Under the Biden administration’s version of “Buy America,” Canada is not likely to get any special exemptions for U.S. government procurement contracts, according to an expert on international trade.
“Canada is on track to be treated like every other foreign country that happens to be a member of the WTO [World Trade Organization] Government Procurement Agreement,” Eric Miller, president of the Rideau Potomac Strategy Group, told The Epoch Times.
“That will inevitably mean that there will be lower exports from Canadian firms in the infrastructure space in Canada both on the goods and services side to the United States,” added Miller, who advises businesses and governments on trade, legislation, and regulatory issues.
The carrot dangling for Canadian firms is a potential US$2 trillion package to be spent over the next 10 years in the context of U.S. President Joe Biden’s American Jobs Plan to rebuild infrastructure.
Emphasizing Common Ground
Canadian parliamentarians and the business sector are working to blunt potential impacts from Biden’s Jan. 25 executive order on Buy America and Buy American policies.
Buy America and Buy American are two different legislations that have been around for decades. The former, a provision of a 1982 act, focuses on U.S. federal transportation infrastructure procurement, while the latter, enacted in 1933, applies to all U.S. federal government agency purchases of goods.
On June 16, the House of Commons Special Committee on the Economic Relationship Between Canada and the United States released an interim report on “Buy America” procurement policies, which summarizes witnesses’ testimony about Buy America and similar policies. The report makes six recommendations to the government on dealing with the Biden administration’s stance.
The first recommendation is to continue to engage with the United States to try to get a full exemption for Canada from current and any future Buy America policies. The other recommendations focus on strategies to pursue should a full exemption not be possible. These include seeking exemptions for integrated supply chains, specific Canadian sectors, products and sectors where the two countries have immediate shared priorities, and goods having low-carbon emissions.
Miller says one strategy is for Canada to present itself as being very much like the United States and, for example, make the case about cross-border labour unions, since Canada is the only country with which the United States shares labour unions.
“How do you leverage Biden’s love for labour unions with that cross-border connection?” Miller asks.
The Biden administration is deeply concerned about China and has only so much time to spend on Canada, Miller said.
“The way that things have tended to work so far is they’re happy to work with Canada on stuff they [the United States] want to work on,” he added.
The parliamentary committee said that Buy American requirements don’t apply to Canada for U.S. federal government purchases covered by the WTO’s revised Agreement on Government Procurement (GPA). The revised GPA, which entered into force in April 2014, requires the United States to treat foreign suppliers no less favourably than its domestic suppliers. Canada, the United States, and 46 other countries are parties to the agreement.
