Canadian politicians are in an uproar. The U.S. House of Representatives voted Wednesday for a so-called “Buy America” provision that would call on major public works projects to favour U.S. steel over imports. Liberals, who wouldn’t do anything anyways, are all over the Conservatives for not protesting more. Now…let us look at this a little more closely.
First and foremost, due to the fact that this is Federal money being used for major public works projects, it automatically falls under the Buy America Act, which clearly requires that the United States government prefer U.S.-made products in its purchases. This act was passed by Congress in 1933! It took our politicians 76 years to figure this out?
There are two exceptions to the Buy America Act. The Act can be waived if the burden of purchasing domestically manufactured products is deemed to be unreasonable. It can also be waived by the President within the terms of a reciprocal agreement (in this case NAFTA) via the Trade Agreements Act. There are still a couple of hurdles to clear when selling foreign-made product to the United States Government.
First and foremost, all government contracts in excess of $25,000 are tendered out to bid. Any company, foreign or domestic, can bid on these tenders. Foreign-made product is subject to the Trade Agreements Act of 1979. Certain countries are ineligible to do business directly with the United States Government due to being considered hostile (Iran, North Korea, Cuba), having an oppressive regime (China, Indonesia), or not having a valid trade agreement (Taiwan, Russia). As it pertains to Canada, we have no such restrictions.
Secondly, it helps if you are a preferred supplier to the United States Government. To achieve preferred status, you must acquire a contract to sell your products from the General Services Administration (GSA). All bids and tenders are listed on GSA as well as its sister site FedBizOps. Obtaining such a contract can involve a number of hurdles, but ones they have been passed, the business opportunities are only limited by the amount of time that you have.
Public Works projects use steel. Lots of steel. China currently owns twenty percent of the global steel market. Companies based in the United States own less than three percent of the global steel market. Canadian companies have no significant investment in this market (Dofasco is owned by ArcelorMittal and Stelco is owned by U.S. Steel). Of course, these two companies employ many Canadians, but even if the United States chooses not to purchase the steel manufactured in Canada, the global market is ready, willing, and eager to gobble it up. Yes…we are in the midst of a global economic downturn (how many times will I have to hear that) but infrastructure projects are always being built. The steel market has never been healthier.
As a complete aside, 316 is one of the most popular grades of steel. Interesting. I always wondered why I was getting many hits from people looking for steel. Now I know.
As for my own opinion on such matters concerning how the Canadian government should administer the spending of our money, I think that they should take a very close look at how the United States does business. Canada is extremely inefficient when soliciting tenders, and the system is radically expensive and bass-ackwards. The U.S. Government – technically the largest business on the planet – is very streamlined. It costs relatively little to be a participant and viewing all of the tenders is easy and free of charge. They have reserved bids for small businesses, minorites, veterans, and women. In short, they make it easy to do business with them compared to Canada.
Simply put, our government needs to stop pissing and moaning and take a look at itself, then at the United States, and then back at itself. Maybe they would learn something rather than whining about laws that are over 75 years old.