Who Saved Canadian Steel?
International Trade Minister Stockwell Day is claiming credit for an amendment to the US stimulus bill affirming that its Buy America provisions will be “applied in a manner consistent with US obligations under international agreements.” Canada tops the list of countries to which the US has such obligations.
However, Day and his colleagues demanded the complete removal of Buy America provisions. John McCain proposed such an amendment but the Senate voted it down by a two-to-one margin. The Harper governmentâ€™s megaphone diplomacy did not work.
Fortunately, Canadian Press reported what really happened in Washington:
. . . the United Steelworkers pleaded Canadaâ€™s case to lawmakers from steel-producing states.
A written submission to the congressional steel committee from the Steelworkersâ€™ president, Canadian Leo Gerard, asked that legislators exempt Canada from the provision.
“Because we are an international union, and because Canadian and U.S. manufacturing is so integrated, we encourage you and other members of the steel caucus to approach your counterparts in Canada to discuss a co-ordinated approach,” Gerardâ€™s submission read.
Such an approach would allow “the North American industry to strengthen its ability to create and preserve these good jobs in both countries,” he said.
Of course, the nature and scope of Buy America provisions is moot unless and until the stimulus bill passes.
The Economist doesn’t seem to think anything has necessarily been “saved” just yet, given that their latest leader came out AFTER the Senate added these “softening” provisions (see http://www.economist.com/opinion/displayStory.cfm?story_id=13061443).
Erin, I thought you said local content requirements were excluded from NAFTA. What is the legislation that the “buy american” provision would violate?
Good point, Stuart. To the extent that preferential procurement is permitted by international agreements, the commitment to â€œUS obligations under international agreementsâ€ may not mean anything. However, actual practice has been to grant waivers from Buy American and Buy America. The Senate amendment seems designed to reassure countries like Canada that, at a minimum, such waivers will continue.
I agree that Canada has not been â€œsavedâ€, because the threat was not great in the first place. My title was intended to poke fun at Minister Dayâ€™s triumphalism. The lead editorial in todayâ€™s Toronto Star makes many of these points.
That Economist editorial promises a â€œstridentâ€ response to preferential procurement and certainly delivers: â€œBarack Obama says that he doesnâ€™t like â€œBuy Americanâ€ (and the provisions have been softened in the Senateâ€™s version of the stimulus plan). Thatâ€™s good – but not enough. Mr Obama should veto the entire package unless they are removed.â€
Veto the entire US stimulus package? Iâ€™m glad that these guys are writing editorials and not running the White House.
A nitpicky point: The Economist and Toronto Star are incorrectly referring to Buy American instead of Buy America. The 1933 Buy American Act favours US products for federal spending. The 1982 Buy America Act extends this preference to state and local spending of federal grants on transport infrastructure. The current stimulus bill proposes to extend Buy America to other types of state and local infrastructure.
I admit to initially making the same mistake myself, but still expect better of such leading publications a week after this story broke.