Biden signs strict ‘Buy American’ order
Canadian Chamber of Commerce fears policy will make new contracts ‘difficult’
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.