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Clement criticizes Water Quality Investment Act ‘buy American’ provision

The Canwest News Service reports this morning that, “the Water Quality Investment Act, which will provide US$13.4-billion for local governments in the U.S. to improve their drinking-water systems (has) been approved by the House (of Representatives) with Buy American rules and is awaiting Senate passage.” 
Industry Minister Tony Clement is in Washington for the next two days meeting with Representative Bernice Johnson, chair of the House of Representatives transportation subcommittee on water, Commerce Secretary Gary Locke, and Bart Gordon, chairman of the House science and technology committee to raise concerns about the Act.

The article continues, “the fallout from Buy American is already being felt among Canadian firms – from sewage pipe manufacturers to water treatment companies – that are being shut out of valuable infrastructure contracts being awarded to local and state governments receiving stimulus funds.”

“Banning Canadian companies from the U.S. waste-water industry could cause $3.7-billion in lost business, Mr. Clement said. But in their rush to stimulate the U.S. economy, protectionists in Congress have overlooked potential dangers to American businesses. More than US$6-billion in U.S. exports to Canada in the waste-water industry could disappear if Canadian jurisdictions retaliate with trade rules barring American firms, he said.”

“Already, the city of Halton Hills, Ont. – in response to complaints about Buy American from a local waste water equipment manufacturer – has responded by banning the purchase of all goods from any country that bars Canadian products. Other Canadian municipalities are considering similar measures.”

“President Barack Obama succeeded, after pressure from Canada and other U.S. trading partners, in persuading Congress to insert language into the stimulus legislation requiring that Buy American provisions respect America’s international trade obligations under NAFTA and the World Trade Organization’s government-procurement agreement. Since those trade deals don’t extend to state and local governments in the U.S., the Buy American rules are being broadly interpreted to disqualify foreign bidders.”

“In addition, the U.S. has approved rules excluding Canada from the list of nations from which some state and local governments can buy materials using stimulus-legislation money.”

The Globe and Mail adds that, “Unlike many European countries, Canada insisted on excluding provinces and local governments from its deal with the World Trade Organization on government procurent, said Barry Solarz, the American Iron and Steel Institute’s senior vice-president of trade and economic policy.”

The Globe and Mail notes, “The North American free trade agreement does not cover so-called sub-national governments, such as states and provinces.”

The Canwest News Service article is at http://www.financialpost.com/news-sectors/story.html?id=1613164.

The Globe and Mail report is at http://www.theglobeandmail.com/report-on-business/clement-begins-push-against-buy-american/article1145298/