How should Canada respond to ‘Buy America’?

U.S. Ambassador David Jacobson says the Buy America provision included in President Obama's $447 billion job creation plan would actually be good for Canada.

He suggests that the U.S. economy will be buoyed by the new legislation and that Canada will ultimately benefit from a fiscally stronger America. In other words, short term pain for long term gain.

A lot of Canadians, however, including the prime minister, aren't buying Jacobson's argument.

"Protectionism is an obstacle to growth, not an aid," Harper said in parliament, Wednesday, reported the Toronto Star.

So, if the buy America provision is put into law how should Canada respond?

Some have suggested we should reciprocate with Buy Canadian provisions.

Such a move, however, would be counter to the Harper government's pro-free trade mantra and, according to at least one industry association, could actually hurt Canadian businesses.

"The worst possible scenario for a Canadian contractor would be Canadian public purchasing authorities, for example, municipalities, taking similar retaliatory measures here, because the difficulty becomes, how would you find replacement materials?" Michael Atkinson, President of the Canadian Construction Association, told the Daily Commercial News and Construction Record.

As an alternative to Buy Canada measures, Paul Frazer, a Canada-U.S. government relations specialist at 3Click Solutions in Washington, DC., advises that Canada should remain vigilant in efforts to lobby US lawmakers.

"The challenge is to effectively convey in a consistent way to American governments at all levels and to American business and communities, the importance of the hugely mutually beneficial relationship with Canada," he told Yahoo! Canada News.

"Americans in all regions need to develop a greater awareness and understanding of that bilateral relationship - they can't do this on their own; Canada needs to do much of the work on this front because of asymmetrical nature of the relationship.

"It is in Canada's national interest to go the extra mile at these times."