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Biden's 'Buy American' policy could hurt NY-Canada trade, diplomats say

Catherine Loubier, delegate general of Quebec in New

Catherine Loubier, delegate general of Quebec in New York, said protectionist measures "tend to drive prices up and reduce competition." Credit: James T. Madore

President Joe Biden’s initiative to increase the amount of U.S.-made goods and services purchased by the federal government could undermine trade between New York State and Canada, two diplomats said.

Biden’s Jan. 25 executive order tightening restrictions on U.S. government agencies who seek to buy foreign goods could usher in a protectionist era that hurts businesses on both sides of the border, said the diplomats from the Canadian provinces of Ontario and Quebec, which share the border with New York.

The order follows several measures by then-President Donald Trump, which Biden said were ineffective.

Trade between New York and Ontario totals more than $22 billion per year while Quebec’s exports to New York exceed $8 billion. Shipments of automobile parts, steel, aluminum, telecommunications equipment and medical products account for much of the cross-border commerce, according to government data.

About 700,000 jobs across the state are tied to U.S.-Canada trade, the data shows.

"These ‘Buy American’ policies do disrupt existing, long-standing cross-border supply chains" between Ontario and New York, said Ian Todd, Ontario’s representative in Washington.

But he said the province "has been working with a number of U.S. states" to boost orders from their governments. The first such agreement was reached on Dec. 17 with Maryland.

"These agreements will really secure improved access to investment and government procurement opportunities for businesses on both sides of the border," Todd said.

Catherine Loubier, delegate general of Quebec in New York, echoed Todd’s concern about the "Buy American" push by Biden.

"Protectionist measures are always bad news because [the U.S. and Canadian economies] are so integrated," she said. "They tend to drive prices up and reduce competition."

The diplomats spoke last week during a virtual event organized by the Maple Business Council, a business group that promotes U.S.-Canada trade and has Long Island members.

While Biden’s "Buy American" initiative was criticized by the diplomats, it has been praised by U.S. manufacturers, New York politicians and labor unions.

"Stronger domestic-content preference policies and a sizable new investment in infrastructure and clean energy will spur factory job creation and new investment in America," said Scott Paul, president of the manufacturers’ group, Alliance for American Manufacturing.

Sen. Kristen Gillibrand (D-N.Y.) said Biden’s executive order "signals the renewal of our federal government’s commitment to not just rebuilding, but reimagining the tools needed to beat this pandemic and recover stronger. From upstate manufacturing hubs to New York City, New Yorkers are ready to ramp up production of quality American-made products," she said.

Besides the "Buy American" order, the diplomats spoke about how businesses on Long Island and statewide can work with technology firms in Toronto and Montreal.

They also discussed the proposed 333-mile "electric cord" connecting New York City and its suburbs with Quebec’s giant hydroelectric dams. The electric cable would be laid in the St. Lawrence River, Lake Champlain and Hudson River. The project would create 2,000 jobs, they said.

The panel moderator, John Costanzo, president of LDK Logistics consultants in East Norwich, said exports to Canada are an important revenue source for many Long Island businesses. "Maintaining a strong U.S.-Canada relationship is important to many," said Costanzo, who also leads the Maple Business Council's activities in New York.

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