GHY Tradelines

(Globe & Mail)

The Conservative government and the Michigan governor’s office have secured a deal to build a second bridge between Windsor and Detroit – a historic accord aimed at unclogging North America’s most important trade artery after decades of setbacks. [...]

The agreement requires Canada and the United States to compromise on a hot-button subject: the rules stipulating where the material to build the bridge and associated U.S. infrastructure must come from. Canada would have preferred a no-restrictions approach to steel and other materials, while Michigan had favoured a “buy American” rule.

The tradeoff is that all iron and steel for any component of the bridge, or the approaches and customs plaza on the U.S. side, must originate from Canada or the United States. The measure is an attempt to reassure Michiganders who were warned by bridge opponents that the steel might come from cheaper overseas suppliers in China or South Korea. Read more here.
 

(Marketwire)

Organizations Partner to Promote Job Creation & Encourage Boycott of Products Made in China

TAP America, a non-profit organization dedicated to strengthening America, Made In the USA Foundation and the American Job Alliance today announced the ‘Buy American Coalition’ to stimulate our national economy, protect our nation’s values and weaken authoritarian regimes abroad that violate human rights.

The formation of the ‘Buy American Coalition’ comes on the heels of the latest troubling news out of China. Customs officials have seized thousands of pills made from the flesh of dead babies, the product of the Chinese Communist Party’s forced abortion policy. The Chinese dissident who fled to the U.S. Embassy, Chen Guangfeng, was imprisoned and persecuted by Communist officials for protesting this inhuman practice.

TAP America Founder Mark Bloome said, “The ‘Buy American Coalition’ is of great importance to our country now more than ever. We are seeing our jobs being hollowed out in America by unfair competition from China. Working with both the American Jobs Alliance and Made In the USA Foundation, we believe that this issue is large enough to require examination by multiple organizations. We at TAPamerica.org are leading the charge.” Read more 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.

(Vancouver Sun – Peter O’Neil, Postmedia News)

Canadians have every reason to be concerned about possible U.S. Congress protectionist actions against ports, despite criticism by the American ambassador that concerns are unwarranted, according to a newly-published essay by a transport industry analyst.

Ambassador David Jacobson assured a business audience in Ottawa last month that Washington has no plans “to divert traffic to Seattle from Vancouver by imposing tariffs or taxes or fees” on goods shipped from Canadian ports to U.S. markets.  “If that somehow changes I promise that I’ll personally come back here to the Canadian Club, with egg on my face, and explain how I got it wrong,” Jacobson said in Ottawa.

But former senior federal bureaucrat John Higginbotham argues that there’s plenty of evidence Canadians should be concerned about a study being done by the U.S. Federal Maritime Commission for the U.S. Congress. Read more here.
 

(Embassy – Carl Meyer)

The American lawmaker who may have stoked the fire of a potential Canada-U.S. trade war is defending his efforts in the wake of a fresh crop of cross-border disputes.

Democrat Chris Murphy, who represents Connecticut’s 5th congressional district, originally wrote to United States President Barack Obama on Sept. 7 urging him to insert a Buy American provision in his administration’s $447-billion American Jobs Act that would shut out foreign firms.

The inclusion of that provision led to fresh questions in Ottawa whether the Harper government’s efforts to sew up the Buy American issue in 2009-10 had any lasting effect – especially after U.S. Ambassador David Jacobson called on Canadians on Oct. 18 to ignore the provision. Canada-U.S. expert Chris Sands has called the new provision an “embarrassing defeat for Canadian diplomacy.”

In an exclusive interview with Embassy, Mr. Murphy said it wasn’t lost on him that pushing for the provision would irritate the country’s biggest trading partner. But he said his obligation was to protect jobs in his state. Read more here.
 

(Huffington Post)

As Washington continues to defend the contentious Buy American provisions outlined in the U.S. jobs bill, it has become abundantly clear that, for policymakers south of the border, Canada is not top of mind.

But according to a former Canadian diplomat who has been on the inside of major trade policy negotiations with the U.S., this reality, however harsh, simply reinforces a stubborn fact of life: No matter how friendly relations with our biggest trading partner may seem, Canadians must wage a permanent campaign to protect our interests south of the border.

“For the U.S., we’re not a problem, and therefore we’re not on the immediate agenda,” Colin Robertson told The Huffington Post. “We Canadians have to constantly be making the case to our American market, reminding them … that we’re also their biggest market.”

It’s an effort that Robertson – who helped negotiate and implement the North American Free Trade Agreement (NAFTA) – says is comprehensive, despite the fact that it may not always seem that way.   “Are we talking to all the various parties? We are, but stuff happens, and will continue to happen,” he says. “It’s like Whac-A-Mole. You’ve got to constantly be on guard, because [these kinds of protectionist provisions] are popping up in all kinds of places.” Read more here.
 

(DFAIT)

In these challenging economic times, there is no better American job-creator than trade with Canada and vice versa, says Minister Fast

The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, today concluded a productive two-day visit to Washington to reinforce the vital importance of a strong Canada-U.S. relationship that benefits Canadians and Americans alike. His trade visit to Washington included talks with his counterpart, United States Trade Representative Ron Kirk, as well as other government officials.

“History shows that deeper and stronger trade ties are key to the global economic recovery. Free and open trade ties between the U.S. and Canada are fundamental to improving the prosperity of Americans and Canadians alike,” said Minister Fast.

“Our government’s top priority is to create jobs, increase prosperity and protect and strengthen the financial security of Canadians. Broadening and expanding access to the U.S. market is a key part of our government’s job-creating, pro-trade plan.”

In their face-to-face talks, both Minister Fast and U.S. Trade Representative Kirk expressed the view that strengthening the Canada-U.S. friendship will bring greater prosperity to both countries, and that in these challenging economic times governments must work together to address common challenges.

“The importance of the Canada-U.S. trade relationship, and the jobs and prosperity it supports on both sides of our shared border, couldn’t be clearer,” said Minister Fast. “All told, the jobs of over eight million Americans depend on trade with Canada, just as over two million Canadian jobs depend on trade with the U.S.”

Minister Fast met with Senator David Vitter, Ranking Member, Transportation and Infrastructure Subcommittee, Senate Committee on Environment and Public Works, and Senator John Thune, Ranking Member, Subcommittee on International Trade, Customs, and Global Competitiveness, Senate Committee on Finance.

Minister Fast also met with leaders of U.S. business associations, including the Coalition of Service Industries, the U.S. Chamber of Commerce, the National Foreign Trade Council, the American Farm Bureau Federation and the Canadian American Business Council, as well as the Washington representative of Canadian Manufacturers & Exporters.

“I look forward to a sustained engagement with our American friends which will continue to help long-term prosperity and economic growth to our countries’ mutual benefit,” concluded Minister Fast. “In my meetings here in Washington, our American friends and I shared the sentiment that we must do our part to ensure that the Canada-U.S. relationship, which is the envy of the world, gets even stronger as we go forward together in these challenging times.”

About $1.8 billion in goods and services cross the border between Canada and the United States every day, or about $1.2 million every minute. Over 4,500 Canadian-owned businesses in 17,000 U.S. locations directly employ over half a million Americans.
 

(CBC News – Meagan Fitzpatrick)

Liberals are accusing the Conservative government of failing to protect Canadian businesses from protectionist measures in the United States and are anxious for the Buy American issue to be put before a parliamentary committee.

Wayne Easter, the party’s trade critic, said at a news conference on Parliament Hill Tuesday morning that there is an urgent need for the international trade committee to study the Buy American provisions and their impact on Canada. He also wanted hearings on the negotiations with the European Union on a major trade deal that is supposed to be signed by next year.

He proposed two motions for the studies at the international trade committee on Tuesday, “the purpose of which is to ensure that Canadians are provided with clarity on the Harper government’s agenda with respect to trade issues.”

“More importantly, on the failure of the government to defend the interests of Canadian businesses in the face of growing protectionism south of the border in the form of the new Buy American initiative,” said Easter.

The government had proposed its own motion for a Buy American study, but Easter said it’s meaningless and wouldn’t allow for an in-depth study of the provisions. The government’s motion then passed at the meeting Tuesday and the committee agreed to study both Buy American and the EU trade deal and part of Easter’s motion was also considered. The parties will now propose witnesses and the chair of the committee will determine the final list. Read more here.

(Laura Dawson and Paul Frazer — Toronto Star)

If the new American Jobs Act passes, Canadian manufacturers and suppliers will again feel the squeeze of Buy America rules that restrict how U.S. state and local governments can spend federal stimulus money. Is Buy America a sign that the United States wants to torpedo our negotiations on better borders and smarter regulations? No. The White House designed the act with the needs of unemployed Americans in mind. Canada did not figure into the equation. But Buy America is indicative of the serious problem of ad hoc economic management that has become the norm in Canada-U.S. relations.

Instead of working together on strategies to reduce internal problems and build our regional competitiveness in the world, we hop from crisis to crisis.

Blocking imports might have preserved jobs when goods were produced in one country and shipped to another but integrated, cross-border production means that a disruption to any node in the supply chain has far-reaching economic consequences. If the United States blocks the importation of a Canadian engine that uses components made in the United States, then those American component-makers will be hurt. Read more here.
 

(Tim Harper — The Chronicle Herald)

Chris Murphy is hardly a household name in Canada and he probably rarely gives this country a passing thought. Yet the Connecticut Democratic congressman is one of the prime suspects behind the latest cross-border trade squabble.

As chair of the Buy American caucus in the House of Representatives, Murphy – who seeks to ascend to the U.S. Senate next year – has been beating the protectionist drum for years and made sure to remind President Barack Obama of the importance of having such a clause in his American Jobs Act.

“Our past failures to adopt strong Buy American provisions have cost countless American manufacturing jobs,’’ Murphy said in a letter to Obama before the president unveiled his bill on Sept. 8. He pushed Obama to ensure that Buy American bulks up and closes its many loopholes.

In other words, shut Canada out of any part of close to $80 billion of infrastructure work south of the border. Read more here.
 

(CFIB)

The Obama Administration’s recent legislative proposal to include ‘Buy American’ trade restrictions on portions of the stimulus contained within the draft American Jobs Act of 2011 runs contrary to a long-standing shared commitment by the Canadian and US governments to free and open trade. Canadian Federation of Independent Business (CFIB) president Catherine Swift stated, “We are very disappointed to hear about the inclusion of ‘Buy America’ provisions in the recent American Jobs Act announcements.  Protectionist policies like this have never been shown to be effective, and indeed will end up punishing U.S. consumers by imposing higher prices at a time when consumers are already beleaguered by a difficult economic climate.”

“Both Canada and the U.S. have a strong entrepreneurial presence with small- and medium-sized enterprises (SMEs) accounting for roughly half of GDP, employment and the bulk of net new jobs. Open bilateral trading arrangements are vital to SMEs on both sides of the border,” said Swift. Adding, “CFIB is pleased to see the Canadian government moving quickly on this matter to ensure the many small- and medium-sized businesses who actively trade with the U.S. are not harmed at a time when business conditions are already fragile.”

For many years, CFIB has been very active on border and trade issues and has lobbied to ensure that low-risk; low-volume trade by Canadian smaller firms is not overlooked. CFIB will continue to work with the government to oppose this latest threat and promote policies that support open trading relationships in the U.S. and elsewhere. “We believe long-term economic growth and good jobs are best protected and created by broadening and deepening our trading relationships and removing trade barriers, not restricting free and open trade. As well, these proposed restrictions, if enacted, will send negative signals to governments around the world that trade restrictions are an acceptable policy choice,” concluded Swift.
 

(Transport Intelligence – Cathy Roberson)

As the U.S. struggles with high unemployment and a listless economy, it is faced with an infrastructure system that desperately needs updating. The last notable investment in U.S. infrastructure dates to the 1950-1960s period when the interstate system was built. Many changes within the country have occurred since then. However, the infrastructure has not been able to keep up due to the lack of adequate funding.  The U.S. currently only invests about 2.5% of GDP on infrastructure; compared to China, which invests around 11% of GDP on infrastructure, and Europe, which invests about 5% of GDP on such projects. It is evident from this comparison that the U.S. is slipping as a major force within the global economic trade community. Read more here.
 

(The Toronto Star – Les Whittington)

The latest outbreak of protectionism from the United States government flies in the face of Ottawa’s much-touted effort to work with Washington to ease trade restrictions along the border, the Canadian Chamber of Commerce says.

“It’s of considerable concern to us,” Chamber president Perrin Beatty told the Toronto Star. “The timing is, of course, terrible in that it contaminates the discussions on how we can make the border function more effectively.

Speaking of the new border deal about to be announced by Prime Minister Stephen Harper and President Barack Obama, Beatty said, “The whole point of the exercise was to look at how we can enhance trade rather than putting impediments in the way.”

The fresh threat of trade war between the Harper government and the White House stems from the $447-billion (U.S.) jobs legislation announced by Obama last week. It includes Buy American provisions that could exclude Canadian companies from bidding on billions of dollars worth of economic stimulus projects south of the border.

The move, which caught the Canadian government off guard, comes as Washington and Ottawa are in the final stages of negotiations over an historic bilateral pact meant to streamline border operations and enhance security and intelligence cooperation by the two governments. David Jacobson, the U.S. ambassador to Canada, says the deal may be announced by Harper and Obama in several weeks. Read more here.
 

(Minister for International Trade)

The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, today issued the following statement on U.S. President Obama’s recent legislative proposals – the American Jobs Act:

“On September 8, 2011, U.S. President Obama outlined his proposals for the American Jobs Act.

“The U.S. Administration has just released details of the American Jobs Act. The Administration is proposing the inclusion of Buy American provisions as a part of the infrastructure funding proposal.

“Our government is committed to delivering free trade leadership and Canadians can count on our government to defend free and open trade on the world stage.

“In this fragile economic recovery, we know history has shown protectionist measures stall growth and kill jobs.

“I have instructed Canadian officials to initiate the consultation process that was established as part of the 2010 Canada-U.S. Agreement on Government Procurement.

“Our government will raise with the Obama Administration and Congress concerns regarding measures that impede access for Canadian workers and businesses to the U.S. market, as we did for earlier U.S. stimulus programs.”
 

(Les Whittington — Toronto Star)

Canadian exporters could be hurt by another round of protectionist hurdles in the United States because of Buy America provisions in President Barack Obama’s $447 billion (U.S.) jobs bill.

Trade experts say the legislation, which proposes more than $100 billion in spending on a wide range of construction and renovation activity, contains a clause requiring contractors to use American-made iron, steel and manufactured goods in the federal government-funded projects.

“It’s always a concern” when U.S. legislation includes possible protectionist measures, said Gary Doer, the Canadian ambassador to Washington.

But he said Canadian officials have just received details of Obama’s proposed American Jobs Act and it’s too early to say for sure if the legislation, when passed, will contain Buy America clauses menacing Canada’s exports. Read more here.

Related: New Buy American Provisions in Obama’s Jobs Act, Much to Canadian Dismay (Canadian Business)
 

(Keith Bradsher — New York Times)

The military appropriations law signed by President Obama on Friday contains a little-noticed “Buy American” provision for the Defense Department purchases of solar panels — a provision that is likely to dismay Chinese officials as President Hu Jintao prepares to visit the United States next week. […]

Representative Maurice Hinchey, Democrat of New York, said he had fought for the provision to be included in the bill.

“We’ve had a lot of money taken out of this country and invested in other places around the world, particularly China, and particularly in alternative energies,” he said in an interview by phone. “For them to be producing alternative energy, that’s great, but we need to do it ourselves, and as much of it as possible.” Read more here.

(Montreal Gazette – Andrew Mayeda, Postmedia News)

Buy American. Negotiations for broader agreement on horizon

Canada will enter negotiations with the United States early next year in the hopes of reaching a broader, long-term agreement based on the Buy American compromise the two sides reached earlier this year, says Trade Minister Peter Van Loan.

The worst fears of Canadian exporters – getting frozen out by their trading partner – became a reality when the U.S. government included Buy American provisions in its $787-billion U.S. economic-stimulus legislation. The bill required all iron, steel and manufactured goods used in construction projects that received stimulus funding to be produced in the United States. […]

Van Loan declined to provide a timeline for a wider deal, noting that individual states will have to be convinced. “It’s too early to predict what the timeline would be, because there’s so many variables. You’re not just dealing with a national government, you’re dealing with specific states,” he said, adding that any deal likely would be separate from the North American Free Trade Agreement. Read more here.

(National Post – Tamsin McMahon)

A dispute over leather conference chairs for an Ohio courthouse has the potential to ignite a new Canada-U. S. trade war over the pervasive “Buy American” policy, a Canadian diplomat has warned.

Last month, Franklin County, Ohio, issued a bid for US$1.3-million worth of furniture for its new $100-million, seven-storey glass courthouse. Read more here.

(Jenny Lee — Vancouver Sun)

Growing protectionist measures in the U.S. have not had a great impact on Canadian small business, an RBC Royal Bank vice-president says.

“Evidence substantiates the position that growing protectionism measures have not had a great impact on the profitability of Canadian SMEs [small and medium enterprises] and that these enterprises have focused on other markets lately, other than the U.S., to take advantage of growing opportunities or refocused their efforts on the domestic economy,” Marie-Lynne Desrochers, vice-president of business accounts and global transaction solutions, told a Canadian American Business Council policy forum in Vancouver on Friday. Read more here.

(The Globe and Mail – Alan Gottlieb and Colin Robertson)

Allan Gotlieb, a former Canadian ambassador to the United States, is senior adviser to Bennett Jones LLP. Colin Robertson, the first head of the Washington embassy’s advocacy secretariat, is vice-president of the Canadian Defence and Foreign Affairs Institute and strategic adviser to McKenna Long and Aldridge LLP.

U.S. The U.S. Congress has undergone another sea change as a result of Tuesday’s midterm elections and the Republican wave with a Tea Party crest. What has not changed is the requirement for vigilance in defence of Canadian interests. Those interests are our economic prosperity, our need for a wider and enhanced international trading system, and an open border between our two countries.

From the standpoint of our interests, Congress is the organ of government of greatest concern to Canada. In the U.S. system of checks and balances, the three branches of government are said to be co-equal, but they’re not, by constitutional design of the Founding Fathers. Congress, not the presidency, is primus inter pares.

When the levers of power are divided between the two principal adversaries in Washington, there’s a better chance for bipartisan rule-making than when power is monopolized. This is because without a deal, there’s no legislation. Such is the potential for economic benefit or harm caused by decision-making in an economy the size of the United States, slowness of response may well be preferable to hasty action and, if gridlock or paralysis is a result, it might well be preferable to bad legislation.

The world is likely to be better off through avoidance of monopolization of the levers of power by one party in Washington. But foremost of the countries that would benefit would likely be Canada, because our dependency on the economic health of the U.S., even if diminishing somewhat, has no equal. Read more here.

Related: U.S. election is good news for Canada (Montreal Gazette)