Friday, February 6, 2009

U.S. Pledge Leaves Canada Exposed

(Barrie McKenna — Globe & Mail)

Amended Buy American clause fails to offer blanket exemption Ottawa seeks

A pledge by the United States to honour its trade commitments would still leave Canada dangerously exposed to Buy American restrictions in the massive economic-stimulus package.

An amended Buy American clause included in the stimulus bill being debated by the U.S. Senate is a step in the right direction, but it’s a long way from the blanket exemption for Canadian products sought by Ottawa, according to trade experts and key exporters.

The Senate had been expected to vote on the bill last night but stopped work on it without completing its negotiations.

In Williamsburg, Va., President Barack Obama, speaking to Democrats at a retreat, predicted that if the bill does not go forward quickly, “an economy that is already in crisis will be faced with catastrophe.”

Warning against continued “gamesmanship” in debate on the bill, he said that no one would get everything they wanted, but that the legislation should move forward because it is in the interests of the American people.

He did not directly address the Buy American restrictions that have worried Canada.

“It leaves a wide hole for favouring U.S.-made steel and other goods over Canadian products,” Toronto trade lawyer Lawrence Herman argued. “[There’s] absolutely no guarantee that, in specific cases, the preference won’t apply to the detriment of Canadian exports.”

Canadian steel fabricators, who make everything from bridge trusses to building frames, warned that the altered language would protect only direct U.S.-government spending when the bulk of federally funded infrastructure is done by states and cities. Read more here.