Canada warns U.S. over protectionism

OTTAWA, Feb. 3 (UPI) -- A letter was sent to U.S. Senate leaders by Canada's ambassador to the country, warning of another great depression if the "Buy American" program progresses.

The diplomatic protest was written by Ambassador Michael Wilson to Democratic leader, Sen. Harry Reid and his Republic counterpart Mitch McConnell, and was seen by the Globe and Mail newspaper.

"A negative precedent set here in the United States can have repercussions around the globe and could provoke debilitating beggar-thy-neighbor policies," Wilson wrote. "We are concerned about contagion, that is, other countries also following protectionist policies. ... A rush of protectionist actions could create a downward spiral like the world experienced in the 1930s."

At issue is a bill the House passed last week that bans all foreign iron and steel as part of President Barack Obama's economic stimulus package. The bill is now in the Senate, where there are moves to amend it to include all non-U.S. products needed for economic recovery, the Globe said.

Debra Steger, a professor at the University of Ottawa and the first head of the appellate body at the World Trade Organization, told the Globe the U.S. bill in its current form violates both WTO rules and those of the North American Free Trade Agreement.