GHY Tradelines

(Wall Street Journal – Corey Boles)

The House passed a bill to expand lending by the Export-Import Bank, a federal agency aimed at helping U.S. exporters that had found itself thrust into a congressional fight over the size and scope of the federal government. The bill, if approved by the Senate and signed by the president, would extend the bank’s mandate through Sept. 30, 2014, and would gradually raise its lending limit to $140 billion from $100 billion now.

Senate leadership aides for both parties have said they expect that chamber to approve the bill within days. Renewing and expanding the authority of the bank, which helps U.S. companies sell products abroad by providing foreign buyers with loan guarantees and some forms of limited insurance, is a priority of the Obama administration as it seeks to boost U.S. exports. Read more here.
 

(Associated Press – Martin Crutsinger)

The U.S. trade deficit rose in March at the fastest rate in 10 months. A rise in consumer goods lifted imports to a record level, outpacing a solid gain in U.S. exports. The Commerce Department said Thursday that the trade gap widened to $51.8 billion in March, up from $45.4 billion in February.

Imports rose 5.2% to a record $238.6 billion, reflecting more foreign oil, autos, cell phones and clothes. Exports increased nearly 3% to $186.8 billion. Sales to Europe reached an all-time high despite the region’s debt crisis. Economists caution that export growth, a bright spot for the U.S. economy, could slow in coming months if more European countries fall into recession. Read more here.
 

(Reuters)

Canada’s trade surplus rose to C$351 million ($351 million) in March from $273 million in February as imports declined at a greater rate than exports, Statistics Canada said on Thursday. The surplus was smaller than the C$500 million predicted by market analysts.

Exports fell by 0.4%, the third consecutive monthly decline, as energy shipments decreased by 8.9%. Exports are particularly important for Canada, accounting for about 31% of gross domestic product in 2011. Read more here.
 

(DFAIT)

On May 3, 2012, the Government of Canada concluded the regulatory process issuing General Export Permit No. 43 – Nuclear Goods and Technology to Certain Destinations (GEP 43) and General Export Permit No. 44 – Nuclear-related Dual-use Goods and Technology to Certain Destinations (GEP 44) and cancelling General Export Permit No. 27 – Nuclear-Related Dual-Use Goods.

As a result of the introduction of these new regulations, exporters will no longer be required to obtain an individual export permit from Foreign Affairs and International Trade Canada, when exporting eligible goods and technology to eligible destinations, as identified in GEP 43 and GEP 44, when accompanied by a valid export licence from the Canadian Nuclear Safety Commission.

The order will be published in the May 23, 2012 edition of the Canada Gazette, Part II. Please see the Notice to Exporters No. 181 here.
 

(CABC)

Citing departure from existing ‘Buy America’ preferences, CABC offers solution for amended language in the Senate surface transportation reauthorization bill

For 25 years, the Canadian American Business Council (CABC) has supported efforts to update and improve infrastructure and spur economic growth and job creation on both sides of the Canada/U.S. border.  However, upon learning about latest provisions announced to the Moving Ahead for Progress in the 21st Century Act (“MAP Act”) in the U.S. Congress, the CABC yesterday issued a letter to all conferees appointed to work out a compromise on the bill calling for an exemption to protectionist provisions.

“The proposed MAP Act includes provisions that represent a significant departure from existing ‘Buy America’ preferences,” the letter stated.  “Specifically, if at least one contract for a project receives any federal funding under this act, then all contracts for a project, regardless of their funding source, would be subject to Buy America preferences.”

Alluding to concerns about the ‘Buy America’ provisions’ applicability to Canada and their economic impacts on both countries, the CABC is asking the Senate to consider amending the ‘Buy America’ provision so that purchases of goods from Canada not be deemed to violate this requirement.

The letter continues: “‘Buy America’ provisions applied to Canadian companies will inhibit, not create, economic growth in both the U.S. and Canada given the integrated nature of our two countries’ economies.  To enhance our countries’ collective competitiveness, it is important to reduce barriers to trade and investment and transition away from outdated ‘Buy America’ provisions that fail to recognize the integration of our economies.”

The CABC is also drawing on support from business leaders on both sides of the border.  In March, the CABC issued a survey that uncovered the top-of-mind issues in 2012 for business leaders in the United States and Canada.  Cited among the top three issues was seeing Canada secure an exemption to Buy America provisions of procurement legislation.

To view a full copy of the letter and to learn more about the CABC’s position on this provision, please contact Emma Rigby, CABC Executive Director at 202.496.7906 or erigby@mckennalong.com.