Here is what the U.S. Congress passed in the stimulus bill Thursday that has folks on our side of the border a little nervous:
SEC. 1605. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS. [PDF – see page 489]
(a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
(b) Subsection (a) shall not apply in any case or any category of cases in which the head of the Federal department or agency involved finds that
(1) applying subsection (a) would be inconsistent with the public interest;
(2) iron, steel, and the relevant manufactured goods are not produced in the United States if sufficient and reasonably available quantities and of a satisfactory quality; or
(3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent.
(c) If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b) the head of the department or agency shall publish in the Federal Register a detailed written jurisdiction as to why the provision is being waived.
(d) This section shall be applied in a manner consistent with United States obligations under international agreements.
[The Joint Explanatory Statement indicates:]
Section 1605 provides for the use of American iron, steel, and manufactured goods, except in certain instances. Section 1605 (d) is not intended to repeal by implication the President's authority under Title III of the Trade Agreements Act of 1979. The conferees anticipate that the Administration will rely on the authority under 19 U.S.C. 2511 (b) to the extent necessary to comply with U.S. obligations under the WTO Agreement on Government Procurement and under US free trade agreements and so that section 1605 will not apply to least developed countries to the same extent that it does not apply to the parties to those international agreements. The conferees also note that waiver authority under section 2511 (b) (2) has not been used.
Canada's Minister of International Trade, Stockwell Day, was asked about this yesterday. Here's what he told reporters in a scrum in the House of Commons foyer Thursday after Question Period:
Reporter: Wouldn't it have been better if they had taken the Buy American provisions right out of this bill?
Hon. Stockwell Day:Well, we're waiting for now — there is agreement on the bill from what we understand and they now go over it line by line – there's hundreds of pages – and then it goes to the President. We are understanding that President Obama's request that there be words in there to the effect that this should not in any way impede their international agreements – which is what we specifically asked for – we understand it's going to be in the bill that goes to the President and that's what we're waiting for. But it does underline the fact that we have to continue to push back against protectionism. This is why we're so aggressive on pursuing our free trade agreements. As you know, we've got one in the House right now with countries in Europe. We have others that we've signed, one from Peru that's coming to the House, one from Colombia. We've got one from Jordan. We're pursuing broader free trade economic agreements with India. We're being very aggressive to make sure that Canadian exporters have expanded credit through the Export Development Corporation. On every front we are demonstrating the importance of moving away from protectionism and going for broader, freer and more open free trade agreements with other countries.
Reporter:The Buy American provisions are still in the stimulus bill. There's still protectionism that can be used against China, India, countries that (inaudible) under the WTO Procurement Agreement. So are you saying that it's okay that Canada is not affected — to have a protectionist bill that doesn't affect Canada?
Day:I've said all along we stand up for Canadian interests first obviously. In doing that, we also speak to the broader interests of freedom of trade and staying away from protectionist trade walls. If other countries are hit with protectionist trade barriers, then that affects all economies. We need to be able — as Canadians, we need to allow Canadians to sell their products and their services as freely as possible around the world so as much as we are standing up for Canada but we also ask the United States to think of the broader global implications of protectionism and that's why we're asking them to stay away from it.
Reporter:How concerned are you, sir, about this language in the stimulus bill about protectionism? On one hand you're hearing from President Obama let's not violate any trade agreements. Do you have — what's your level of concern about that that there will be problems with protectionism with the relationship between the United States and Canada?
Day:If the bill in its final form which is presented to the President, if it has the language that says clearly from the President's point of view that nothing in that agreement should in any way violate their international agreements with us or with anyone else, then that will be some comfort to us.