Canadian firm cries foul over Buy American provision on state contract

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OTTAWA - A Canadian manufacturer says his company is being shut out of a bidding process in Maryland by the same ''Buy American'' policies that President Obama has assured Canada is not protectionist.

OTTAWA - A Canadian manufacturer says his company is being shut out of a bidding process in Maryland by the same ''Buy American'' policies that President Obama has assured Canada is not protectionist.
Now the Toronto-area company which does a majority of its sales with the United States says it may have to move operations south of the border to save the business.
And what is occurring in Maryland may only be the tip of the iceberg given the current protectionist sentiment in the U.S. Congress, says the president of Hayward Gordon Ltd., a Toronto-area company that produces industrial-grade water pumping and mixing equipment.
''This is shutting out any non-American company from doing business on any public infrastructure,'' said John Hayward, whose Halton Hills, Ont. company employs 75 people.
Hayward said he had been working for two years to bid on the Maryland water treatment project, which he believes was potentially worth about $200,000 for his company. Now he's been shut out.
The Maryland sanitary bid document calls on contractors to ''provide a list of all iron, steel, and manufactured goods 'not' produced in the United States to be precluded from the (federal) funding.''
Hayward said no contractor would stand a chance of winning the bid if they included any non-American suppliers.
More importantly, he says, he may have to shift production south of the border to keep selling to U.S. markets which represent about 75 per cent of his water pump sales.
''We just spent $7 million on a brand new factory two years ago that's going to be gutted as a result of this,'' he explained.
Canadian Manufacturers and Exporters president Jayson Myers said he's hearing more and more complaints and concerns from Canadian suppliers.
He said firms hoping to bid on American highway and energy projects, particularly for green energy initiatives, are fearful of being shut out. He added Canadian suppliers are also experiencing increased export controls on U.S. military contracts.
''They're concerned this an indication of things to come,'' he said.
Last month, Ottawa claimed victory over the Buy American clause attached to President Barack Obama's US$787-billion economic stimulus package after the White House succeeded in including a rider that U.S. treaty obligations must be respected.
During his visit to Ottawa on Feb. 19, Obama reiterated his support for unfettered trade, saying the clause would not significantly impact Canadian producers and suppliers who want to bid on U.S. contracts.
''I expect four years from now the U.S.-Canada relationship will be even stronger than it is today. I expect increased trade, I think we'll see increased integration of efforts on energy and various industry, and I think that's to be welcomed,'' he said at the time.
But the early signals are not good. Rather than limit the use of Buy American provisions, the U.S. House of Representatives will likely approve a new $15-billion bill for water quality projects this week - beyond the already approve stimulus package - that also contains the protectionist clause.
It is unclear whether Ottawa can challenge the application of the provision, since federal funds are being channelled to state and municipal governments that are not subject to the North American Free Trade Agreement.
Trade Minister Stockwell Day responded to a request for an interview by email, saying the government is monitoring the situation.
But he also stressed that the United States ''has never had a World Trade Organization or NAFTA obligation to provide access to Canada for state or local level procurement.'' Canadian provinces and municipalities are also exempt from trade agreements.
The difference, says Hayward, is that he's never seen the U.S. resort to such stringent protectionism as he is seeing now. The company has been in business for 56 years and exports about $6 million in manufactured goods to the U.S. annually.

Organizations: U.S. Congress, Hayward Gordon, U.S. House of Representatives World Trade Organization

Geographic location: United States, OTTAWA, Maryland Canada Toronto Halton Hills

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