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article imageOntario pushes for exemption to New York 'Buy American' policy

By Karen Graham     Mar 21, 2017 in Politics
Two Ontario cabinet members are meeting with officials in Albany, New York today to urge legislators to exempt Canada from a "Buy American" policy expected to pass on March 31, warning that if this is not done, it could lead to a trade war on both sides.
It's hard enough to grasp President Trump's threat to increase tariffs on goods from Canada and Mexico, but New York Governor Andrew Cuomo wants to go even further.
During a State of the State message in Syracuse on January 11, Cuomo announced a new proposal that would implement the nation’s strongest mandate for the purchase of American-made products by state entities. If the "Buy American" legislation passes, it would require 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
What Governor Cuomo was referencing was the "Buy American Act" of 1933, signed into law by President Hoover. The 1933 act required that the United States government show preference to U.S.-made products in its purchases.
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Economic Development Minister Brad Duguid and International Trade Minister Michael Chan are hoping to convince legislators that not only will this legislation have a negative impact on Canada's economy, but it would be in New York's best interest to allow Canada the exemption.
"The message we'll be bringing to our friends to the south will be: 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," Duguid said in an interview, reports CTV News 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. The Globe and Mail points out that with the Liberal governments 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.
Duguid is concerned that Ontario and Canada will be shut out if the proposed legislation is adopted on March 31. Duguid says that if he's not successful, Ontario will look at a bilateral deal to get around the Buy American clause, or look at other options.
US President Donald Trump (R) and Canada's Prime Minister Justin Trudeau speak during a joint p...
US President Donald Trump (R) and Canada's Prime Minister Justin Trudeau speak during a joint press conference in the East Room of the White House on February 13, 2017
Mandel Ngan, AFP
"Obviously we would look at all of our options with regard to access," Duguid said. "If a jurisdiction is going to discriminate against Ontario companies we need to look at our options in terms of the alternative."
Basically, the argument over President Trump's "protectionism" policy is coming to a head. Cabinet ministers are armed with a list of talking points to use when discussing trade options with their counterparts in the states, and Ontario Premier Kathleen Wynne has sent letters to the governors of 27 states for whom Ontario is the top or second leading export destination.
Will all this work? Carleton University professor emeritus Michael Hart is a trade expert, and he says Duguid will have little chance of success. "It's a very tried and true argument but it really doesn't play much," he said. "Put this down to largely grandstanding." Even Duguid admits that getting an exemption won't be easy.
More about Buy American, New york state, governor cuomo, Canada, exemption request