‘Buy American’ bill miffs Canadians
Consular official says protectionist steel, iron measure will hike costs.
A proposed new “Buy American” provision for iron and steel that’s advancing in the Texas Legislature already is rattling a foreign government — Canada.
Our neighbor to the north hasn’t been on the list of international trade scofflaws — which includes China, South Korea and Turkey — that Texas lawmakers pushing the protectionist measure have contended are costing U.S. and Texas jobs by dumping cheap iron and steel in the U.S. market.
But Canadian officials voiced concern this week about the potential for Texas to enact a “Buy American” law for iron and steel. Among other things, they pointed out that Canada actually buys more iron and steel from Texas than it sells here, leaving the state with a Canadian trade surplus of more than $100 million for the commodities in 2016.
“While Canada may not be the target of Buy America rules, we pay for them disproportionately given our volume of trade and deeply integrated supply chains,” said Henry Wells, a senior officer with the Consulate General of Canada.
Wells made the comments in an email to state Rep. Rafael Anchia, D-Dallas, who chairs the House Committee on International Trade and Intergovernmental Affairs.
Anchia read portions of the letter on the House floor Friday morning, just before House members voted 109-33 to give the “Buy
American” provision final approval. Anchia, who voted against the measure, said he wasn’t attempting to hold up the bill but considered it important for state lawmakers to hear what Canadian officials had to say prior to the vote.
“Oftentimes, I get communications from our partners on trade,” he said before reading the statement.
The Texas Senate already has approved a version of the “Buy American” law. Now that the House has as well, either body can accept the other’s as written, or they can work out the differences between the two in a conference committee.
Under either measure, Texas state government entities would be required to buy iron and steel from U.S. suppliers for big construction projects — such as state buildings, roads and bridges — unless the price of doing so is more than 20 percent higher than the cost of purchasing imports.
The state would be allowed to buy from a foreign company if U.S. supplies aren’t available for a specific project. An exemption also exists if compliance is deemed “inconsistent with the public interest” in individual cases.
The version approved by the Senate exempts some water infrastructure projects, while the House version makes clear that the “Buy American” provisions only cover raw iron and steel, not finished manufactured goods containing iron and steel.
In his communication with Anchia, Wells noted that Canada is the “largest single country market for U.S. steel exports” and accounts for more than half of all U.S. steel exports.
“The Canada-U.S. steel industry is deeply integrated and has significant cross-ownership,” he said. “Buy America restrictions disrupt efficient business operations making projects more expensive.”
The state would be required to buy iron and steel from U.S. suppliers.