Joe Biden’s signing on January 25 of an executive order strengthening the Buy American Act served as a wake-up call for Canada. “ Joe Biden is going to be a more predictable, more courteous and more respectful partner of multilateralism, but he will certainly not be less protectionist than Donald Trump “, warns Richard Ouellet, professor of international law at Laval University in Quebec.
This new presidential decree, in line with the electoral commitments of the Democratic candidate, demands a complete review of the application of the Buy American Act, a law dating from 1933, which allows to favor national suppliers in the award of public contracts. A sign of the importance given to this tool intended to revive national production and to preserve local industrial jobs, a “Mr. Made in America” will be appointed to the White House.
“ Our manufacturers are worried “, testifies Véronique Proulx, president of the Manufacturers and exporters of Quebec. “ If access to US public markets tightens, our entire industrial fabric will suffer. “ In 2019, the US federal windfall alone represented nearly 600 billion US dollars (500 billion euros) of contracts. Through exemptions obtained by Canadian companies, cross-shareholdings in American-Canadian consortia, Canadian companies had managed to interfere in these public contracts – admittedly for less than 1% of their total value, but that was everything. it is also a boon for the “maple country”, which largely lives on its commercial relationship with its big neighbor.
“Very negative signal”
In 2020, more than three quarters of Canadian exports were destined for the US market. Today, these manufacturers fear that a more rigorous application of American law will deprive them of any possibility of exemptions. Many try to reassure themselves, considering that it is above all, on the part of Joe Biden, a political posture supposed to please his own voters.
“ All of the supply chains in our industry are so tied to the United States that these economic shutdowns don’t make sense. But they send a very negative signal, which could break the momentum of recovery on both sides of the border ”, fears Vincent Trudel, vice-president of operations at Marmen, a company specializing in the construction of wind towers. To win a major call for tenders for offshore wind turbines launched by New York State in 2020, the company has also undertaken to build a manufacturing plant on site. He was not obliged to do so, but “local production” has long been an additional guarantee of winning the market.
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