End Near for ‘Buy American’

(National Post – John Ivison)

Obama to use executive power to skirt rule: sources

The surprise loss of Ted Kennedy’s Senate seat to the Republicans prompted fears in Canada that President Barack Obama may attempt to win back middle-class America by expanding “Buy American” restrictions.

But it seems those fears have been misplaced. Sources within the Obama administration say that an agreement to fix Buy American is close to being concluded and could be announced within days. The President is said to be resolved that future economic growth can only be achieved by boosting exports and keeping markets open, rather than by raising tariff walls.

Because Mr. Obama cannot rely on Congress to pass legislation exempting Canada from Buy American provisions, the complicated deal will rely on the President using his executive power to treat sectors of the Canadian economy as American, by claiming supply chains are so integrated they cannot be separated.

When confirmed, the agreement will be a major relief for Canadian companies doing business in the United States, not to mention for U. S-based companies who export north of the border. The U.S. Recovery and Reinvestment Act included sections that all iron, steel and manufactured goods used in projects paid for by stimulus funding must be sourced in the United States. The concern in Canada was that Buy American might be extended to all state and city level government procurement. Read more here.