Canada fights back in Buy America feud : Foreign Extraterritorial Measures Act

Canada fights back in Buy America feud BARRIE McKENNA OTTAWA — The Globe and Mail Published Monday, Jan. 19 2015, 12:28 PM EST Last updated Monday, Jan. 19 2015, 7:03 PM EST ** The Canadian government signed an order on Monday under the Foreign Extraterritorial Measures Act, barring companies from complying with the requirement that only U.S. steel be used on the project in Prince Rupert, British Columbia, Trade Minister Ed Fast said. (http://bit.ly/1CdpYmV) Ottawa has invoked a rarely used anti-sanctions law after Alaska refused to void Buy America purchasing rules in the rebuilding of a B.C. ferry terminal. The Canadian government signed an order Monday under the Foreign Extraterritorial Measures Act, barring companies from complying with the requirement that only U.S. steel be used on the project in Prince Rupert, B.C., Trade Minister Ed Fast said. More Related to this Story • Steel industry calls for Canadian content in Champlain Bridge project • Canada, U.S. keep talking in Buy America standoff • Canada’s Trade Minister ‘disappointed’ by passage of Buy American bill “We have been clear: the application of protectionist Buy America provisions on Canadian soil is unacceptable and an affront to Canadian sovereignty,” Mr. Fast said in a statement. Nonetheless, he added that Ottawa would continue to try to convince the U.S. government to waive the Buy America restrictions. “We are prepared to exercise this order to defend Canadian interests,” he added. “Buy America provisions deny both countries’ companies and communities the clear benefits that arise from our integrated supply chain and our commitment to freer and more open trade. We call upon our American friends to join with us to end the harm such policies are doing within our shared North American economy.” In spite of weeks of high-level talks to reach a compromise, Alaska Governor Bill Walker told Canadian officials over the weekend that he won’t seek a waiver of the purchasing rules. The state of Alaska, which runs the Alaska Marine Highway System, is now slated to close bids on the project Jan. 21 and then award a final contract. The Foreign Extraterritorial Measures Act, a federal anti-sanctions law, has been used only once, in 1992, to counter the U.S. trade embargo on Cuba. The law gives the federal Attorney General the power to issue orders, making it illegal for bidders on the project to comply with the Buy America rules. Canadian officials, including Ambassador to Washington Gary Doer, had urged the U.S. and Alaska to waive the rules or delay the project. But those efforts proved fruitless. U.S.-only purchasing rules, mandated by Congress, continue to be politically seductive, and very difficult for U.S. politicians and officials to publicly oppose. The catch this time is that the Alaska ferry project, funded mainly by the U.S. government, seeks to apply those rules in Canada, on land owned by the Canadian government. The port of Prince Rupert, located nearly 800 kilometres north of Vancouver near the southern tip of the Alaska Panhandle, sits on Canadian Crown land. But it’s leased back to the local port authority, which recently sublet the ferry terminal to the Alaska Marine Highway System under a 50-year lease that expires in 2063. Bidding documents posted on the Alaska Department of Transportation website make clear that “all iron and steel products associated with this project are subject to the Buy America provisions.” The $10-million to $20-million (U.S.) terminal and wharf project, is slated to be completed in 2016.