Clifford Sosnow is a partner in Fasken Martineau’s Toronto and Ottawa offices. He specializes in trade and government regulations and can be reached at firstname.lastname@example.org. Below, Mr. Sosnow offered his warning for the unintended consequences that may face American businesses who distance themselves from their would-be partners north of the border.
MPT: Were the proposed restrictions on continental imports expected?
Clifford Sosnow: While disappointing and troubling, this is not a complete surprise. In January, shortly after taking office, President Trump commissioned the U.S. Secretary of Commerce to prepare a plan that would require all pipelines to be constructed or retrofitted wholly from U.S. iron or steel. The Department of Commerce’s plan was expected to be on the President’s desk by July 23, 2017.
Yet, as of the date of publication, the Department of Commerce’s report on the feasibility of President Trump’s agenda for the pipeline industry is still pending. In a February 28 address to a joint session of Congress, the President said he will be seeking Congressional approval for legislation “that produces a USD 1 trillion investment” in U.S. infrastructure that “will be guided by two core principles: Buy American, and hire American.”
MPT: How will these regulations differ from existing trade agreements?
Clifford Sosnow: Buy America is not new. The Buy America Act, which came into force in 1982, and which applies to grants from the Federal Transit Administration and Federal Highway Administration, requires 100 percent U.S. content for iron or steel and other manufactured products in any bid on transit-related procurements over USD 100,000.
Additionally, in February 2009, President Obama issued the American Recovery and Reinvestment Act (ARRA), that required that no ARRA funds be used for the “construction, maintenance, alteration or repair” of a federal, state or municipal public work or public building unless any iron, steel, and manufactured goods used in such project was produced in the U.S. But the ARRA expressly required that this restriction be applied in a manner consistent with U.S. obligations under international agreements.
MPT: What are U.S. obligations under international agreements?
Clifford Sosnow: Under the NAFTA, the U.S. must extend non-discriminatory treatment to potential Canadian and Mexican suppliers on government contracts that exceed certain monetary thresholds for the goods and services listed in the NAFTA.
Buy America laws restrict access to U.S. infrastructure projects. But these restrictions are limited by U.S. international trade obligations, including under the NAFTA. For infrastructure companies, and those providing goods and services to these companies, knowing these trade obligations and how the current NAFTA negotiations may be leveraged to obtain greater access, may mean the difference between accessing future lucrative infrastructure projects or the loss of strategic opportunities and market position. ◆
MODERN PUMPING TODAY, September 2017
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