Buy American: Canadians to become “American”?

Late breaking news from DC,

The Senate will vote on this surprisingly contentious issue tonight, after a day of vocal lobbying from corporations and other countries. Sens. Byron Dorgan and Max Baucus have an amendment to make the “Buy American” provisions consistent with international trade obligations. That’s in line with what the White House has requested. It’s not clear what the language will require; either companies would be required to use American-made steel, iron and other commodities in projects, or they won’t.

Trying to salvage the Buy American provisions late today, the Steelworkers Union urged lawmakers to include Canada in its definition of “American.”) Some Democrats have threatened to withhold support from the legislation if it doesn’t include Buy American provisions. The Senate and House versions of “Buy American” will have to be reconciled in a conference committee.

I’m not sure about how I feel about US law defining “American” as inclusive of Canada (what other legal implications might this have one wonders). However, if this goes through, this may save Jack Layton’s base (unionized steel) and infuriate his protectionist sensibilities too. Layton has been pushing a “Buy Canadian” policy, effectively reacting to protectionism with protectionism. A change in the provisions to label it a “Buy North American” policy would still be protectionist (though broader to include Canada) and one wonders what sort of concessions would be asked of our country in participating in such an arrangement. What would this mean for labour and/or commerce mobility within Canada and the US, and outside of both countries on steel manufacturing and related industries?

Canadian labour and therefore the cost of our steel is relatively expensive compared to Mexican steel. Dems are considering the competitive quotient between Canada and Mexico and are likely finding that Canada is a safe concession for their constituents.

Senator John McCain, who Canadians passed over for Obama, introduced legislation earlier today to completely strip the “Buy American” provision out of the Obama stimulus bill. Stephen Harper, Gilles Duceppe, Bob Rae and Michael Ignatieff have hoped that the US Congress will remove the protectionist element from the stimulus package.

Comments

comments

  • Cool Blue

    Most US politicians already concede that they're not referring to Canada when they speak of “foreign oil” so this is seems like somewhat of a natural progression.

  • DavidK

    Buy North American – Maybe?

  • http://www.stephentaylor.ca Stephen Taylor

    Likely

  • Bec

    Canadians were not paying attention, they were to busy being shot by the, love arrow.
    This was obvious and out there. Our Canadian media even ignored it. Whoops, that was a given.

    I certainly hope this is renegotiated but if the fawning Canadian public, give Obama the high five for solving it, then they really are drinking, the koolaid.
    Many smart people internationally are working on this and Obama simply says, yea or nay.

  • DavidK

    I could live with that. But the EU would still have something to say. It's probably better for international relations, reactions, and retaliations that the entire idea is scrapped.

  • http://vollman.blogspot.com Robert V

    Hush! Obama is perfect in every way! Haven't you been listening to the news???

  • ken

    I expect that this Senate “buy American” push is mostly window-dressing for their constituents. It seems clear that they aren't really going to break with NAFTA (at least no more than they already have ( **cough** where's our $4b rebate on softwood duties?**cough**)).

    And most important, the Americans aren't going to hold religiously to a “buy American” policy if it entails a heavy price penalty.

  • MikeW

    I shudder every time protectionism comes up. Have these people not read Smith, Ricardo, or Hayak? Surely, the lessons of Smoot- Hawley in the 30's U.S. must register. In the meantime , before Canadians get too smug, we should clean our house. The last Fed budget, requires ships for the military, to be built in Can. (regardless of price) not only that but also in regions near where they will be used. (Read Nova Scotia, Quebec, and B.C.) Last lets not forget the great boondoggles of farm marketing boards which make our dairy, poultry, and eggs 2 to 3 times more expensive, and have effectively kept Can. from a leadership position on DOHA round, WTO.

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