Canada prefers broad solution to Buy American issue

TORONTO (Reuters) - Canada is willing to explore all options to resolve concerns about “Buy American” requirements in U.S. economic stimulus legislation, but an exception solely for Canadian trade is not Ottawa’s preference, the trade minister said on Sunday.

Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill in Ottawa January 29, 2009. REUTERS/Chris Wattie

“We will pursue all possibilities for Canada’s interests, (but) we will also share our concern on a broader level,” International Trade Minister Stockwell Day said on CTV’s “Question Period” program.

“An exception for Canada would be something, obviously, that would better than having none,” Day said when asked what message he gave to U.S. officials in discussions at the World Economic Forum in Davos, Switzerland.

“I also said, from a broader point of view, we are aware of (U.S.) industry leaders saying to their elected representatives that (a Canadian exception) is not a good idea because they have interests in other parts of the world.”

The “Buy American” measure, which would require public works projects to use only U.S.-made iron and steel, passed the House of Representatives in January as part of an $825 billion bill to boost the U.S. economy.

The Senate will begin debate on the stimulus bill on Monday and is considering even broader “Buy American” provisions designed to ensure that the money stays in the United States.

Canada and other nations fear “Buy American” barriers could trigger a cycle of retaliation that would strangle world trade and undermine efforts to end the global economic crisis.

Day said acting U.S. Trade Representative Peter Allgeier told him in Davos that the Obama administration may have a way to sooth Canada’s concerns, but Day stressed he had been given no guarantees.

Canada, the top trading partner of the United States, every year exports billions of dollars worth of steel and iron to its southern neighbor.

Day on Sunday put the value of those exports at C$11 billion ($9 billion), though other estimates are lower.

($1 = C$1.22)

Reporting by Frank McGurty