WASHINGTON – When US President Joe Biden was at a truck factory in Pennsylvania on Wednesday, he had a message for foreign companies used to winning contracts with the US government. “They have a new sheriff in town,” Biden said.
It was raising the US-made requirements for public procurement under the Buy American policy to 75% from 55%, and it was creating an accountability office to ensure policy is followed and to publicly report exceptions.
Hearing from the new sheriff, many Canadians used to serving as loyal deputies might wonder if Biden was about to handcuff them.
Especially after Biden’s previous high-profile decisions to cancel the Keystone pipeline and keep land borders closed to Canadian travelers even after fully vaccinated Americans start being able to visit Canada. Half a year into a new presidential administration that is expected to be friendlier to Canada than the previous one, the trend in announcements could be colder than anticipated.
“We certainly don’t see Canadian interests being taken into account in White House decision-making,” says Mark Agnew of the Canadian Chamber of Commerce, noting that he is not necessarily surprised that is the case. “We’re not hearing the same kind of bombastic rhetoric that we hear from Donald Trump, but it’s still ‘America First’ with a different coat of paint on all the cans. The underlying political drivers and motivations are still there. “
The good news for Canadian industry is that Biden’s specific proposal does not seem likely to directly affect Canadian companies. A Canadian government official said as background that Biden’s policy proposal appears to apply to the “America First” policy from which Canada is exempted by trade agreements (rather than the confusingly dubbed “America First” policy that could affect Canada). Biden’s proposal is also subject to a 60-day discussion period during which the Canadian government and its international companies can defend their cases.
Dan Ujczo, a business attorney for Thompson Hine in Ohio, says the deepest immediate concern for Canadian companies is not in the text of the proposal. “The problem is generally not politics or practice. It is perception. So I’ve had a lot of circumstances over the years, particularly with Canadian companies, where they meet all the requirements, but the procurement officer’s perception is ‘It’s Canadian, I can’t take it,’ says Ujczo.
And in a context where the U.S. government is openly discouraging foreign takeovers, and Biden is setting naming and shame reporting requirements, the Chamber of Commerce’s Agnew worries about a possible cooling of the bills. Canadian suppliers that goes beyond any specific prohibition. “If people start to see in your disclosures that you are having foreign companies supply a component to your finished product, then I don’t think in the current political climate that is the kind of attention that American companies are going to want.”
It is also concerning that this rhetorical and political trend toward protectionism continued since the Trump administration could influence the requirements in the next massive green energy and infrastructure spending programs that will make their way through Congress.
Flavio Volpe, president of the Automotive Parts Manufacturers Association, says what is remarkable about Biden is that he is showing a keen interest in industrial policy, which is apparently dedicated to implementing protectionist measures.
Volpe says that at a time when new industries are being established for the next generation of car manufacturing, Canadian companies and governments must target areas where they can contribute and push hard to be included within whatever trade wall it establishes. Biden. “Don’t treat it like it’s the political question this year to answer. Because, at least in our space, in the transportation space, the switch to zero-emission vehicles is as big a change as from one horse to another. It’s the biggest opening for new players, and it’s also the biggest chasm to jump into; you better put your jumping shoes on. “
The Canadian government says it is on the table to present the case. “Canada is actively working with the United States, at all levels of government to strengthen our business relationship and deeply integrated supply chains, to the benefit of our shared environment and the people in both countries,” says Alice Hansen, spokesperson for the Minister. of International Trade. Mary Ng. “We have always taken a Team Canada approach, working with Canadian businesses, governments and workers, to defend Canadian interests, and we will continue to do so.”
From his perspective, Ujczo says he sees evidence in the text of Biden’s specific proposal and in other key business files that the Canadian government’s work is paying off. “I think the Canadian government actually, as well as the provincial governments, have done a very good job of engagement in the first half of the Biden administration,” he says. “We are seeing progress between the United States and Canada on what are more fundamental issues for the future.”
And he says right now is the window of opportunity for a “teachable moment” to ensure that Canada remains a member of the sheriff’s new gang. Recognizing that Biden makes policy primarily for his national audience, says Ujczo. “This is a great moment in the process, over the next month, for Canadian companies in particular to demonstrate, and better yet, for US companies to demonstrate the integrated nature of Canada-US supply chains,” he says. Ucjzo.
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