In the bleak midwinter, Canada is fighting to ensure it doesn't lose billions of dollars as a protectionist US Congress pushes forward with its 'Buy American' legislation

It is really, really cold here north of the 49^th parallel, but that’s what you expect in February. What you don’t expect is your friend, your buddy, your big but nevertheless conjoined brother immediately to the south interfering with the temperature gauge by using two simple little words – “Buy American”.

They’ve sent an unprecedented shiver down the spine of Canada .

Buy local is a catchy little bumper-sticker type of politics, and certainly not original. New Zealand ’s equally menacing bigger sibling across the ditch has invested much in the “Buy Australia” mantra. New Zealand itself made much of the “Kiwi made” and “Buy New Zealand” mandates. Trouble is, they all now seem rather innocent little sales pitches compared to the economic devastation that could be wrecked upon the world economy if Americans did indeed turn insular. What’s left of the economy, that is.

Sure we mock Americans for the embarrassingly low percentage who have passports; for the little jokes along the lines that God made wars to teach Americans geography; because even nominees for Vice-President really think they can influence foreign policy because they can see Russia from their lounge – or that Africa is a country.

Now however it is time to dispense with such frivolities. It is also, by the way, time to return Davos to its primary job as a ski resort, but I digress.

What is scaring the icicles out of the proverbial Canadian longjohns is the threatened spectre of all steel and all iron to be used in American recovery reconstruction being American made. Is the 21st century version of Chruchill's Iron Curtain going to be literally that – and this time on the other side of the Atlantic?

If that's the case Canada is looking at being curtained off from billions of dollars in extremely interconnected trade arrangements through NAFTA. That's the equivalent of being forced to lick the damned steel pole in the middle of winter.

No-one would object if the Obama administration had a compulsory bonfire on Wall Street at which it generated its own steel by just melting down some of those returned corporate jets. Yes, such a sight would bear a frightening resemblance to Mao’s Great Leap Forward during which all metal – including kitchen implements – was hurled into the government furnace for the communist good. But what's the difference now capitalism and perhaps free trade as we know it have been dealt such near fatal blows?

Whichever way it is viewed, the current sense is one of panic.

Canada has gone on the full offensive, warning the Americans that any beggar-thy-neighbour policies that shut trade doors will devastate not resuscitate.

Back in Davos over the weekend, not even the world’s (admittedly weakened) economic superheroes were able to come up with anything more than various versions of a plea to the US to drop the “Buy American” provision, all the while secretly formulating protectionist plans themselves. These were the same dollar-gods who just two months ago under the guise of the G20 vowed to avoid protectionist actions. 'Moratorium' I believe was the term. World leaders have all delievered lectures on the slippery slope of protectionism, but the debate now has the unnerving air of do as I say, not as I do.

That’s put the frighteners up Canada , and the usual pleasant, cautious diplomatic cooing has been summarily dispensed with. These after all, are unprecedented times.

Canada is now lecturing its leviathan neighbour on the surety of losing all "moral authority" should it push through the 'Buy American' provisions in its trillion dollar rescue package. Hmm, this comes from a government that is fast developing a record of being incapable of even managing its own budgets... but desperate times and all that.

Also appearing on the horizon is the gentle murmur of threats about cutting off the pipeline from Canada's massive oil production courtesy of the oil sands in Alberta, or its natural gas supplies which also flow south of the border thanks to all the trade agreements. For the energy hungry Americans that could be serious, but for revenue hungry Canada it could also be an own goal.

The United States has always operated under the theory that all-politics-is-local. If local it is, then Canada now wants to be considered part of that ‘local’. It is hankering to be enfolded in a general North American sweep.

This whole issue is a big deal for a country that prides itself on being very separate from the US . In fact the best answer to someone here asking if I am from Australia is to ask which part of the US they are from. Canadians soon shut up. They get it. Army defectors don’t trudge north to hide, and the incessantly annoying Michael Moore doesn’t keep lauding (or lording) Canada because it is just the same as the US . There is no room on the Stars and Stripes for a Maple Leaf no matter how esthetically pleasing or politically convenient it may be to some.

It just so happens that a compromise may be arrived at soon by dent of the good fortune Canada has in being Obama’s first overseas visit as President.

While world leaders are lining up to host ‘The One’, it will be Stephen Harper’s aptly steely blue eyes that will be the first to lock gazes with the new American president. What better way to kick off proceedings than by announcing a bit of a compromise on the iron and steel issue.

Then they can actually get to work and sort out the issue of the return of Omar Khadr – Gitmo’s only child prisoner who just happens to be a Canadian citizen.