Buy American deal close but political issues slowing things down
Published Friday, December 4, 2009 5:38PM EST
WASHINGTON - A deal on the Buy American trade dispute is still a long way off, those close to the negotiations said Friday, but progress is being made on new rules regarding the implementation of the protectionist provisions that could ultimately benefit Canada.
"The administration isn't even close to an agreement with Canadian officials in terms of what Canada wants," said a source familiar with the ongoing negotiations between Canadian and U.S. trade officials.
Canada's hope for an exemption from Buy American is "a valid proposal, and there are some pretty decent sacrifices that Canadian municipalities are willing to accept, but there's no appetite in the administration to go down that path," he added.
Ottawa has complained that Canadian exporters are being excluded from bidding on projects under the $787-billion U.S. stimulus package because of Buy American, which prevents foreign-made components from being used on infrastructure projects.
The dispute has been a major irritant between the U.S. and Canada since February, when President Barack Obama's recovery bill was passed by Congress and contained rules that allow American states and cities to bar the use of foreign-made steel, iron or other manufactured goods in projects funded out of the stimulus program.
Hundreds of Canadian companies have been hurt by Buy American, according to the Ottawa-based industry association Canadian Manufacturers and Exporters.
Prime Minister Stephen Harper has brought up the subject repeatedly with Obama, something that the president has noted with some good-natured chagrin, and newly minted ambassador Gary Doer even mentioned it to the commander-in-chief during his largely ceremonial visit to the White House to receive his credentials last month.
But with some estimating that almost 60 per cent of the stimulus money is already committed, another D.C. lobbyist argued that any deal reached now would be merely symbolic. For the most part, the source said, Canada's ship has sailed on the Buy American front.
Chris Braddock, a procurement specialist at the U.S. Chamber of Commerce, disagreed that too much time has passed for Canada to reap any serious benefits from the stimulus dollars.
"As of right now, it's not too late," Braddock said. "A lot of the money hasn't even been spent yet, and there's a lot still to be awarded."
Ground is also being broken, Braddock said, on guidelines on the implementation of Buy American from the U.S. Office of Management and Budget, known as the OMB. Revised guidelines are expected in the coming weeks, and they will finalize the requirements for states and municipalities under the Buy American provisions after numerous stakeholders asked for more clarity about the rules.
Those close to the budget office said the new guidelines could be ready some time this month.
The U.S. Chamber of Commerce and other American lobby groups have been pushing the OMB to give government agencies, states and cities greater freedom regarding where they buy products for infrastructure products.
But in terms of an exemption for Canada, all agree that the White House believes there would be too high a political price to pay in Congress in making such a deal with Canada.
In addition to many U.S. lawmakers, powerful American labour unions have also been dead set against granting Canada's wish for an exemption.
"Canada will never be exempted, the law is written -- the only thing you can get is a clarification that you're not being discriminated against," said Chris Sands, a Canada-U.S. relations expert at the Hudson Institute in Washington.
"Privileging you is not going to happen, a change in the legislation isn't going to happen because it's too late -- the only thing you can hope is that the administration clarifies the way the money is spent."
Sands also had stern words for Canadian officials, saying they "have done themselves a great deal of damage" with the Obama administration for the way they've handled the Buy American dispute.
"Canadians put themselves in these positions where they just come across as such a bunch of whiners, feeling entitled to something they don't have any entitlement to," Sands said.
He likened it to the Canadian hue and cry about the Western Hemisphere Travel Initiative, when officials north of the border wanted Canada to be exempt from provisions requiring travellers to carry passports when entering the United States.
"You were obsessed that you'd be exempted from the passport requirement when that was never an option, and you go on about it for so long that it just convinces Americans that you aren't serious about security; this just convinces Americans that you aren't serious about the American economy being revived, you're just looking to cash in as much as possible," he said.
"It sounds like you're just in it for yourselves, especially when you have such good unemployment numbers and you're coming out of the recession a bit better than we are."