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Why Disrupting Canada-U.S. Trade with “Buy America” legislation is also bad for the US

Canada is the largest export market in the world for American goods – larger than all 27 EU countries combined. The U.S. and Canada have the world’s largest trade relationship – over $560 billion dollars per year. Millions of American jobs are supported by trade between Canada and the United States. Trade barriers, such as Buy America legislation and potential retaliation by trading partners such as Canada, will disrupt this relationship and put far more American jobs at risk than may be created through Buy America practices.

Canada and the U.S. have a highly integrated trade relationship. Billions of dollars worth of American-made goods are integrated into Canadian-made products that are either sent back into the U.S. or exported to other markets around the world. Damaging these Canadian companies is also bad for U.S. suppliers.

Canada is not a low-wage country that “steals” American jobs with cheap labour. We provide innovation and competition to the North American marketplace. The high quality technologies and products provided by Canadian companies are valued in the North American marketplace. Restriction of these products stifles competitive innovation and pricing which, in turn, is detrimental to the efficient use of taxpayers’ dollars on public infrastructure projects.

Scholars at the Peterson Institute for International Economics have calculated that the Buy America provision will create about 1,000 new jobs in the steel industry and potentially a few thousand more in other industries. But gaining a few thousand jobs has to be weighed against running the risk of other countries shutting out U.S. manufactured goods. The U.S. stands to lose 6,500 jobs for every percentage of exports decreased.

Canada and the U.S. are valuable partners in many other areas besides trade. It is not in the best interest of either country to damage such an important relationship. During these difficult times, we should be pulling together not pulling apart.

The Peril of 'Buy American' New York Times June 3 09

US Chamber of Commerce Letter to the President Obama May 22 09

US Companies Hit By Repercussions of Buy American Financial Times May 26 09

WWEMA letter - Buy America Bad For U.S. Feb 06 09

Buy America U.S. Business Concerns Jan 22 09

Interview with U.S. Chamber of Commerce VP John Murphy AM640 Toronto Radio mp3 3.4mb - May 27 09