“Wiser heads will prevail”

London Chamber head Gerry Macartney advises manufacturers to take a “wait-and-see” approach to Buy American order

WHEN U.S. PRESIDENT Joe Biden signed an order to limit foreign outsourcing of federal contracts — the so-called Buy American executive order — it predictably led to an anxious week within the halls of Canadian industry.

Fears grew that the order would completely shut Canadian manufacturers and exporters out of the American economy, or that it was essentially an incentive for Canadian companies who rely on those contracts to move south, or that it would have a negative effect on the cross-border economy more generally.

The Canadian Chamber of Commerce criticized the order very quickly, making a vague demand that the government consider “all options” in response.

“Buy American restrictions remain a perennial problem for Canadian businesses seeking to access government contracts with our largest trading partner. The rules have progressively tightened over the years, and today’s announcement represents another unhelpful step to make it more difficult for Canadian businesses to secure contracts in the U.S,” said Mark Agnew, the Chamber’s senior director of international policy, in a press release.

But some of that concern, at least locally, is a bit overblown, says the president of the London Chamber of Commerce, Gerry Macartney.

“There’s some concern, although I don’t think it’s as dramatic as some people are portraying it,” Macartney told London Inc.

While the rhetoric coming from the White House has suggested that they will be stingy with exemptions from this order, “I think over time, wiser heads will prevail,” he adds.

At issue, essentially, is the apparent contradiction between two different messages coming out of the White House: on the one hand, that the Buy American order is not meant to target Canada ― a recognition of the unique trading relationship and intertwined economies; on the other, that exemptions from this policy are going to be tightly restricted, leaving Canadian firms unable to secure the exemptions that had been granted under previous Buy American orders (Obama issued a similar order in 2010, from which Canada was granted significant exemptions).

Macartney notes that for London, the defence sector supply chain (of which 205 companies around London are involved in some way or another) is excluded, leaving that sector of the economy “relatively safe,” he says.

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“I think the main concern is that Biden, for the sake of reversing any of Trump’s decisions, starts reversing things,” Macartney says, though it’s decidedly unlikely that anything major, like a reversal of USMCA, would be coming down the pike. Biden, Macartney observes, “gets good advice and listens to good advice.

“What most manufacturers are telling me is it couldn’t be any zanier than under the Trump administration,” Macartney continues. Many businesses were finding themselves waiting for the next change to be made on a whim, having to react to each one. “Biden seems to be the kind of leader that will not do that.”

Macartney advises local manufacturing firms to take a wait-and-see approach to these new orders, with the assumption that Canada will be able to secure similar waivers to those under Obama. In the end, he says, Canadian firms are in a better position than they might feel. “Predictability is what manufacturers need and count on the most,” he says.

“I think we’re in a pretty good position. Our supply chain is strong,” he says. “Biden’s surrounded by some pretty smart people.” Kieran Delamont