Loom­ing large

‘Buy Amer­ica’ poli­cies called ‘out­ra­geous’ as Canada gets ready for NAFTA talks

The Guardian (Charlottetown) - - OBITUARIES / BUSINESS - BY JOANNA SMITH

The United States wants to main­tain - and even ex­pand - the Buy Amer­ica pro­vi­sions that re­strict gov­ern­ment pro­cure­ment to com­pa­nies us­ing ma­te­ri­als from within its bor­ders, while mak­ing it eas­ier for U.S. firms to get those con­tracts in Canada and Mex­ico.

The con­tra­dic­tory goal was among the ob­jec­tives for the re­vamped North Amer­i­can Trade Agree­ment that U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer re­leased ear­lier this month, sug­gest­ing the Amer­i­cans want to have their cake and eat it too.

“I think it’s rather out­ra­geous,” said Lawrence Her­man, an in­ter­na­tional trade lawyer who has rep­re­sented Canada at the World Trade Or­ga­ni­za­tion.

Step aside, dairy cows. Gov­ern­ment pro­cure­ment - mean­ing the process of who gets to bid to build bridges, high­ways and all sorts of pub­lic in­fra­struc­ture projects - is likely to be­come one of the tough­est is­sues the Lib­eral gov­ern­ment will have to deal with dur­ing the NAFTA talks that start next month.

There are two main kinds of pro­tec­tion­ist poli­cies when it comes to gov­ern­ment pro­cure­ment be­low the bor­der and con­fus­ingly, they have sim­i­lar names: the Buy Amer­i­can Act, which has been around since 1933, and var­i­ous Buy Amer­ica pro­vi­sions, which take on dif­fer­ent shapes de­pend­ing on the type of pro­ject and level of gov­ern­ment in­volved.

Un­der the for­mer, the WTO and the cur­rent NAFTA exempt Canada from the re­quire­ments, as long as the con­tract is be­ing of­fered by a U.S. fed­eral de­part­ment or agency and the amount is above cer­tain thresh­olds.

Ex­pand­ing the other kind the one with­out an ‘N,’ - is what ap­pears to be the fo­cus of the new NAFTA ne­go­ti­at­ing ob­jec­tives for the U.S.

It cur­rently ap­plies to pro­cure­ment done by state and lo­cal gov­ern­ments (also known as the sub-fed­eral level), but also to trans­porta­tion ser­vices and any state and lo­cal projects that re­ceive fed­eral fund­ing, which makes up the ma­jor­ity of in­fra­struc­ture spend­ing.

It comes with no special ex­emp­tion for Canada.

This be­came a big prob­lem when the pre­vi­ous ad­min­is­tra­tion of for­mer pres­i­dent Barack Obama rolled out a ma­jor stim­u­lus pro­gram to help the econ­omy re­cover from the fi­nan­cial col­lapse in 2009, with the re­quire­ment that only iron, steel and man­u­fac­tured goods pro­duced within the U.S. could be used for its projects.

That strained the re­la­tion­ship be­tween the two coun­tries, but they reached a one-year deal in 2010 that al­lowed Cana­dian ma­te­ri­als to be used in some of th­ese projects in 37 states, in ex­change for Canada open­ing up most of its own sub-fed­eral in­fra­struc­ture projects.

Since Trump promised a $1-tril­lion na­tional in­fra­struc­ture pro­gram on the cam­paign trail, main­tain­ing or ex­pand­ing the Buy Amer­ica pro­vi­sions could cause Cana­dian sup­pli­ers a lot of grief.

A group of deputy min­is­ters raised this as a con­cern when they gath­ered to dis­cuss in­ter­gov­ern­men­tal re­la­tions this Fe­bru­ary, ac­cord­ing to a doc­u­ment In­fra­struc­ture Canada re­leased to The Cana­dian Press un­der the Ac­cess to In­for­ma­tion Act.

“Buy Amer­i­can pro­vi­sions may have ad­verse im­pacts on the Cana­dian con­struc­tion sec­tor - and op­por­tu­ni­ties may be lost with re­spect to the (Trump) ad­min­is­tra­tion’s tril­lion dol­lars in­fra­struc­ture plan,” said the min­utes of the meet­ing.

Canada does have some lever­age.

The Lib­eral gov­ern­ment has a ma­jor in­fra­struc­ture pro­gram of its own, one that calls for $81.2 bil­lion in spend­ing over the next decade, while the plan Trump promised on the cam­paign trail does not ap­pear to be rolling out any time soon.

CP PHOTO/AP-EVAN VUCCI

U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer speaks in the Eisen­hower Ex­ec­u­tive Of­fice Build­ing on the White House com­plex in Washington dur­ing his swear­ing-in cer­e­mony May 15. The United States wants to main­tain and even ex­pand the Buy Amer­ica pro­vi­sions that re­strict gov­ern­ment pro­cure­ment to com­pa­nies us­ing ma­te­ri­als from within its bor­ders, while mak­ing it eas­ier for U.S. firms to get those con­tracts in Canada and Mex­ico.

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