At the National Post, John Ivison vents over frustrations with the Canada-U.S. economic relationship from a Canadian perspective—and opens the door to trade retaliation. His concerns: border-thickening, the continued presence of ‘Buy American’ provisions, and Keystone.
But, buried near the end, is an important caveat: “[t]he Beyond the Border initiative may yet bear fruit,” Ivison writes.
This suggests continued progress on the Beyond the Border (BtB) Action Plan and Regulatory Cooperation Council (RCC) is critical not only to deepening Canada-U.S. economic ties, but maintaining the current–and immensely valuable–Canada-U.S. bilateral relationship.
From Ivison’s National Post commentary article Harper Government Open to Mini-Trade War to Battle U.S. Protectionism:
How about launching a mini-trade war? Or at the very least escalating a simmering trade dispute by barring American companies from bidding on the $53-billion in new infrastructure projects about to come on stream?
This is a very real possibility, sources suggest. Frustration has been bubbling among Canadian manufacturers for years over protectionism that excludes them from access to the American public sector procurement market, unless they have U.S. factories.
During the recession, the U.S. imposed “Buy American” requirements on its stimulus funding. An existing “Buy America” provision applied to the Department of Transportation for transit, highway and airport projects. Both provisions required spending to be directed toward domestic U.S. companies, or those with manufacturing facilities south of the border.
Canada got temporary relief from Buy American restrictions in an agreement reached with President Obama, but that deal ran out at the end of September and new bilateral talks have yet to take place.
To make matters worse, since the stimulus money ran out, Congress has become even more protectionist, applying Buy American provisions to more and more funding appropriation bills and infrastructure programs.
Mr. Harper has muddled along unenthusiastically in his relations with the U.S., particularly since Mr. Obama became president. The Beyond the Border initiative may yet bear fruit but by any objective measure, the relationship is at a low ebb.
U.S.-Canada bilateral trade has slipped below the level of the 1990s; the border has thickened; there have been no efforts to broaden or deepen NAFTA; the powerful U.S. environmental lobby considers the oil sands ground zero in their war on carbon; Congress is openly protectionist and Canada is being locked out of key markets.