Canada is launching a major arm-twisting effort in Washington on Tuesday that targets American congressmen and senators vulnerable to tit-for-tat retaliation against U.S. protectionism.
Trade Minister Stockwell Day said Canadian trade officials from across the United States are descending on Congress and will be meeting with lawmakers armed with numbers about how many jobs in their districts could be lost if Canada retaliates against Buy America provisions.
“This is the ongoing full-court press to get the attention of Congress that the Buy America provisions as currently constituted are going to wind up hurting jobs, hurting business on both sides of the border,” he said in an interview.
“We’ve produced a map that goes state by state, shows the vulnerabilities in each state where there are businesses that expressly do business with Canada that are at risk to being hurt if municipalities on our side of the border retaliate.”
Canada’s most senior diplomats in Washington and 13 consuls general are expected to meet with over 75 members of Congress and staff on the issue.
The action follows a narrow vote among Canadian municipalities over the weekend advocating retaliation in kind against Buy America, which forces U.S. municipalities and states to use American steel and manufacturing exclusively for projects paid by taxpayers.
The provisions are believed not to contravene international trade agreements because states and municipalities are not subject to the trade deals.
The Canadian municipalities say it would be fair trade to discriminate against any country that discriminates against Canadian suppliers in local procurement contracts.
Day said one estimate is that 7.1 million jobs in 35 states that have Canada as the chief export market are dependent on trade with their northern neighbour.
In another analysis, the U.S. Chamber of Commerce recently warned President Barack Obama that Canadian retaliation could cost American suppliers US$15 billion a year.
Ottawa has taken a position that although it disagrees with protectionism and retaliation, it understands the sentiment behind the municipalities resolution.
Day said he mentioned the resolution at a meeting with U.S. Commerce Secretary Gary Locke at a meeting on Friday.
“I used that as an example … about what happens when protectionist action is employed,” he explained.
“If you feel somebody has slapped you, your impulse is to slap back. We want to see this headed off before we see a slugfest.”
Opponents of the protectionist measures have also warned that Canadian companies who cannot bid on U.S. contracts to build sewers, repair or construct bridges or highways or install water treatment systems financed by the U.S. federal government won’t be able to buy goods from American suppliers.
Day said the Canadian campaign is getting traction, noting a New York Times editorial last week that warned about the dangers of protectionism, citing the Canadian municipalities resolution, which at that point had not passed.
Elsewhere Monday, Finance Minister Jim Flaherty said Canadian municipalities shouldn’t adopt protectionist measures.
“Protectionism is bad for Canada and bad for the United States. It’s bad for cities, it’s bad for provinces, it’s bad for American states,” Flaherty told reporters after a speech to a conference in Montreal.
The Buy American clause was added to the U.S. stimulus package to ensure U.S. taxpayer money creates jobs as unemployment has reached a 25-year peak in the recession-ravaged United States.
But America’s largest trading partners have warned that protectionist moves by Congress could poison global trade relations, despite President Obama’s assurances that he wants to keep U.S. markets open.