'Buy American' Horror Stories in Canada

The Canadian daily National Post had a good piece out Friday that highlights how the ‘Buy American’ provision is being seen in Canada. Many see it as an affront that America could and would favor domestic firms over those of its largest trading partner and next-door neighbor despite the North American Free Trade Agreement.

For the second time in six months, pipe fittings in California are being ripped from the ground because they were stamped "Made in Canada," a move manufacturing companies say hurts both sides of the border.

Cambridge Brass Inc., a Canadian brass fittings manufacturer, discovered Thursday that it stands to lose more than $1.5- million in this most recent fallout from the Buy American protectionist measure.

Greg Bell, vice-president of sales and marketing for the Cambridge, Ont., company, received a call Thursday from the City of Sacramento, where the parts were being fitted into the public water system. He was told his product was no longer acceptable because it was not made in the United States.

America seems clueless at how protectionist policies build rage that politicians abroad must quell or heed through retaliation. It’s as if only American politicians want to protect jobs.

It bears repeating because some people don’t get it: it’s not the act of protectionism itself which is so damaging, it is the retaliation and escalation that results.

"The government has got to stand up and propose some serious retaliation," said John Hayward, president of Hayward Gordon Ltd., noting the Halton Hills, Ont.-based industrial-pump manufacturing company has been barred from bidding on U.S. products. He said he has had to switch manufacturing from three Canadian plants to U.S. sites in order to stay in business, a survival decision that has resulted in local layoffs.

Read the full account below.

Source

‘Buy American horror stories’ building – National Post

Comments

[Michael Clark:]

Welcome to the New World. The Old World is gone. Globalism is a Day-Cycle phenomenon. In the Night-Cycle it is every man for himself (every nation for itself) and God against all.

Nov 08 03:33 AM

[enigmaman:]

Many of the bad policies, procedures we are seeing employed today were employed with horrendous results during the GD, its as if Obama is channeling FDR, so there is nothing new about the politics that is happening today. One good example Universal health care, its been on the progressive agenda since the beginning of the 20th century!

Nov 08 07:26 AM

[Valley Boy:]

The "Buy American" provisions should be reworked in order to include Canadian products on the same preference as American products. There is no reason to exclude Canadian products.

Nov 08 12:12 PM

[Old Trader:]

A number of months ago, I saw, (and commented and blogged on) the same thing that happened in a town in Texas...they had a "shovel-ready" water project to implement, but the valves needed are/were ONLY available from a Canadian mfg. (not sure if its the same one as mentioned in this article, as the name wasn't given, but how many Canadian valve mfg. cos. can there be?).

Nov 08 12:19 PM

[derryl:]

Cdn and US manufacturers depend on each other for essential inputs to their production processes. After the FTA was signed by Reagan and Mulroney the 2 countries' productive economies have been joined at the hip. Buy American and Buy Cdn hurts businesses on both sides of the border. How can you operate if the parts you need are only made by a company on 'the other side', and your government won't allow you to buy them anymore?

Nov 08 06:18 PM

[somecatchyp...:]

When your best customer is hopelessly broke, it’s time to find new customers.

Canada needs to diversify her trade relationships ASAP. There have been some encouraging moves in this direction. Prime Minister Stephen Harper is scheduled to be China in early December. Harper will also be visiting India in mid November.

This "Buy American" story is a great example of why trade diversification is so important to the Canadian economy.

Longer term, this is a good news story. It’s a wake up call for Canada that overdependence on the US must end ASAP. It’s also a wake up call for the US. Even your friends are starting to walk away.

www.theglobeandmail.co.../

Nov 08 08:35 PM

[Value Added:]

I don't understand the dismay. There are no limitations on buying Canadian parts or products, if project funds are not part of the stimulus package. This is not protectionism; it is a one-shot attempt to stimulate the US economy, not those of everyone else (although, they will also benefit indirectly through any US recovery). I have not been a supporter or TARP or other stimulus measures, but I see no problems with stipulations on the expenditures of US taxpayer dollars, such that US producers should be favored over others when equivalent products are available domestically. No problem, that is, except envy on the part of the Canadians. Don't our neighbors have their own pork-barrel projects?

Nov 09 08:36 AM

[ebworthen:]

Two choices:

1. Annex Canada and build an impenetrable wall between U.S. and Mexico.

2. Forbid Canadian products, goods, and services and whore ourselves out to Mexico more than we already have.

I like option one better, the Canadians already have free health care.

Nov 09 11:44 PM

[bob adamson:]

Edward Harrison gives us another good article.

Value Added doesn’t get the point; US manufacturers and suppliers will think twice before including Canadian products in their production or stock because of the problems this might cause down the line if at some later stage their stuff is to be used in a US Federally funded project to which ‘Buy American’ applies. Canada has avoided ‘Buy Canadian’ provisions in its stimulus measures. There is much support among Canada’s Provinces and local governments to retaliate against these US measures if the two national governments can not resolve this issue satisfactorily.

We are being humourous are we ebworthen?

To the good comments of somecatchyphrase might be added that Canada is actively seeking a broad reaching trade agreement with the EU.

Darryl is as always on point with valid observations.

While the ‘Buy American’ provisions in question are probably, as a matter of strict legal interpretation, not contrary to the obligations of the US under NAFTA or other international trade agreements, they are offensive to Canada and unwarranted as they are being applied to Canada. As a Canadian I welcome the added impedes they give Canada to diversify its trading links; seeking Asian markets for oil and natural gas production for example.

Nov 10 12:24 PM

[bob adamson:]

Two news reports on this issue today below:

www.financialpost.com/...

www.financialpost.com/...

Nov 17 06:12 PM