With the prospect of a blanket exemption from Buy American policies now looking unlikely, Canada is seeking a deal that would allow Canadian firms to take part in the Biden administration’s green energy push, said Canada’s chief trade negotiator.
“The prospects of us getting a complete exemption from the Buy America provisions is something that’s not likely to be politically possible in the U.S.,” Steve Verheul, chief trade negotiator, told a parliamentary committee today.
Verheul told MPs that Canada is looking for sector-specific exemptions in negotiations with the U.S. He said the most likely area where the two countries could work together is on green energy and other green initiatives.
“That’s the major focus that we’re looking at because that’s, I think, where we can very easily align with the U.S., demonstrate that those markets, like many others, are very integrated and that we can produce a lot of those types of goods and services together,” he said.
Canada has the advantage, Verheul added, of being a much more reliable supplier to the U.S. than other countries might be when it comes to green energy investments.
Canada’s Chief Trade Negotiator Steve Verheul says “it’s not likely politically possible” for Canada to be completely exempt from the U.S. Buy American policy. 1:10
That hope for a lucrative exemption from the U.S. on clean technology has been stoked by recent developments.
Biden administration officials have on multiple occasions referred to Canada as a partner in building a clean energy economy.
The president’s top climate envoy, former secretary of state John Kerry, delivered that message again this afternoon.
Speaking to a virtual forum hosted by the Canadian government, Kerry said Canada and the U.S. are connected on climate issues and both stand to gain economically from the pursuit of net-zero emissions.
“We know that our fates are tied on this issue,” Kerry said in a video released as part of Great Lakes Day 2021. “The United States and Canada face similar climate impacts in the Arctic, along our coasts and throughout the entire continent.
“Our policies are also deeply tied — we share an energy system and a vehicle supply chain. We also stand to both benefit, greatly, from the economic opportunity of building a clean energy future. The United States and Canada can, together, create millions of good, high-paying jobs to reach the net-zero future.”
The cost to Canada
Asked by MPs how much Buy American might cost the Canadian economy, Verheul said he wasn’t sure because Canada hasn’t seen details of Washington’s infrastructure plan.
Canada supplies steel, aluminum and concrete products to the U.S. that the American economy cannot produce itself, Verheul said, expressing optimism that the Biden administration’s willingness to consult with Canada will provide opportunities.
“What we’re trying to do on Buy American is make sure that we have the proper kinds of relationships with the new U.S. administration, that we can have these kinds of conversations,” he said.
“They have opened that door … and there’s an openness to make sure that they don’t take actions that are going to cause damage to us that we would certainly have difficulty with.”
Asked what the impact on the Canadian economy would be if the U.S. offered Canada no exemptions from Buy American, Verheul was less optimistic.
“If they did have a strict Buy America it would be costly because we supply a lot of the goods that go into the products that they are looking for,” he said.
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