Canada may raise "Buy American" issue with Obama

Sat Jan 31, 2009 3:02pm EST
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By Randall Palmer

OTTAWA (Reuters) - The Canadian government voiced cautious optimism on Saturday about a solution to concerns about a "Buy American" provision but, if that fails, Prime Minister Stephen Harper was likely to raise the issue with U.S. President Barack Obama at their February 19 summit in Canada.

Canadian International Trade Minister Stockwell Day made the remarks after he met acting U.S. Trade Representative Peter Allgeier about a "Buy American" measure now moving through the U.S. Congress.

"The (Obama) administration is very aware, and there seems to be a desire to do something to mitigate the effects of this legislation," Day told reporters in a conference call from the annual World Economic Forum meeting in Davos, Switzerland.

"If it's not resolved by the time the president arrives ... I just know how concerned our PM (prime minister) is on this and you can do your guesswork from there."

The "Buy American" measure, which would require public works projects to use only U.S.-made iron and steel, passed the House of Representatives last week as part of an $825 billion bill to boost the U.S. economy.

The Senate will begin debate on the stimulus bill on Monday and is considering even broader "Buy American" provisions designed to ensure that the money stays in the United States.

Canada, the top trading partner of the United States, every year exports about C$6 billion ($5 billion) worth of steel and iron to its southern neighbor.

Canada and other nations fear "Buy American" barriers could trigger a cycle of retaliation that would strangle world trade and undermine efforts to end the global economic crisis.   Continued...

<p>Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa January 29, 2009. REUTERS/Chris Wattie</p>