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article imageOntario plans to lash back at states adopting 'Buy American'

By Karen Graham     Feb 7, 2018 in Politics
Ontario - Ontario Premier Kathleen Wynne says her government will introduce a bill this month to retaliate against any U.S. state that adopts Buy America provisions.
Wynne, who has been in Washington this week, met with American lawmakers, business officials, and with the chief U.S. NAFTA negotiator, John Melle. She then shared her views in an interview at the Canadian Embassy.
The premier said her cabinet has examined legislation that will be introduced later this month when the legislature reconvenes. The proposed bill would reduce procurement opportunities for states that adopt Buy American provisions, by allowing provincial officials to write regulations targeting the individual states.
The New York law on procurements
The premier's move centers on a New York law passed in March 2017. The law goes into effect on April 1, 2018 and basically requires state entities purchasing goods over $100,000 to give preference to American-made goods and products.
New York Governor Andrew Cuomo during St. Patricks Day parade.
New York Governor Andrew Cuomo during St. Patricks Day parade.
Governor Andrew Cuomo
Economic Development Minister Brad Duguid and International Trade Minister Michael Chan were in New York last March and had meetings with state lawmakers.
Duigood had a message he hoped would make a difference, telling reporters, "there are a lot of American jobs dependent on an unfettered trading relationship and open procurement between New York state and Ontario that will be at risk if there is not an exemption in place for Canada."
Almost 80 percent of goods New York exports to Canada go into Ontario trading accounts, or about $10 billion, while $12 billion flows back into New York. And The Globe and Mail pointed out that with the Liberal government planning to spend $160 billion on infrastructure over the next 12 years, it makes sense that New York would want to have access to this market.
Premier Wynne talks with Senator Gary Peters about trade policy.
Premier Wynne talks with Senator Gary Peters about trade policy.
Premier Kathleen Wynne
Ontario wants exemption from New York law
Wynne said the Liberal government will respond, in some “proportional” way if the province is not given an exemption, but that seems to be an unlikely wish because the law has had broad bipartisan support in the state.
"I don't want a trade war," Wynne said. "But we have to stand up for Ontario businesses, and Ontario workers, and do that in a proportional way. ... We are not going to roll over." Wynne says she doesn't want to create any problems, but the size of each punishment will be proportional to the size of the Buy American exclusion, and no more than that.
Wynne say the Canadian government is aware of her plans, and she wants to open discussions with other provinces during the upcoming Canadian premiers conference: "I'll certainly be raising it."
Mark Warner of MAAW Law., a Canada-U.S. trade expert based in Toronto says the move is probably not as dramatic as it is being made out to be. He says Ontario procurement policies have numerous limits to competition, and is far more protectionist than advertised by its politicians.
"Offence sometimes can be good defence, but in this case Ontario government procurement markets may not be as open now as this suggests," Warner suggests. "At the end of the day, state and procurement preferences in a revised NAFTA will have to be negotiated as we did in response to the (2009 U.S. stimulus bill) ... and partially in (the Canadian-European trade agreement)."
More about Ontario, Buy america, Retaliation, Trade, infrastructure bil