Canadian companies fret over "Buy American" clause

Wed Feb 4, 2009 9:42am EST
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By John McCrank

TORONTO (Reuters) - The bulk of the raw steel that Walter Koppelaar buys comes from mills in the United States. His Canadian company fabricates it into bridge or building parts that are often shipped back to the U.S. market.

But a "Buy American" provision attached to the nearly $900 billion stimulus package working its way through the U.S. Senate may close the door to such products.

Last week, the U.S. House of Representatives passed a version of the bill that said only U.S.-made iron and steel be used in any public works projects funded from the package.

The version currently being debated in the U.S. Senate expands the provision to include that any manufactured goods purchased under any public works projects be American made.

"If they truly do not allow any manufactured product from Canada, regardless of raw material origin, that would be serious," said Koppelaar, president of Walters Group, in Hamilton, Ontario.

"A fair number of Canadian manufacturers depend fairly heavily on U.S. exports, we being one of them."

Walters Group does 40 to 45 percent of its business in the United States.

There are probably 15 to 20 steel fabricators across Canada that depend on the U.S. market for a good chunk of their business, said Steve Ross, General Manager at Cherubini Group, in Dartmouth, Nova Scotia.   Continued...