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Buy America and Buy American: Can Canada Expect a Deal from the Biden Administration?

Published online by Cambridge University Press:  08 December 2022

GENEVIÈVE DUFOUR  and
PIERRE-LUC MORIN
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Abstract

After US President Joe Biden took office, some believed he would take a different path from that of his predecessor and that the Trump years were over. However, one of President Biden’s first moves was to strengthen American protectionism by heightening the United States’s “Buy America” and “Buy American” requirements. With this, the American government procurement market started to close off even more, and Canadian suppliers, in turn, grew worried. Given the United States’s international procurement commitments and the specificity of the Buy American Act and the Buy America Policy, this article explores the pathways to favourable treatment of Canadian suppliers in keeping with applicable international trade rules.

Résumé

Résumé

Après la prise de fonction du président américain Joe Biden, certains pensaient qu’il prendrait une voie différente de celle de son prédécesseur et que les années Trump étaient terminées. Cependant, l’un des premiers gestes du président Biden a été de renforcer le protectionnisme américain en augmentant les exigences “Buy America” et “Buy American” des États-Unis. Ainsi, le marché public américain a commencé à se fermer encore plus et les fournisseurs canadiens se sont inquiétés à leur tour. Compte tenu des engagements internationaux des États-Unis en matière de marchés publics, et de la spécificité du Buy American Act et des dispositions de la politique Buy America, cet article explore les voies d’un traitement favorable des fournisseurs canadiens dans le respect des règles du commerce international.

Keywords

Agreement on Government ProcurementBuy America PolicyBuy American ActCanada-United States relationsCanada-United States-Mexico Agreementgovernment procurementinternational trade lawWorld Trade OrganizationAccord Canada–Étas-Unis–MexiqueAccord sur les marchés publicsBuy American Actdroit du commerce internationalmarchés publicsOrganisation mondiale du commercepolitique Buy Americarelations Canada–Étas-Unis
Type
Notes and Comments / Notes et commentaires
Information
Canadian Yearbook of International Law/Annuaire canadien de droit international , Volume 59 , November 2022 , pp. 385 - 400
Copyright
© The Canadian Yearbook of International Law/Annuaire canadien de droit international 2022

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References

1 United States, White House Briefing Room, “Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers” (2021), online: White House <www.whitehouse.gov/briefing-room/presidential-actions/2021/01/25/executive-order-on-ensuring-the-future-is-made-in-all-of-america-by-all-of-americas-workers/> [“Executive Order”].

2 Ibid, s 2; United States, Department of Transportation, “Buy America Fact Sheet” (2020), online: <https://www.transit.dot.gov/funding/grants/buy-america-fact-sheet>; United States, White House Briefing Room, “How Build America, Buy America Guidance Strengthens Made In America Requirements,” Blogs (2022), online: White House <www.whitehouse.gov/omb/briefing-room/2022/04/20/how-build-america-buy-america-guidance-strengthens-made-in-america-requirements/>; Buy American Act of 1933, 41 USC §§ 8301–8303 [Buy American Act].

3 “Executive Order,” supra note 1, s 4.

4 Lopez, Fernando Mendoza & Hersch, Joni, “Socioeconomic Policies in Public Procurement: What Should We Be Asking of Public Procurement Systems?” (2021) 52:1 U Mem L Rev 155 at 173–75Google Scholar. See also Timothy Meyer, “The Political Economy of WTO Exceptions” (2022) 99:4 Wash UL Rev 1299.

5 “Joe Biden renforce le protectionnisme américain avec la Buy American Act” (25 January 2021), online: Radio-Canada <ici.radio-canada.ca/nouvelle/1765622/etats-unis-canada-protectionnisme-biden-buy-american>. Concerning domestic annual procurement, see Klingler, Desiree U, “Fair Pay and Safe Workplaces in Government Contracting: Reassessing Labor Law Benefits in Light of Infrastructure Investments and Buy American” (2021) 39 JREG Bull 69 at 72 Google Scholar.

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7 United States, White House Briefing Room, “Fact Sheet: The American Jobs Plan,” Statements and Releases (2021), online: White House <www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/>.

8 House of Commons, “Buy America” Procurement Policies: An Interim Report (June 2021) (Chair: Raj Saini), online: <www.ourcommons.ca/Content/Committee/432/CAAM/Reports/RP11424292/caamrp02/caamrp02-e.pdf>. Concerning “Buy American” provisions costing more for Americans, see Eric Boehm, “Americans Overpay for Biden’s ‘Buy American’ Plan” (2022) 53:1 Reason 14.

9 House of Commons, supra note 8 at 8.

10 Organisation for Economic Co-operation and Development (OECD), SMEs in Public Procurement: Practices and Strategies for Shared Benefits (Paris: OECD Publishing, 2018) at 30 Google Scholar.

11 House of Commons, supra note 8 at 10.

12 Agreement on Government Procurement, 15 April 1994, 1915 UNTS 103 (entered into force 1 January 1996).

13 Ibid, as amended by the Protocol Amending the Agreement on Government Procurement, 30 March 2012, 3003 UNTS 49 (entered into force 6 April 2014) [GPA].

14 “Agreement on Government Procurement,” online: WTO <www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm>.

15 GPA, supra note 13, art II(4).

16 Central entities refer to federal departments and agencies, and sub-central entities refer to departments and agencies at the state or provincial levels. See “Government Procurement Agreement Appendix 1: Coverage Schedules,” Canada, Annex 1 and 2, online: WTO <www.wto.org/english/tratop_e/gproc_e/gp_app_agree_e.htm> [“Coverage Schedules”].

17 Ibid, United States, Annex 1 and 2. Here is the list of US states subject to the GPA: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, Wisconsin, and Wyoming.

18 Ibid, United States, Annex 1 and 2.

19 Federal Acquisition Regulation, 48 CFR §§ 2.101, 19.502-2. See also “The Buy American Act and Buy America Requirements” (last modified 2 March 2021), online: Government of Canada <www.tradecommissioner.gc.ca/sell2usgov-vendreaugouvusa/procurement-marches/buyamerica.aspx?lang=eng>.

20 “Buy American Act and Buy America Requirements,” supra note 19.

21 “Coverage Schedules,” supra note 16, United States, Annex 1 and 2.

22 GPA, supra note 13, art IV(1).

23 Ibid.

24 Ibid, art II(4).

25 “Coverage Schedules,” supra note 16, United States.

26 General Agreement on Tariffs and Trade 1994, Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization, 15 April 1994, 1869 UNTS 426, arts XVII, XXIV (entered into force 1 January 1995) [GATT 1994].

27 Buy American Act, supra note 2.

28 See especially Buy America Act of 1983, 41 USC § 5323.

29 Federal Acquisition Regulation, supra note 19, § 25.101.

30 Ibid.

31 “Buy American Act and Buy America Requirements,” supra note 19.

32 Buy American Act, supra note 2, §§ 8301–8303. See also John R Luckey, “Domestic Content Legislation: The Buy American Act and Complementary Little Buy American Provisions” (2012) at 2, online: Congressional Research Service <ecommons.cornell.edu/bitstream/handle/1813/77726/CRS_Domestic_Content_Legislation.pdf?sequence=1&isAllowed=y>.

33 Buy American Act, supra note 2, § 1902.

34 See e.g. ibid, § 8302. Generally referred to as “public interest,” “unreasonable cost,” and “non-availability” exemptions.

35 “Buy American Act and Buy America Requirements,” supra note 19. See e.g. Texas Government Code, 10 TGC § 2252.

36 “Buy American Act and Buy America Requirements,” supra note 19.

37 Ibid. See also Conway, Danielle M, “Emerging Trends in International, Federal, and State and Local Government Procurement in an Era of Global Economic Stimulus Funding” (2009) 32:1 U Haw L Rev 29Google Scholar; European Commission, “Trade Barriers: Procurement: Buy American” (last modified 14 January 2022), online: <trade.ec.europa.eu/access-to-markets/en/barriers/details?isSps=false&barrier_id=11190>.

38 “Buy American Act and Buy America Requirements,” supra note 19.

39 President Biden’s Executive Order aimed, among other things, to complicate the process for obtaining waivers, increase reliance on domestic suppliers, as well as reduce the need for foreign suppliers, therefore limiting the possibility for exemptions. See United States, Executive Office of the President, “Memorandum for Heads of Executive Departments and Agencies” (2021), online: White House <www.whitehouse.gov/wp-content/uploads/2021/06/M-21-26.pdf>.

40 House of Commons, supra note 8 at 3.

41 Agreement between Canada, the United States of America, and the United Mexican States, 30 November 2018 (entered into force 1 July 2020), online: <www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cusma-aceum/text-texte/toc-tdm.aspx?lang=eng> [CUSMA].

42 “Coverage Schedules,” supra note 16, United States.

43 Buy American Act, supra note 2, § 1902.

44 “Coverage Schedules,” supra note 16, United States, Annex 1.

45 Trade Agreements Act, 19 USC § 2511(a); Federal Acquisition Regulation, supra note 19, §§ 25.404–25.405.

46 Federal Acquisition Regulation, supra note 19, § 25.003.

47 Trade Agreements Act, supra note 45, § 2511; Federal Acquisition Regulation, supra note 19, § 25.402.

48 Federal Acquisition Regulation, supra note 19, § 25.402.

49 Rachel F Fefer & Ian F Fergusson, “Trade Implications of the President’s Buy American Executive Order” (2 May 2017), online: Federation of American Scientists <sgp.fas.org/crs/misc/IN10697.pdf>, citing United States, Government Accountability Office, “Government Procurement: United States Reported Opening More Opportunities to Foreign Firms Than Other Countries, but Better Data Are Needed” (2017), online: <www.gao.gov/products/gao-17-168>.

50 See e.g. Texas Government Code, supra note 35, § 2252.907 (in which the threshold is set at US $1 million).

51 “Coverage Schedules,” supra note 16, United States, Annex 1 and 2.

52 See e.g. ibid, United States, Annex 2, n 1 and n 5; Annex 3, n 5; Annex 7 at para 1.

53 Ibid, United States, Annex 7 at para 1.

54 Ibid, United States, Annex 2, n 1.

55 “State and Local Expenditures,” supra note 6.

56 Different courts may have jurisdiction. For example, at the federal level, the US Court of Federal Claims has jurisdiction over government contracts and bid protests. See United States, Office of the United States Trade Representative, “Additional Information on U.S. Procurement,” online: <ustr.gov/issue-areas/government-procurement/additional-information-on-US-Procurement>.

57 North American Free Trade Agreement Between the Government of Canada, the Government of Mexico and the Government of the United States, 17 December 1992, Can TS 1994 No 2, (1993) 32 ILM 289, ch 10 (entered into force 1 January 1994) [NAFTA].

58 Belley, Nathalie, “Les marchés publics: étude des obligations internationales du Canada, du GATT à l’ALENA” (1995) 36:2 C de D 503 at 531–32Google Scholar.

59 CUSMA, supra note 41, art 13.2(3).

60 United States, Office of the United States Trade Representative, “Summary of Objectives for the NAFTA Renegotiation” (17 July 2017) at 15, online: <ustr.gov/sites/default/files/files/Press/Releases/NAFTAObjectives.pdf>.

61 Hamilton, Sandra G, “Public Procurement: Price-taker or Market-shaper” (2022) 18:4 Critical Perspectives Intl Bus 574 at 581CrossRefGoogle Scholar.

62 GPA, supra note 13, art IV(1).

63 GATT 1994, supra note 26, arts XVII, XXIV.

64 Government of Canada, “Canada – U.S. Agreement on Government Procurement” (last modified 25 January 2017), online: <www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/other-autre/us-eu.aspx?lang=eng&_ga=2.125469194.18695084.1657034480-1844916328.1657034480>.

65 NAFTA, supra note 57.

66 House of Commons, supra note 8 at 11.

67 GPA, supra note 13, art II(3).

68 “Coverage Schedules,” supra note 16, United States.

69 GPA, supra note 13, art II(1) [emphasis added].

70 GATT 1994, supra note 26, art I.

71 For example, European Union member states and China suffer from American protectionist policies. See European Commission, supra note 37; Nicole A Salisbury, “Informed Compliance? How the CPB’s Rules of Origin Determinations Impact Foreign Importers” (2021) 30 Fed Cir BJ 267 at 268–69.

72 Stéphane Parent, “Politique ‘Buy American’ de Biden: exemption pour le secteur vert canadien?” (4 March 2021), online: Radio Canada International <www.rcinet.ca/fr/2021/03/04/politique-buy-american-de-biden-exemption-pour-le-secteur-vert-canadien/>.

73 GATT 1994, supra note 26, art XXIV.

74 United States, Government Accountability Office, “Buy American Act: Actions Needed to Improve Exception and Waiver Reporting and Selected Agency Guidance” (2018) at 25–27, online: <www.gao.gov/assets/gao-19-17.pdf>.

75 United States, White House Briefing Room, “One Year Anniversary of the Made in America Office” (2022), online: White House <www.whitehouse.gov/omb/briefing-room/2022/01/25/one-year-anniversary-of-the-made-in-america-office/>.

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80 Mona Paulsen, “Friend-shoring” (21 April 2022), online: International Economic Law and Policy <ielp.worldtradelaw.net/2022/04/friend-shoring.html>.

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82 In this regard, see the opinion of Simon Lester on the possibility of bringing a non-violation complaint to the Dispute Settlement Body under Article XX (2)(b) of the GPA, supra note 13. Simon Lester, “Can the Biden Administration’s Push for More ‘Made in America’ Be Challenged under the GPA?” (27 October 2021), online: International Economic Law and Policy <ielp.worldtradelaw.net/2021/10/can-the-biden-administrations-push-for-more-made-in-america-be-challenged-under-the-gpa-1.html>.

83 “Members Continue Push to Commence Appellate Body Appointment Process” (28 March 2022), online: WTO <www.wto.org/english/news_e/news22_e/dsb_28mar22_e.htm>.

84 Government of Canada, Global Affairs, “Consultations on Reciprocal Procurement Policies in Canada” (last modified 28 June 2022), online: <www.international.gc.ca/trade-commerce/consultations/RP-AR/index.aspx?lang=eng>.

85 Council of the European Union, Press Release, “International Procurement Instrument: Council Gives Green Light to New Rules Promoting Reciprocity” (17 June 2022), online: <www.consilium.europa.eu/en/press/press-releases/2022/06/17/international-procurement-instrument-council-gives-final-go-ahead-to-new-rules-boosting-reciprocity/>.

86 Jean Heilman Grier, “EU Adopts Procurement Reciprocity Regulation” (13 July 2022), online: Perspectives on Trade <trade.djaghe.com/?p=7371>.