Ottawa steps-up tough talk on restrictive Buy American trade rules

The Conservative government is lashing out at rising U.S. protectionism, calling a new wave of Buy American legislation rash and economically destructive.

Trade Minister Ed Fast singled out a spate of recent bills that would block Canadian and other foreign companies from bidding on federal, state and municipal contracts across the U.S., in a statement due to be released Wednesday and in an interview with the Globe and Mail.

Dialling up Ottawa's rhetorical outrage, Mr. Fast complained that "such policies are short-sighted and run counter to the economic interests of both the U.S. and Canada."

Buy American purchasing restrictions, he said, are disrupting North American supply chains and putting investments and jobs in both countries at risk.

"Canada has very rigorously stayed away from imposing new protectionist measures, and what we see in the United States are persistent efforts to find new ways of impeding trade between our two nations," Mr. Fast said.

"There is an element of inconsistency when the U.S. promotes trade liberalization abroad, but at home imposes measures that are entirely inconsistent with trade liberalization, especially when those measures are imposed on its largest and most trusted trading partner."

Mr. Fast said he would reiterate Canada's concerns when he meets U.S. Trade Representative Michael Froman at a meeting of trade ministers from the 12 negotiating members of the Trans Pacific Partnership (TPP) this weekend in Sydney, Australia, as well as to U.S. Commerce Secretary Penny Pritzker at an upcoming meeting in Ottawa.

The tough talk comes two days after Ottawa warned it is ready to slap duties on iconic U.S. products, ranging from California wine to ketchup, after the World Trade Organization found the country's meat labelling laws offside for a third time in five years.

"I'm very disappointed that our largest trading partner continues to introduce new protectionist measures that are completely inconsistent with the U.S.'s obligation under the World Trade Organization," Mr. Fast said.

In his statement, Mr. Fast highlighted several new protectionist purchasing bills now before Congress, including the Made in the U.S.A. Act, the Invest in American Jobs Act and various departmental appropriations bills for Homeland Security, the Environmental Protection Agency and other agencies. The bills cover billions of dollars' worth of federal spending on highways, infrastructure, transit, financial services and general government purchases.

"Our government will continue to engage the Obama administration at all levels," Mr. Fast vowed.

Trade, of course, is a two-way street. And in recent months top Obama administration officials and key Congressional lawmakers have expressed growing frustration with Canada's TPP negotiating stance – most notably its consistent refusal to open up the highly protected dairy, poultry and egg sector to foreign competition.

In late July, 140 U.S. members of Congress urged the White House to boot Canada out of the 12-country TPP talks unless it agrees to give the U.S. access to the supply-managed farm industries. And in March, Mr. Froman – President Barack Obama's top trade official – lumped Canada into the same protectionist camp as Japan among TPP countries. It was considered a slap at Canada because Japan notoriously and vigorously protects key sectors of its economy, including rice and beef.

Meanwhile, there is some dissension in the TPP ranks over Washington's insistence on negotiating individually with newest member Japan, rather than engaging with all members in multilateral talks.