Wednesday, February 10, 2010

Buy American and Canadian Too!

The American Recovery and Reinvestment Act of 2009 was the landmark US$787 billion economic stimulus package intended to jumpstart the ailing U.S. economy. While it contained a variety of elements, one of the more controversial clauses was the "Buy American" stipulation. In order to qualify for government contracts, U.S. companies were obligated to buy only from American suppliers and manufacturers.

As both the U.S. and Canada rely heavily on exports between the two nations, "Buy American" was met with strong opposition from both American and Canadian business. Supporters of the clause argued that America needed to boost sales and manufacturing at home. Opponents noted that supply chains north and south of the border are so intertwined that all parties involved would be hurt, not improved.

After months of deliberation between the nations, a multi-faceted trade deal has been reached between Canada and the U.S. All though yet to be fully ratified (the U.S. requires an executive order while Canada requires each province and territory to sign, as well as the federal cabinet), the agreement reflects the spirit of cooperation that has long existed between the two neighbours.

Canadian companies will now be able to bid on procurement contracts in 37 U.S. states. Similarly, U.S. suppliers will receive reciprocal access to provincial procurement. As the possibility of future U.S. federal funding is quite realistic, the current deal contains a commitment to fast-track negotiations on possible "Buy American" stipulations.

As a result of this reaffirmation of the strong links that connect the two nations, talks in Canada of promoting "Buy Canadian" retaliatory actions have been suspended.

Rather than just looking at what's good for each other, both Canada and the U.S. have agreed that maintaining the long-standing friendship will have a positive payout for both countries.

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1 comment:

  1. It's hardly possible to implement "Buy American" limit on businesses. It'll make North American Free Trade Agreement a joke.

    I understand the U.S. government wants to stimulate the economy and retain jobs within the country. However, with globalization, businesses are looking for ways to best allocate resources and maximize profits on a global scale.

    My suggestion is that a government should always be open-minded and keeping up with the time. The key point is to develop competitive advantage to retain or attract jobs other than implementing close-door protection policies.

    The governemnt should also encourage people to learn other useful languages and go to other places to work, such as in Brazil and in China where the economy situation is much more promising. People need to realize that they are not competing with their neighbors or high school mates but with people from all over the world and the trend is unstoppable.

    That's why Americans need to start thinking how to develop their competency and also getting a good attitude towards relocating.


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