Friday, May 15, 2009

US promises: made to be broken

Trade Wars Brewing In Economic Malaise
Outrage in Canada as US Firms Sever Ties to Obey Stimulus Rules

The Washington Post: Ordered by Congress to 'buy American' when spending money from the $787 billion stimulus package, the town of Peru, Ind. stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with US state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA...

This week, Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring US companies from their municipal contracts -- the first shot in a larger campaign that could shut US companies out of billions of dollars worth of Canadian projects...

Initial concern north of the border over the buy American provisions died down after a clause, supported by the administration, was inserted in the bill clearly stating that the measure would not supersede existing US trade obligations... But in recent weeks as federal authorities drafted broad guidelines for implementing the law and hundreds of states and towns have begun preparing for stimulus-related projects, Canadian companies have been surprised to discover that while some federal contracts are still open to Canadian materials and equipment because of trade treaties, most of those issued by state and local governments are not.
Image source here.