The Problem The solution The resolution Bad for USA also How to Help who Supports Fair Trade In the Media

To All Supporters of Fair Trade:

We want to bring to your attention a very important issue that threatens manufacturing, employment, and investment in your communities.

Federal legislation in the United States is now imposing “Buy America” restrictions on state and local procurement projects funded by Washington.

The American Recovery and Reinvestment Act which became law in February requires all iron, steel, and manufactured goods procured in public works funded under the Act to be made in the United States. We are now seeing similar restrictions appear in other bills before the U.S. Congress. One such bill, the Water Quality Investment Act of 2009, threatens to close off access for Canadian suppliers to the U.S. water and wastewater treatment sector. Other spending bills being drafted with Buy America provisions cover areas like school construction, health care, transportation, and steel.

The procurement restrictions now being imposed by U.S. federal legislation are far more punitive than the Buy America provisions previously in effect at state and local levels. The new requirements effectively ban Canadian-made products from all municipal infrastructure projects that use even a single dollar of federal funds authorized under the laws in question. Many industries, like the water treatment sector, have until now been able to bid on U.S. infrastructure projects without hindrance – enjoying the same unfettered access that U.S. companies have in Canada.

The U.S. Government says it will comply with its international trade obligations, but there is no safeguard for Canadian companies under the NAFTA or the WTO when it comes to state and local procurement. As a result, Canadian manufacturers are losing contracts – and your communities are losing businesses, jobs, and investment – while American suppliers still enjoy free access to municipal infrastructure contracts in Canada.

President Obama continues to implore recession-weary nations not to build walls around their economies. But, that is exactly what the “Buy America” provisions are doing. Canada is the biggest export market for the US and we support millions of American jobs. Damage will be done on both sides of the border if protectionist Buy America restrictions continue to be enacted.

We are in favour of free and fair trade. No one wins from restricting market access. Businesses create jobs when they grow, not when their opportunities are limited. Municipalities – on both sides of the border – can obtain the very best deal on infrastructure projects for their local ratepayers when their procurement options are determined locally, not by the federal government.

But, fair is fair. We need to send a strong message that rights to market access are reciprocal – that Canada’s municipalities will buy from companies as long as their national governments keep markets open for Canadian exporters. That is the only message that will help the Government of Canada and US municipalities and manufacturers negotiate a solution to the Buy America problem.

We urge you to support the “Fair Trade” resolution and help our Government negotiate our way back to reciprocal market opportunities on both sides of the border.

CME Buy America Briefing Document English / French