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.
 

(CBC News)

Brian Masse, the NDP’s Canada-U.S. border critic, wants Ottawa to use Canadian steel in the construction of a new international crossing between Windsor and Detroit.

Masse’s made-in-Canada call comes in the wake of a Detroit News article published Friday that alleges the Canadian government will choose to use Chinese steel instead.

The article also alleges that the steel’s origin is the only hindrance left before the State of Michigan finally passes legislation that would allow construction of the new bridge.

The U.S. federal government has a policy that requires only domestically produced materials, when available, be used in federal construction projects.

“Why are we continuing to use made-in-China products that are cheaper, instead of putting our own workers back to work here in Canada?” Masse asked in a media release. Read more here.

span style=”font-size:85%;”(CBC.ca)/spanbr /br /Canadian clothing manufacturers are hoping the federal government will use Thursday’s budget to boost the number of articles bearing the ‘Made in Canada’ label by cutting duties on the importation of raw materials.br /br /The North American manufacturing industry has struggled since free trade opened the market to clothing from abroad.br /br /Fifty-per cent of jobs in the Canadian textile industry were lost over the past decade after the federal government dropped tariffs on cheaper-made clothing from overseas, according to a lobby group representing some 500 Canadian manufacturers.br /br /Though higher gas prices and changing attitudes have provide a recent boost to the industry, high duties remain a serious obstacle for Canadian manufacturers according to the Canadian Apparel Federation.br /br /“You could have a garment that is made in Vancouver, or Montreal or Toronto— and you are paying up to 14 per cent duty just on fabric — so that makes you uncompetitive,” said the group’s executive director, Bob Kirke.br /br /The increasing cost and uncertainty involved in importing goods from halfway around the world is forcing many companies to reconsider imports in favour of domestic production, Kirke said. Read more a href=”http://www.cbc.ca/consumer/story/2010/03/03/mtl-textile-manufacturing.html”here/a.

span style=”font-size:85%;”(Bridges Monthly – Marie Wilke)/spanbr /br /The ‘buy national’ clauses that numerous governments have included in their economic stimulus packages are causing growing concern. For many developing countries, bilateral investment treaties may be the best option for legal recourse against such provisions.br /br /Despite their likely trade-distorting effects, buy national requirements appear to be consistent with WTO rules on trade in goods and services (the GATT and the GATS), although they may well breach commitments made under the plurilateral Government Procurement Agreement (GPA). The GPA, however, applies to signatories only, which leaves the many developing countries that have refrained from joining the agreement without a possibility for legal recourse. For emerging markets, such as Argentina, Brazil and India, this causes major distress.br /br /Turning away from the multilateral trading system, about 2,800 bilateral investment treaties (BITs) that provide for investor-state arbitration in international fora, such as the International Centre for the Settlement of Investment Disputes (ICSID), might serve as a basis for legal challenges. It is conceivable that investors engaged in the importation of products manufactured abroad, possibly even directly involved in bidding processes for government procurement contracts, will challenge buy national clauses under bilateral investment agreements with reference to (i) the substantive assurance of national treatment and (ii) the general principle of fair and equitable treatment. Read more a href=”http://ictsd.net/i/news/bridges/54337/”here/a.

span style=”font-size:85%;”(Reuters-NYT)/spanbr /br /North American business groups urged leaders of the United States, Mexico and Canada on Friday to rein in “buy local” provisions they called a threat to free trade and economic growth.br /br /“In this global economic downturn, it is imperative that the three countries work together more intensively than ever to make the most of their strengths and set the stage for robust and sustained economic recovery,” the North American Competitiveness Council said.br /br /Mexican President Felipe Calderon will host U.S. President Barack Obama and Canadian Prime Minister Stephen Harper on Sunday and Monday in Guadalajara for an annual meeting of North American leaders.br /br /The advisory group made up of leading U.S., Mexican and Canadian business associations had its sternest advice for Obama, who they urged direct his administration to “clarify its intent and interpretation” of Buy American provisions passed as part of the $787 billion economic stimulus bill.br /br /Obama, responding to an international outcry over the measure, persuaded Congress to exempt free-trade partners like Canada and Mexico from the strict requirement that public works projects funded by the bill use only U.S.-made goods. Read more a href=”http://www.reuters.com/article/latestCrisis/idUSN06339273″here/a.

span style=”font-size:85%;”(Embassy – Leslie Campbell)/spanbr /br /After enduring years of border thickening and complaining with little result, the “Buy American” provision in President Obama’s stimulus bill may have gone one step too far, awakening Canada from its torpor and simultaneously uniting the federal, provincial and municipal governments around one problem – something few other issues can do.br /br /As is now well known, Obama’s stimulus plan, formally called the American Recovery and Reinvestment Act of 2009, contained a provision stipulating that all of the “iron, steel and manufactured goods used in the project are [to be] produced in the United States.”br /br /The Canadian Manufacturers and Exporters (CME) noted in a May 25 briefing document that two subsequent bills, the Water Quality Investment Act, and the Green Schools Act contain similar protectionist clauses and the CME fears that most new appropriations bills will contain similar language.br /br /Initial hopes that Canada would be protected by existing trade agreements proved mostly false. Much of the stimulus money is transferred to the states and local government for “shovel-ready” public projects to be started immediately. State and municipal procurement preferences are not covered under existing international treaties.br /br /The Canadian government has been active on the issue since Buy American first emerged, and the Canadian Embassy in Washington brought all 13 of Canada’s consul generals to Capitol Hill on June 9 [see video below] to hold meetings with a reported total of 75 members of Congress and staff. Read more a href=”http://www.embassymag.ca/page/view/canada_washington-6-17-2009″here/a.

span style=”font-size:85%;”(Globe amp; Mail)/spanbr /br /U.S. states and municipalities buying goods for infrastructure projects are discriminating against Canadian manufacturers, despite Ottawa’s lobbying efforts. Six panelists offer their solutions: William Robson (president of the C.D. Howe Institute), Ken Lewenza (president of the Canadian Auto Workers union), Chuck Gastle (a trade lawyer at Bennett Gastle P.C.), John Hayward (president of pump maker Hayward Gordon Ltd.), Gordon Giffin (former U.S. ambassador to Canada) and David Miller (mayor of Toronto).br /br /Click a href=”http://www.theglobeandmail.com/news/opinions/what-to-do-about-buy-america/article1180680/”here/a to read the article.

span style=”font-size:85%;”(National Post – Terence Corcoran)br //spanbr /strongCanada has more to lose by playing the protectionist gamebr //strongbr /The great steam boats of Canadian trade retaliation are leaving port, heading off in all directions. There’s the SS Michael Ignatieff, who appeared set to engage the United States in a retaliatory skirmish over Buy American policies. “We need to remind the Americans that we’ve got a multi-billion dollar municipal and provincial procurement market in this country,” Mr. Ignatieff told the Federation of Canadian Municipalities (FCM) on the weekend. “Americans have unfettered access to it right now, but if they shut down their markets, there will be consequences.”br /br /Thus fired up, Canada’s municipalities voted to adopt something called a “fair trade” resolution that establishes a “common front” to try to stop protectionism built into U. S. economic stimulus legislation. Under the stimulus laws, state and local municipal infrastructure projects can only buy international goods from countries that have local procurement agreements with the United States.br /br /Many countries have such agreements, and as a result the Buy American provisions do not hurt their industries. But Canada does not have local procurement pacts with the United States, which means Canadian businesses cannot participate in the $780-billion U. S. economic stimulus bonanza.br /br /The FCM mayors said they “stand united” – sort of, the vote being 189-175 – in threatening “countervailing procurement measures” against the United States. So as not to appear to be fomenting an immediate trade war, the resolution said the mayors are “holding back” their endorsement of countervailing trade action for 120 days.br /br /This is all mostly sabre-rattling, but it can be dangerous. Among the dissenters was Toronto Mayor David Miller. The left-wing mayor of Canada’s biggest city suddenly emerged as a free-trader. “It is appropriate to ask for free trade; it is not appropriate to make threats.” Read the complete editorial a href=”http://network.nationalpost.com/np/blogs/fullcomment/archive/2009/06/08/terence-corcoran-say-no-to-buy-canadian.aspx”here/a.

span style=”font-size:85%;”(Ottawa Business Journal)/spanbr /br /A private member’s bill introduced Monday by the New Democrats would require the federal government to give priority to Canadian companies when purchasing goods and services. Bill C-392, known as the Made in Canada Act, makes exceptions for emergency purchases, cases where there are no Canadian bidders or if the procurement falls under international trade agreements.br /br /“This bill will help build new markets for Canadian suppliers, strengthen sustainability and our environmental commitments, and encourage Canadian entrepreneurship,” said NDP MP Irene Mathyssen in a statement. The bill defines a Canadian product as one in which more than 50% of the total value is manufactured, produced or assembled in Canada.br /br /Canadian politicians continue to voice concerns over “Buy American” provisions attached to U.S. stimulus legislation that are appearing in other pieces of legislation, such as funds for local governments to improve drinking water systems. Last week, Conservative Industry Minister Tony Clement said the measures are “of grave concern to Canada” and warned protectionist impulses could backfire on the U.S. economy.