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The high-tech rebirth of Canada's textile industry Add to ...

Canadian products have also been deemed impure by procurement policies. After U.S. stimulus legislation was enacted in 2009, many of MW Canada's stateside customers threatened to cancel orders for its waste water filtration media because the products were destined for use on jobs that suddenly had to be 100-per-cent American-made.

MW Canada scrambled to adjust, eventually finding a U.S. partner that agreed to provide workers if MW supplied the necessary equipment for its North Carolina plant.

"What really burned me is that we did all the development work in Canada and I don't produce it here," Mr. Berger says. "That's so dumb. Isn't that the kind of innovation that we want in Canada?

"It is a crime - we're shipping jobs away from here. You know, I say to our politicians, you are making us do business with one hand tied behind our back."

In February, 2010, the U.S. and Canada signed an agreement that gave relief to Canadian suppliers - but only on contracts in some states, and of those, only contracts over sizable value thresholds.

The new trade agreements and the creeping expansion of existing procurement policies - notable among the latter is the Berry Amendment, which restricts military buying to American suppliers - prompted FilSpec to purchase a U.S. plant in 2009. It employs almost 180 people, slightly more than FilSpec's Canadian work force.

The acquisition enabled the company to continue selling yarns to U.S. customers who make products for the U.S. Army. A larger U.S. presence also allowed FilSpec to hedge against the rising loonie by buying and selling more in U.S. dollars. American sales now account for 70 per cent of FilSpec's business.

With the Canadian dollar regularly trading above parity, FilSpec is mulling making more acquisitions south of the border. Indeed, industry executives say they have ever-fewer reasons to make acquisitions or other investments in Canada because Ottawa has failed to champion their industry at home.

For instance, unlike its U.S. counterpart, the federal government does not compel the Department of National Defence to buy from Canadian manufacturers. "If you haven't got the government procurement, if you haven't got good trade agreements, if you don't have a domestic market, then the industry is not going to invest," Ms. Siwicki says.

Yet another sore spot between the industry and Ottawa is the Least Developed Countries Market Access Initiative, which eliminated quotas and duties on imports from scores of developing countries in 2003. That change by itself touched off a spate of plant closings in Canada, while forcing other manufacturers to move production offshore.

Ottawa, though, has unfurled a number of initiatives to help the industry - it has eliminated tariffs on raw materials and equipment that the industry imports from abroad, and provided a modest amount of funding for industry programs.

The next concern for the industry is, not surprisingly, new rounds of trade talks. There are fears that the industry's rustbelt reputation will taint the perceptions of politicians as Canada negotiates monumental agreements with the European Union and India.

"India as a big market. Europe is a big market," Ms. Siwicki says. "It is important that the Canadian negotiators come back with something that gives us true access to those markets."

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