Canada Concerned At 'Buy American' Proposals

by Mike Godfrey, Tax-News.com, Washington

21 October 2011

Canadian and American ministers have met to talk trade, with the Canadian Minister of International Trade and Minister Ed Fast stressing that, because of the importance of the trade relationship, any restrictive policies, including "Buy American" provisions, would hurt both parties.

Ed Fast recently concluded a two day visit to Washington, where he reinforced the the vital importance of a strong Canada-US relationship, and met with his counterpart, US Trade Representative Ron Kirk, as well as other government officials. In their face-to-face talks, both expressed the view that strengthening the bilateral relationship will bring greater prosperity to both countries, and that in these challenging economic times governments must work together to address common challenges. Fast said, "Free and open trade ties between the US and Canada are fundamental to improving the prosperity of Americans and Canadians alike".

According to Fast, over eight million US jobs depend on trade with Canada, while two million Canadian jobs are reliant on trade with the US. Some CAD1.8bn (USD1.78bn) in goods and services cross the border every day, with over 4,500 Canadian-owned businesses in 17,000 US locations directly employing over half a million Americans. The Minister said: “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 benefits. 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-US relationship, which is the envy of the world, gets even stronger as we go forward together in these challenging times.”

In spite of such sentiments, Fast also issued a statement on the proposed “Buy American” provisions in the American Jobs Act alongside the government's publication of the details of his trip to Washington. He said that the manner in which the US administration has attempted to justify the "Buy American" provisions is a cause for concern.

In particular, comments made by US Ambassador David Jacobson in a recent Ottawa speech, have raised the issue of how the bill will affect Canadians. Fast said of the speech:“History has shown that in times of severe economic challenge, the global economy is revived by lowering trade barriers, and that raising them will have the opposite effect. The Obama administration has in the past recognized that deepened trade is win-win for both our countries. In particular, Canada was deliberately provided an exemption in 2010 to the ‘Buy American’ provisions that were proposed at that time. Trade-restrictive measures between our two countries were recognized as wrong then, and they remain wrong now."

He added: “With over eight million Americans depending on trade with Canada and over two million Canadian jobs depending on trade with the United States, trade-restrictive policies hurt us both. In these challenging times, there is simply no better American job creator than trade with Canada, and vice versa. And the best way to do that is through free and open trade. Our government is committed to continuing to stand up for Canadian interests by ensuring taxes are low and trade is open and free, because we know that low taxes and more trade is the best way to create and protect jobs, and grow our economy. Our efforts in this regard will continue.”

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