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UPS CEO Rails Against Protectionism

Stocks in this article: FDX UPS

FedEx (FDX) and UPS (UPS) may be going after each other on the issue of their contrasting treatment under labor law, but the two companies agree strongly on another hot-button political issue: mounting protectionist sentiment.

At the Detroit Economic Club's National Summit on Tuesday, UPS CEO Scott Davis said global trade offers the best path to ending the global recession, and he blasted protectionism.

The principal threats to the global economy come from economic turmoil and protectionism," Davis said, adding, "We must argue that protectionism is the worst response at the worst time. We can't let political expediency cloud global reality."

Cramer: Swap FedEx for UPS

While they have drawn scant attention in the U.S., protectionist Buy American provisions in the Obama administration's $787 billion economic stimulus package are a consuming issue just across the Detroit River from the conference where Davis spoke.

Last week, Canadian Prime Minister Stephen Harper appealed to the U.S. to abandon the provision. In an interview with Fox News Channel, Harper said the U.S. faces the threat of retaliation from Canadian provinces and cities, which could disqualify U.S. companies' bids for Canadian infrastructure projects. "Quite frankly, the biggest risk we have to the global economy recovery is an increase in protectionism," Harper said.

FedEx has repeatedly made similar arguments. Recently, on a "citizenship blog" on FedEx's Web site, international president Mike Ducker noted President Barack Obama's May proclamation regarding World Trade Week and made the case that during a difficult economic period, world trade remains critical.

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