The National Post is reporting that Canadian authorities have reached a “resolution to the nearly year-long dispute on controversial Buy American provisions has been struck and could be formally announced later on Thursday.” However, the article on the Web site noted that: “A representative for International Trade Minister Peter Van Loan could not be immediately reached for comment.”
If the report turns out to be accurate, it is good news indeed for those Canadian companies who are positioned to participate in projects launched below the border under the American Recovery and Reinvestment Act—projects which are receiving nearly US$800-billion of stimulus funding. Currently, the Act prohibits foreign-produced iron, steel and other manufactured goods from being used in qualifying projects—the so-called “Buy American” provisions.
For months now, United States Congress has been reluctant to pass legislation exempting Canada from those Buy American provisions. Consequently, President Barack Obama is reportedly planning a maneuver that will allow him to use his executive power to enable sectors of the Canadian economy to be treated as American by claiming that cross-border supply chains are so integrated they cannot be separated.
I assume that, with this new deal, Canadian businesses will also be able to participate in projects launched under any new stimulus-based initiatives, avoiding similar protectionist measures.
Ironic, isn’t it, that the new arrangements with the United States will make trading with them more open than is inter-provincial trading. But parochial self-interest has ever been the hallmark of provincial politics—a sort of beggar-thy-neighbour approach.
Until American stimulus-based initiatives were at stake, Canadian provinces were quite content to remain outside NAFTA provisions that might have excluded them from having their own “buy domestic” procurement policies.
Now our provinces are avid free-traders.
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© 2009 Russell G. Campbell
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