Three expert speakers explained the importance and impact of the "buy American" provision on Canadian trade at a Nov. 25 discussion panel hosted by the Sprott International Business Association.
The provision, passed this year, was included in the United States stimulus bill to encourage the purchase of American goods by Americans on a preferred basis. In Canada, 80 per cent of exported goods go to the United States.
Whether you are an international business student or the average Canadian, the buy American provision carries many concerns about the businesses and industries in Canada, as well as the study of future Canada-United States trade relations.
“The provision creates uncertainty, which is the worst thing for businesses,” said Jean-Michel Laurin, a speaker on the panel and the vice-president of Global Business Policy for the Canadian Manufacturers and Exporters.
Laurin said the provision could have a damaging impact on Canadian industries as it delays the spending of stimulus money by American companies.
Although there are problems with the buy American provision, the United States is trying to fix it, said Eric Benjaminson, minister counsellor for Economic and Science Affairs at the United States Embassy.
“The provision will kick-start the [United States’] and global economy,” Benjaminson said. “It’s a necessary evil.”
Rick Tachuk, vice-chairman of the Ontario chapter of the American Chamber of Commerce, agreed with both speakers on the provision.
“Export trade is very important to Canada,” Tachuk said, “but protectionist pressures from stimulus spending will dissipate.”
We should look at the positive aspects of Canadian and American trade relations, building on the good work, goodwill and co-operation of both countries, Tachuk said.
All three speakers agreed that retaliation by Canada or other nations will cause more harm to the global economy.
“We don’t want a situation where [a protectionist policy] is put in place,” Laurin said.
The provision may also give some businesses a chance to expand.
“There are market opportunities in all this chaos,” Benjaminson said.
The discussion panel gave students an opportunity to apply their knowledge to a current issue affecting economic relations between Canada and the United States.
While the long-term impact of the provision is still uncertain, Carleton’s international business students will be part of the generation facing future changes in Canadian trade.