15 October 2009

Efforts to stop Buy American moving slowly

The following is excerpted from the 13 October 2009 edition of "The Star".

Canada's efforts to have Canadian firms exempted from protectionist Buy American measures in the United States are moving slowly as organized labour and other stateside opponents argue against a waiver for America's biggest trading partner.

Unlike the Canadian government, labour leaders in Canada say, officials at the United States Trade Representative's office have reportedly been consulting with and listening to union representives opposed to an exemption they say could weaken efforts to create U.S. jobs and stimulate the American economy....

"The sad reality is, in Canada, we don't have the government of the day consulting with the labour movement ... the Harper government's not given us the time of day. In the U.S., there's greater dialogue with the labour movement on how to create jobs and get the economy moving." [Ken Neumann, the Canadian director of the United Steelworkers]

Neumann's union – an international one – says it supports American efforts to protect jobs and stimulate the economy, but says the focus should be on North American jobs due to the deep integration of the U.S. and Canadian economies.

Both Neumann and Leo Gerard, the Canadian president of the United Steelworkers, have advocated a bilateral approach to stimulating the North American economy.

The American Federation of Labor and Congress of Industrial Organizations, known as AFL-CIO, has not only been a vocal and well-organized proponent of the Buy American provisions, but is also reportedly against a Canadian exemption from the measures contained within President Barack Obama's US$787 billion economic stimulus package.

Over the past few weeks, the AFL-CIO has pointed out to Trade Representative Ron Kirk and others examining Buy American that the legislation has created an estimated 1.2 million jobs in the U.S.

The White House says more than $150 billion in stimulus money has been pumped into the economy so far, and stimulus dollars are being spent faster than originally expected.

American and Canadian negotiators Everett Eissenstat and Don Stephenson held their first talks two weeks ago aimed at examining Canadian concerns about Buy American. Canada is proposing Canadian firms get an exemption that would allow them to compete for infrastructure projects funded by the stimulus package.

In return, American firms would get guaranteed access to Canadian provincial procurement markets, with some exceptions, for as long as the stimulus package is in effect. But according to a report on Inside U.S. Trade, a widely read trade newsletter, some opponents don't consider that enough of an incentive to justify granting the waiver.

Those opponents include some leading U.S. business leaders, the report said. The White House is also reportedly hesitant to grant an exemption to an entire country, fearing it will anger pro-Buy American forces in Congress.

The currently soaring Canadian dollar might also serve to diminish Canada's argument about the damage being done to its exporters and manufacturers by Buy American.

"A higher exchange rate makes Canadian products less competitive in the American market," said Erin Weir, an economist for the Canadian arm of the United Steelworkers.

That said, it's also possible to argue that since the high dollar hurts both economies, the argument for getting rid of Buy American becomes that much more compelling, Weir added.

"The high dollar is also making it that much harder to sell to the U.S., so in a way it has some of the same effects of the Buy American policies," Weir said.

"You could argue if we have to deal with this high dol