially the leftist New Democrats.

Today, preliminary talks open in Quebec City between Canada and the European Union on a free-trade agreement, or an “economic partnership” as it is being described, a meeting that included Prime Minister Harper, French President Nicolas Sarkozy headed the meeting — Sarkozy currently holds the EU’s rotating chairmanship — and EU President  José Manuel Durão Barroso.

The case is compelling, especially in light of the current financial crisis. From The Ottawa Citizen.com:

OTTAWA – Business leaders say the stars are aligned for Canada and the European Union to begin talks on an “ambitious” trade liberalization deal that could see both economies reap combined benefits of nearly $40 billion a year.

The $40-billion figure will emerge from a joint Canada-EU study to be released Friday, when Prime Minister Stephen Harper meets with French President Nicolas Sarkozy and Jose Manuel Barroso, the European Commission president, in Quebec City. At present, two-way trade between Canada and EU countries stands at $100 billion.

The study, say people familiar with its contents, will suggest a wide-ranging trade liberalization deal would boost Canada’s annual real income, up until 2014, by $16 billion. That translates into 0.8 per cent of Canada’s GDP. The EU would realize a gain of $22.5 billion a year, or 0.1 per cent of its GDP.

The Globe and Mail reports the focus will be on services:

Both sides are expected to emphasize the benefits of removing barriers to trade in services, as opposed to goods, based on the study, which concluded that tariffs on most goods are already relatively low. Canadian officials had repeatedly pressed for the negotiations to be called “free trade” discussions, apparently because it is a term Canadians understand, according to a source from a European nation.

Quebec Premier Jean Charest has pushed hard for the arrangement, and the statement will be issued when French President Nicolas Sarkozy, who currently holds the rotating presidency of the EU, is in Quebec City for the Francophonie Summit.

“The financial crisis makes this deal even more likely,” said Jason Langrish, the executive-director of the Canada Europe Roundtable for Business (CERT), an association that tries to boost trade and business links between the two economies. “We need to create liquidity between these markets.”

Powerful arguments for a Canada-EU Free Trade Agreement….or even more.

The Manufacturing Extension Partnership program has helped small and medium-sized manufacturers stay competitive and create jobs for almost 20 years. Despite its benefits, MEP supporters often have to scramble to get federal funds.

Rep. Joe Knollenberg (R-MI), a guest on this week’s edition of “America’s Business with Mike Hambrick” radio program, explains how he and other program supporters recently pushed to get the program funding.

“We did it by having individuals with the MEP talk to people in their district, wherever it might be, whatever state it might be in,” he says. “And that drummed up a lot of support because those members of Congress living in those states did not want to lose out.”

Higher energy prices are putting a financial pinch on manufacturers and made more Americans eager to embrace alternative energy sources. Sen. John Ensign (R-NV) will discuss his plan to extend tax credits that encourage development of alternative fuels such as solar and wind.

High energy prices also make shipping more expensive. CIBC World Markets Chief Economist Jeff Rubin will talk about his recent report on how energy costs affect global trade flow.

Canada is one of our nation’s closest allies. Canadian Ambassador to the United States Michael Wilson will join Mike to discuss the trade and other economic ties that bind the United States to its neighbor to the north.

In our regular segments, Renee Giachino of American Justice Partnership gives us the latest on tort reform and commentator Hank Cox recalls “The Way It Was.” This week “America’s Business” is launching a new regular segment featuring NAM Executive Vice President Jay Timmons. Jay, who has been intimately involved in politics for years, will give us his take on 2008 political races that manufacturers should watch.

And our program will close with “The Last Word” from the National Association of Manufacturers President Gov. John Engler will close the program with “The Last Word.”

For more about “America’s Business with Mike Hambrick” and to listen to the program online, please click here. And for video highlights and more, check out www.americasbusiness.org.

There are lots of urban legends we encounter and the one that seems most enduring is that nothing is made in America anymore.  Too many people refuse to see the reality that is shown in government data:  manufacturing output in the United States is at an all time high.  More is made here now than ever before.  

The U.S. manufacturing sector is dynamic and a major contributor to the high-tech economy that too many take for granted.  There are plenty of hurdles, though, that could drive this successful industry off the track.  In the global economy, there are other nations are trade blocs ready to seize the lead in global manufacturing.  In light of the global manufacturing marketplace, we surveyed manufacturers last fall to see how they thought North America stacked up. 

Those results are in.  Today The Manufacturing Institute, the National Association of Manufacturers (NAM), the Canadian Manufacturers and Exporters (CME)  and Deloitte Touche Tohmatsu released a report — Made in North America – that takes a look at manufacturing from a North American perspective:  the United State and two of its major trading partners, Canada and Mexico.  North American manufacturers consider the United States the most desirable country for expansion over the next three years and nearly 60 percent of U.S. manufacturers say they will become more competitive over the next five years across the board in sales, marketing, engineering and information technology.

Made in North America breaks new ground in several ways:

• manufacturers said that the North American Free Trade Agreement (NAFTA) was a net plus for them with only ten percent finding that it had hurt their business;
• nearly 40 percent said that they would expand R&D in the United States, with China and Canada as the next runners up with 20 percent and 18 percent, respectively;
• the top three barriers to competitiveness are labor costs, work rules and tax policy;
• the top three priorities survey respondents recommend for government action:  labor costs (including health care and pensions), tax policy and the availability of skilled labor.

The report is another reminder that the strong export performance of U.S. manufacturers this year is keeping the economy out of recession.  How much better we would be doing if a range of overseas barriers and tariffs to U.S. products were eliminated through trade agreements like NAFTA.  Candidates for public office should take a good look at this report and help keep U.S. manufacturing strong with their votes in Congress and state legislatures.  As this survey and news reports about it show, we’ve got too much to lose to ignore manufacturing.