Canadian Trade

The U.S. has a long history of economic protectionism and, with exception of the Trump era, Democrat-led administrations have typically set a more protectionist tone than Republican administrations. 

President Joe Biden is enacting Buy American policies to ensure U.S. companies and U.S. workers reap the benefit of American government spending. That said, it’s no surprise that American allies oppose Buy American efforts, fearing the loss of lucrative government contracts.

Canada’s Prime Minister, Justin Trudeau, raised his concerns in his phone call with Biden. A key point made by Trudeau is that an aggressive Buy American campaign might complicate Biden’s hopes of securing a united front among American allies to meet the rising Chinese global influence.

Canadian observers say President Biden’s protectionist approach comes as no real surprise, given Joe Biden’s relatively recent history. Mark Warner, an international trade lawyer based in Toronto, says the former Vice President Biden was charged with overseeing the American Recovery and Reinvestment Act just 12 years ago, which had a strong Buy America provision.

Canada was able to negotiate around the Buy American provision a decade ago, but that was before the new NAFTA, the USMCA, came into effect.

“I will remind people, when Joe Biden was vice-president, tasked with the 2009 Restructuring Act, which had a Buy American provision that Canada had to negotiate its way out of. The USMCA did not have a government-procurement chapter in relation to Canada. Is there some scope for some limited bi-lateral agreement, procurement agreement, or something?”

 

As usual Canadian leaders are setting an optimistic tone.