Toronto Star

Biden signs strict ‘Buy American’ order

Canadian Chamber of Commerce fears policy will make new contracts ‘difficult’

- JAMES MCCARTEN

WASHINGTON—U.S. President Joe Biden imposed stringent new made-in-America rules for U.S. government spending Monday, adding a caveat likely troubling to Canada: exceptions to those rules will be allowed only under “very limited circumstan­ces.”

Monday’s Buy American executive order was the result of a cornerston­e Biden campaign promise, one designed to corral swing-state support among the protection­ist, blue-collar voters who elevated Donald Trump to the White House in 2016.

The aim of the policy is not a new one in U.S. politics: ensuring that American manufactur­ers, workers and suppliers are the primary beneficiar­ies of U.S. government largesse, including an estimated $600 billion a year in procuremen­t contracts.

The Trump administra­tion liked to talk about Buy American, Biden said, but ultimately did little to toughen or even enforce the rules.

“That is going to change on our watch,” he said, signing an executive order to raise standards for U.S. content, increase oversight and provide for more stringent enforcemen­t.

The measures include a “Made in America” office attached to the White House to police the use of waivers — the exceptions that allow Canadian contrac

tors, manufactur­ers and suppliers access to a lucrative and often essential source of business.

That office will “review waivers to make sure they are only used in very limited circumstan­ces — for example, when there’s an overwhelmi­ng national security, humanitari­an or emergency need here in America,” Biden said.

Waiver details will also be posted on a U.S. government website to provide more public transparen­cy about who is getting around the rules and why.

The plan would also increase the amount of U.S.-produced materials or components a project or product would need to qualify as American-made, and make it easier for small and medium-sized businesses to access procuremen­t opportunit­ies.

Mark Agnew, the director of internatio­nal policy for the Canadian Chamber of Commerce, said Canada will find little of comfort in Monday’s news.

“Buy American restrictio­ns remain a perennial problem for Canadian businesses seeking to access government contracts with our largest trading partner,” Agnew said in a statement.

“Although the rules have progressiv­ely tightened over the years, (Monday’s) announceme­nt represents another unhelpful step to make it more difficult for Canadian businesses to secure contracts in the U.S.”

A more stringent and orderly system of approving and enforcing waivers might eventually prove to be a “silver lining” for Canada, said Dan Ujczo, a Canada-U.S. trade lawyer based in Columbus, Ohio.

The enforcemen­t of procuremen­t rules can sometimes be haphazard, particular­ly when they are confusing and poorly understood, said Ujczo, senior counsel with the U.S. firm Thompson Hine LLP.

“Canada has a network of agreements with the U.S. to address Buy American programs, but the nuance often is lost on procuremen­t officers that do not want to risk using non-U.S. products,” he said.

“If Canadian companies can use this new Made in America office at OMB to emphasize Canada’s ‘exemptiona­lism,’ it could prove worthwhile.”

The U.S.-Mexico-Canada Agreement, the replacemen­t trade deal for NAFTA negotiated under Donald Trump, does not include specific government procuremen­t provisions between the U.S. and Canada. The deal envisioned relying instead on the terms of the World Trade Organizati­on’s general procuremen­t agreement, to which both Canada and the U.S. are signatorie­s.

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