Canada chems worried about US 'buy America’ law

05 June 2009 20:08  [Source: ICIS news]

TORONTO (ICIS news)--Canada’s chemical producers are concerned about the impact of  “buy American" provisions in the US economic stimulus law on Canada's manufacturing sector, a spokesman for the country’s chemical producers association said on Friday.

Michael Bourque, spokesman for Ottawa-based Canadian Chemical Producers Association (CCPA), said his group had joined other manufacturers’ in writing a letter to Canadian provincial premiers, urging them to take appropriate action.

The letter, spearheaded by Canadian Manufacturers and Exporter Association (CME), warned that a wide range of Canadian-based manufacturers were being hurt by the US American Recovery and Reinvestment Act, which became law in February.

Provisions in the law require all manufactured goods, and steel and iron, that were procured for US public works funded under the act, to be made in the US, CME said.

The measure effectively banned all Canadian-made products from all US state and municipal infrastructure projects that used even a single dollar of government funds authorised under the law, it said.

The association warned of a growing backlash within Canada.

For example, Canadian municipalities were already considering a move to exclude supplies from the US and other countries, unless those countries provided reciprocal access to Canadian exporters, CME said.

The association urged the Canadian government to propose solutions to President Barack Obama's administration  to avoid a further escalation.

One option would be for the US to issue waivers.

Also, both countries could work to ensure that federal procurement standards under NAFTA (the North American Free Trade Act) were applied to federal funds spent by sub-national authorise such as states, provinces and municipalities.

However, the best solution was for Canada to seek a more open procurement agreement with the US, CME said.

In a separate appeal to Canadian Prime Minister Stephen Harper, CME said that Obama should be encouraged to issue an executive order stating that the “Buy America” provisions would not apply to the state and local level.

In a statement on its website, CME warned that since the passage of the Recovery Act, similar “Buy America” provisions were appearing in other US legislation.

The chemical industry is Canada’s third largest exporter of manufactured goods and the US is its most important export market by far.

($1 = €0.71)

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By: Stefan Baumgarten
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