The long arm of the protectionist Buy America Act is reaching deep into Canada – to remote B.C.
Canadian iron and steel has been banished from a major overhaul of the Prince Rupert ferry terminal because the U.S. government is footing the bill for the bulk of the work.
The project highlights the growing “ridiculousness” of proliferating Buy America laws and the damage they cause in Canada, complained Martin Lavoie, director of policy at the Canadian Manufacturers & Exporters.
“This is Buy America, in Canada, on federal land,” Lavoie said.
But there may be little anyone one can do about it, including the federal government, which owns the port and the land, according to officials in B.C. and Alaska.
The fact the Buy America rules would apply to work in Canada doesn’t sit well with steel makers and fabricators, who say they’re increasingly getting the short end of the North American steel trade. They’re shut out of billions of dollars worth of government-funded transportation projects in the U.S., while their U.S. rivals are generally free to bid on similar work in Canada.
“We’re giving foreign competitors keys to our back door,” said Edward Whalen president of the Canadian Institute of Steel Construction. “It isn’t right and it isn’t fair.”
The port of Prince Rupert, located 750 kilometres north of Vancouver near the southern tip of the Alaska Panhandle, sits on Canadian Crown land. But it’s leased back to the local port authority, which has sublet the ferry terminal to the Alaska Marine Highway System under a 50-year lease that expires in 2063.
Bidding documents posted on the Alaska Department of Transportation website make clear that “all iron and steel products associated with this project are subject to the Buy America provisions.” The $10-million to $20-million (U.S.) project, slated to begin shortly and be completed in 2016, is being funded by the U.S. Federal Highway Administration and the state of Alaska.
The situation makes a mockery of free trade, Whalen argued.
“What’s shocking about this is that, not only is Buy America very pervasive in the U.S., now they’re extending their tentacles into other countries,” Whalen lamented. “That’s just going a little bit too far.”
Canada has an annual trade deficit of nearly $1-billion a year with the U.S. in fabricated steel, a reversal of the $1.2-billion surplus it enjoyed as recently as 2008. And Whalen said Buy America is a contributing factor.
The Prince Rupert case comes just months after U.S. authorities ordered the dismantling of a newly built bridge in the small town of Morrison, Colo., after discovering it contained Ontario-made steel beams, in contravention of Buy America rules. The U.S. Federal Highway Administration later backed down, and agreed to pay for the bridge.
The ultimate solution is for Canada and the U.S. to negotiate a reciprocity agreement covering government purchasing – an area left largely outside the North American free-trade agreement.
Industry officials said Ottawa and the provinces are not doing enough to push the U.S. to negotiate a reciprocity deal on government purchasing.
“It can happen in any sector,” pointed out the CME’s Lavoie. “We need long-term protection.”
He said the best way to get the Americans’ attention would be to impose similar Buy Canadian restrictions on all federally funded infrastructure projects, including the $5.8-billion in spending announced this week by Prime Minister Stephen Harper for everything from museums to small-craft harbours.
“We need to get the parties back to the table to negotiate a strong North America, but until we close the door, we can’t have both doors open,” Whalen added.
Source: http://www.bnn.ca/