Canadian manufacturers once again run the risk of being hit by US protectionism and the need to fight for crucial exemptions.
The challenge comes after the Biden administration announced new procurement guidelines on Monday that require building materials purchased for federally funded infrastructure projects to be produced in the United States.
Dennis Darby, head of Canadian Manufacturers & Exporters, says Canada will have to work hard to secure exclusions and waivers to protect access to the US market, as it has done in previous challenges.
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Key to these efforts will be to emphasize the integrated nature of economies, where materials already flow freely across the border, and how Canada is rarely able to undercut U.S. prices.
“Canada and the United States do not compete in manufacturing; we actually do things together. And that’s a truism, it’s not even a cliché,” Darby said in a phone interview.
Across the continent, some grades of steel are made almost exclusively in Canada while others are produced in the United States, he noted.
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“We’d love to say, ‘Buy North American.'”
The U.S. provisions are likely intended to target countries like China, where there are concerns about subsidized production and dumping of products for export at problematically low prices, Darby added.
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The Buy American rules, part of the US $1 trillion infrastructure package that was signed into law last November, allow for several scenarios in which the requirements could be waived, including if they are inconsistent with the public interest or if the materials are not produced. in sufficient quantities or of satisfactory quality on the internal market.
Federal agencies will be responsible for approving any waivers, which the White House says should target specific products and projects “where possible,” rather than entire sectors or product types.
In response to the Buy American push, Global Affairs Canada and the federal Department of Finance are in full consultation on reciprocal procurement policies. The two departments said last month that new US requirements “are expected to negatively impact Canadian suppliers’ access” to US markets.
The federal hearings follow a commitment in last year’s Liberal budget to “ensure that goods and services are only purchased from countries that provide Canadian businesses with a similar level of access to their supply markets”.
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