Buy local by all means

When Barack Obama says “Buy American,” countries that want to
sell to America freak out. This week, between Obama signing his $787
billion (US) stimulus plan into law and his trip to Canada, media in
our country have talked of little else besides how Buy American
provisions of the stimulus might hurt us. But as a shopper who goes out
of his way to choose a Nova Scotia apple over imports at the local
grocery store, I hear only common sense in Obama’s rallying cry. If he
wants to spend a wajillion American taxpayers’ dollars to help the
American economy, the best way to do it is surely by buying American
things from Americans. I don’t have a problem with that. Should I?

“I have a problem that you don’t have a problem with that,” says
Gilbert Winham, a political scientist who teaches international trade
law at Dalhousie’s law school.

Winham explains the highlights of the last hundred years of
international trade. In the early 1900s, it was relatively easy for
people, money and goods to go from one country to another. Two world
wars later, the open relationship was understandably frayed. And
between the wars was the Great Depression, when American politicians
increased duties or tariffs on imported goods, causing other countries
to respond in kind. High tariffs are an effective wall, making it too
expensive for goods to get into a country, but when every country has
walls there is no world market. “That’s why the depression became so
godawful bad,” says Winham. “Trade simply broke down because of the
tariff policies.”

Since WWII, of course, countries have worked diligently to encourage
the world’s market. The World Trade Organization and deals like the
North American Free Trade Agreement aim to keep business running
smoothly and openly. “The world market is bigger than all other markets
put together, if the world market is non-discriminatory,” says Winham.
The fear is that protectionism spread by Obama could be contagious,
dragging the world’s troubled economic system down even more. In that
case, the stimulus plan would be a $787 billion brake.

Which brings me back to my apple. If Obama’s common-sense
inclination to buy American could drive the world to depression, does
my well-meaning choice to shop local have unintended global
consequences? “A pure economic model allows for the exercise of taste,”
says Winham. “As a consumer making a choice not to eat foreign apples,
you are still dealing with the liberal system.” However, if Canada
slaps a $2 tariff on every apple at the border, that’s the sort of
protectionism that imperils the world market.

But there are layers of shoppers between individual consumers and
heads of nations. An encouraging trend I’m seeing is municipal
governments giving preference to local suppliers. A city can put out a
call for playground equipment (or paving, or apples), and an allowance
is made so that if a local’s bid costs slightly more than an
outsider’s, the local could still get the contract. In Chicago, locals
can be two percent more expensive: in San Francisco, five percent.

“If a $100,000 bid from a non-local firm leads to $1,000 in extra
tax revenue, and a $102,000 bid from a local firm leads to $5,000 in
tax revenue, which one is more sensible?” asks Bangor city counsellor
Geoff Gratwick in a Maine magazine. More to the point, does making that
choice constitute consumer taste, or government protectionism? Winham
mulls this over before getting all lawyerly: “A tariff is a
straightforward mechanism discriminating on one product and not
another,” he says, deciding that the case of a percent allowance in a
bidding process is not protectionism.

If the local shopping cause can’t have Obama, the world’s mayors and
councillors are a good consolation. Halifax has an ethical spending
policy in the works. When I ask if city hall is considering ways to
give locals preference in bidding, city spokesperson Deborah Story says
they’re bound by trade agreements to give everyone equal footing.
Sounds like they need to speak to a lawyer.

Correction: Last issue’s cover photograph of Jenn Grant was
taken by Ivan Otis.

Stimulate me at editor@thecoast.ca.

This article appears in Feb 19-25, 2009.