The Guardian (Charlottetown)

Looming large

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

- 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...
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...

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