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Barrie McKenna (Kevin Van Paassen)
Barrie McKenna (Kevin Van Paassen)

Barrie McKenna

Canada's nice-guy strategy a flop in fight against Buy American Add to ...

As lobbyists go, Jayson Myers of Canadian Manufacturers & Exporters is pretty tame.

A trained economist, Mr. Myers chooses his words carefully and deliberately. He avoids fiery rhetoric and he's quick to acknowledge the nuances and complexities of government decision making.

But the CME president isn't hiding his growing frustration with the slow pace of negotiations between Ottawa and Washington about the Buy American legislation.

"The longer they take, the less value there is from our vantage point," he said on a recent trip to Washington. "Jobs are being lost now. Contracts are being lost now."

Roughly five months have passed since Ottawa offered the Obama administration a good deal: Give Canadian companies a piece of the billions being spent on economic stimulus in the United States in exchange for guaranteed American access to a similar volume of provincial and municipal purchasing in Canada.

And yet the offer languishes, a forgotten speck in a sea of more pressing issues on the Obama administration's horizon. A few weeks from now, the proposed deal will be near worthless. As much as 40 per cent of the money from the American Recovery and Reinvestment Act has already been spent. By Feb. 17, what's left will be committed and on its way out the door.

"The clock is ticking on an agreement," said Mr. Myers, pointing out the obvious.

And if Canada can't get a deal on the first stimulus bill, Buy American measures are likely to be replicated and even strengthened in future spending measures.

The restrictions are already in the next major stimulus bill in Congress, the Jobs for Main Street Act.

Mr. Myers has worked the Buy American file harder than just about anyone. He has made countless trips to the United States, pleading his case at the White House, on Capital Hill, to K Street lobbyists and U.S. manufacturers.

And every time, he reminds them of the absurdity of putting barriers in the way of extensive and long-standing cross-border supplier relationships. They needlessly inflate costs and hurt both countries.

It might seem logical to Congress, and to most Americans, to banish foreign products from stimulus projects when unemployment is at 10 per cent.

The reality is more complex. What happens when a Michigan company selling municipal waste-water equipment buys some of its key components in Canada? Or what about building-frame components, welded and moulded in Canada, using U.S. steel?

Too bad. They don't qualify under Buy American.

Those complex rules have slowed U.S. stimulus projects and cost jobs, in the United States, as well as Canada.

Unless an 11th-hour deal is worked out, that's the way it's going to be. Another key component of the integrated Canadian-U.S. economy will fade into history, rupturing forever long-standing supply chains.

There's a lesson in all this - about lobbying and about dealing with the Obama administration.

Like those not-too-light, not-too-heavy Bud Lite television ads, Canada may have played this issue far too passively.

Trying to curry favour with a new administration last spring, the Harper government opted for "too light." They hinted about possible retaliation by municipalities and they warned meekly about U.S. trade obligations. But mainly, they whined about the unfairness.

The Obama administration, and Congress, either didn't hear the message or didn't care.

Even Mr. Myers now concedes Ottawa may have been too meek. "Probably, in retrospect, it might have been useful to be more forceful," he said.

And this from a guy who isn't fond of retaliation. Mr. Myers said getting even is a "slippery slope" that could lead to a dead end for Canada.

Six months ago, the Harper government had options. It could, for example, have put more leverage behind its threats by taking a high-profile batch of its own stimulus projects and putting them off-limits to U.S. companies. Ottawa could have promised to unwind those restrictions the moment Congress exempted Canada from Buy American rules.

Instead, Ottawa pressured Canadian municipalities to back off any retaliation until after negotiations.

And then the Harper government quietly launched talks with Washington, without a clear deadline.

Now retaliation would be too little, too late.

Next time, Ottawa might want to act a little more like the woman in one of those Bud Lite spots who break up with her boyfriend by tossing him out of a moving car.

Heavy, perhaps. But effective.

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