Ottawa worries "Buy American" sentiment spreading

Wed May 20, 2009 2:57pm EDT
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WASHINGTON (Reuters) - Canada fears that U.S. 'Buy American' policies are spreading and will harm trade and the economies on both sides of the border, Industry Minister Tony Clement, said on Wednesday.

"These provisions seem to be expanding in scope, and they're cascading down the system," Clement told reporters after meeting the U.S. National Association of Manufacturers.

"It seems to be metastasizing a little bit, which is of great concern to Canada," Clement said, adding he would raise the issue with Commerce Secretary Gary Locke and lawmakers.

The Buy American provision in the U.S. economic stimulus package passed by Congress in February aimed to ensure that public works projects use iron, steel and other goods made in the United States, as long as they meet trade agreement obligations.

Ottawa has complained about discrimination against Canadian companies by U.S. state and municipal governments on some water and sewage treatment projects funded by the stimulus bill.

Clement said he is also concerned about a new water and sewer infrastructure bill being considered by Congress.

The U.S. House of Representatives included a Buy American provision in its version of the bill, which it passed in March. The Senate has not yet voted on its version.

Clement said the new provision could backfire on U.S. companies which export $6 billion in water and wastewater equipment and supplies to Canada.

"If this continues, it's going to be injurious to us, but it's also going to be injurious to them," he said.

Some Canadian municipalities have responded by saying they would not buy American goods, but Clement said such protectionism was harmful and "I just don't think we want to go down that road."

(Reporting by Roberta Rampton, editing by Alan Elsner)

<p>Minister of Industry Tony Clement speaks during a news conference in the foyer of the House of Commons on Parliament Hill in Ottawa April 7, 2009. REUTERS/Blair Gable</p>