The U.S. administration has released the details of its Buy American policy. It is proposing that goods bought by the U.S. federal government must contain 75 percent U.S. made content by 2029, up from 55 percent today.
Canadian Manufacturers & Exporters (CME) has expressed concern that this move will hurt Canadian manufacturers that sell to the US Federal Government directly, along with manufacturers that are part of those procurement supply chains.
It wants a clear-cut exemption, like the one obtained from President Obama in 2008-2009 as protections from its stimulus package.
“Even though administration officials say that Canada is not the target, and that WTO rules will exempt many Canadian manufacturers, past experiences with Buy American show clearly that Canadian companies always get caught up in such policies,” said Dennis Darby, president and CEO of CME.
“The Buy American chill is real, and without clear-cut exemptions from U.S. officials, that chill on working with Canadian companies will set in again”
Darby suggested that if there is a perceived risk that dealing with a Canadian supplier will jeopardize a government contract, or that there’s too much paperwork required to clear a supplier, Canadian manufacturers at a disadvantage, “even if they are competitive on price, service and quality”.
Of particular concern to manufacturers will be how many Buy American/America provisions will be included in the massive infrastructure bill currently being negotiated in the US Congress.
“Canada does not enjoy WTO protection from state and local level procurement rules. The devil is in the details, and when we are talking about trillions of dollars in infrastructure projects, Canadian manufactures can lose out unfairly,” warns Darby.
The manufacturing sector represents more than 10 percent of Canada’s gross domestic product, with sales of over $685 billion in 2019.