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As Congress nears the finish line on a bipartisan infrastructure bill that would bring $550 billion in new spending, the U.S.’s neighbor to the north understands the impulse to enact procurement policies that favor domestic firms.
But “Buy American” provisions locking Canadian suppliers out of the market or making it more difficult for them to integrate with American bidders could actually be counterproductive, said Kirsten Hillman, Canada’s ambassador to the United States.
“What we’re trying to express to the administration, to members of Congress, is that when you apply that policy to the Canada-U.S. trade relationship, you actually aren’t creating jobs; you are actually putting U.S. companies and jobs at risk because these supply chains are so deeply integrated,” Ms. Hillman said.
She also hinted that raising the domestic content requirement of goods purchased by the U.S. government could trigger reciprocal action by politicians in Canada, which she said would be a loss for both sides.
“Georgia will lose out,” she said during a World Affairs Council of Atlanta virtual forum Tuesday, “because those inputs from Georgia that we would use in products for government procurement can’t be used anymore. There’s no reason to do this. It will lead to job losses and challenges for businesses.”
Watch the full conversation:
In a conversation with council President Charles Shapiro, the ambassador underscored the importance of integrated North American supply chains in industries from cars to pharmaceuticals, stressing that Canada and the U.S. operate along with Mexico as an integrated region of production.
A trade expert who led Canada’s negotiations on the Comprehensive and Progressive Trans-Pacific Partnership (whose final talks were held in Atlanta) she said 60 percent of the countries’ bilateral trade volume consists of inputs that go into finished goods, making disentangling each side’s value creation next to impossible.
She also argued that the pandemic has provided a “moment of reflection” on the broader importance of working together in times of crisis. While U.S.-Canada squabbles mostly center on “neighbor issues,” that proximity and interdependency have also been revealed as a strength amid COVID-19, she said.
Canada sent nurses to care for sick Americans, while the U.S. shared vaccines with Canada. Auto parts suppliers on both sides of the border partnered to produce ventilators, and the two governments have coordinated to keep borders open to trade — if not tourists.
That same spirit should drive collaboration on climate change and on Arctic issues, as well as on industrial policy.
“We are looking at the ways in which we can leverage our highly educated populations, our innovation, our drive, our natural resources, to be at the forefront of a lot ff the technologies that are going to be coming forward,” she said.
Canada, she said, is the largest ex-Asia maker of electric-vehicle batteries and has made a 2035 commitment to zero-emission vehicles, boasting the natural resources including rare earth minerals needed for production as well as a strong contingent of automotive firms from all over the world.
Georgia, another hub for foreign auto suppliers, just launched a statewide initiative to be a hub for electric mobility, building on the $2.6 billion SK Battery plant. These kinds of initiatives, powered by the region’s intellectual knowhow and well-prepared workforce, should be “supercharged” to help North America overcome challenges from other regions, Ms. Hillman said.
“Let’s out-compete the world, let’s out-compete everybody. Let’s be the center of excellence for what is coming. We have all the tools to do it,” she said. “That’s where I think we can push our relationship to the next level.”
On Aug. 9, Canada plans to reopen to fully vaccinated American tourists, though the U.S. just extended its ban on non-essential travel at the U.S.-Canada border through at least Aug. 21. Canadian tourists can travel to the U.S. by air, but not by over land or by ferry.
Facing less vaccine skepticism than in the U.S. and with a tenth of the population, more than 70 percent of Canadians are expected to be double vaccinated by the end of September.
Travelers going into Canada from the U.S. will have to use the ArriveCan digital platform to show proof of vaccination.
Ms. Hillman was introduced at the event by Louise Blais, Canada’s acting consul general in Atlanta, who returned to the city in April after serving as Canada’s deputy permanent representative and ambassador at the United Nations. Read more about her time at the UN here.
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