Canadian ambassador issues harsh letter to U.S. Senate

Reports say Canada's ambassador to the United States has bluntly warned American lawmakers their nation's moral authority on global trade issues is being put at risk.

A letter to U.S. Senate leaders from Michael Wilson warns of that prospect should "Buy American" provisions in President Barack Obama's economic rescue package become law.

The reports say the letter is marked by unusually harsh and direct language which reiterates that Canada is the largest single customer and trading partner of the U.S.

Wilson also warns the America-first procurement policy would increase the risk of another worldwide depression.

The letter surfaced as the Harper government faced opposition criticism Monday that it had waited too long to address the protectionist threat to Canada.

Obama's $800 billion-plus economic stimulus package, which could require all steel and manufactured goods used in resulting projects to come from American firms, is before the Senate this week. It could have the president's approval by mid-February.

Wilson said the package now before Congress could undercut the U.S.'s global reputation.

"If Buy America becomes part of the stimulus legislation, the United States will lose the moral authority to pressure others not to introduce protectionist policies," Wilson wrote.

His letter was sent to Senate Majority Leader, Democrat Harry Reid, and the minority leader, Republican Mitch McConnell.

"A rush of protectionist actions could create a downward spiral like the world experienced in the 1930s," the letter added.

It also warned the policy would "decrease North American competitiveness, thereby killing jobs rather than creating them."

In Ottawa, Liberal Leader Michael Ignatieff warned Monday that thousands of Canadian jobs and billions of dollars in exports are at risk.

"The U.S. legislation was not written overnight," Ignatieff said in the House of Commons.

"How did the government get caught off guard?"

International Trade Minister Stockwell Day replied that the Harper government is in daily contact with American officials on the issue.

"We are warning them of the dangers of protectionist movements. They say that they are concerned about this," Day said.

"They are looking at what they can do to mitigate it."

Liberal foreign affairs critic Bob Rae, however, said the government needs to do more to ward off the protectionist push south of the border.

NDP Leader Jack Layton said Canada's response should be to bring in its own procurement preferences for Canadian companies.