PM prepares to lobby U.S. Congress

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Prime Minister Stephen Harper will have only minutes to talk trade with U.S. President Barack Obama, but a set of unusual meetings with congressional leaders tomorrow matters more to Canada's attempts to turn back a wave of Buy American protectionism.

Canada has offered a deal that would guarantee American companies the right to bid on provincial and city contracts in return for a waiver from the Buy American provisions. The U.S. has named a trade negotiator to the file, but he needs direction from the White House.

Even if Mr. Harper can persuade Mr. Obama to nudge the issue out of the deep-freeze, it will need the political blessing of congressional powerbrokers like Senate majority leader Harry Reid and House Speaker Nancy Pelosi.

Canadian prime ministers troop to the White House every few years, but rarely lobby the congressional leadership who control matters key to Canada's interests - such as inserting Buy American clauses into stimulus-spending bills. Mr. Harper meets Mr. Obama for less than an hour Wednesday, but will hold two sessions Thursday with the top Democrats and Republicans in both the House and Senate.

"In the American system, particularly when it comes to issues of trade and protectionism, often our bigger challenges are in Congress, as opposed to the administration," Mr. Harper said in an interview with CTV News before he left for Washington.

"So far the administration has responded quite positively to our offers and our attempts to deal with this. But it may be the case that the administration alone can't deal with it. That's something we'll have to gauge on this trip."

In fact, getting Buy American on the agenda with the Obama administration has been, and remains, a tough sell. And at Wednesday's meeting, the details are unlikely to dominate a brief meeting on the global economy, financial regulation, major international issues, security, and climate change.

Mr. Obama has played down the impact of Buy American, a measure pushed by congressional Democrats. At the same time, his administration has just risked sparking a trade war by slapping big tariffs on Chinese tires, arguing Beijing has violated trade deals.

Mr. Harper says the U.S. can't rail against protectionism elsewhere if it won't fix Canada's Buy American problem. "The United States, in particular, cannot be a credible voice for keeping trade flows going if it can't deal with trade irritants with it's single best trading partner," Mr. Harper said.

The Buy American sections of the American Recovery and Reconstruction Act - the U.S. stimulus law - send about $260-billion to states and cities on the condition that all steel and manufactured goods bought with the money be American-made. Similar measures are in several other bills now before the Congress.

Existing trade agreements, like NAFTA, don't cover state and city spending, so Canada has offered to guarantee access for American companies to provincial and city contracts, as long as the U.S. gives Canada a quick waiver from Buy American. And over the longer term, Canada wants the U.S. to negotiate a formal trade deal that covers such local spending.

So far, U.S. trade representative Ron Kirk has not said if he likes the idea, but he has named a negotiator, Everett Eissenstat.

Others indicate Mr. Kirk is now waiting for directions from the White House - and Mr. Obama is not likely to negotiate a waiver to Buy American without the backing of congressional Democrats who created them.

"It's a crucial time for the Prime Minister to visit," said Jayson Myers, president of Canadian Manufacturers and Exporters.

Mr. Harper must call on the U.S. to lead against protectionism, and warn that if the U.S. rejects Canada's offer, American companies could face retaliation from Canadian cities that could shut them out of contracts, Mr. Myers said. And he has to take that message not just to the President, but to Congress.

"It's clear that the White House is very, very sensitive to what the Congress is saying," he said, noting that Mr. Obama's big battle now is steering health-care reforms through Congress. "I don't think we want our Buy American concerns to threaten to become a divisive issue among the Democratic members of Congress."