Dear Governor Cuomo, Senators, and Assembly Members:
I’m writing on behalf of members of the Council of the Great Lakes Region (CGLR) to express our strong reservations with New York’s Buy American budget proposal concerning restrictions on the procurement of goods and services, and the significant impact these provisions could have on the long history of cross-border trade and investment between the state of New York and the provinces of Ontario and Quebec.
The United States (U.S.) and Canada share a robust economic partnership. To illustrate just how connected the economies of the two countries are, in 2015, bilateral trade reached USD$671 billion, representing almost USD$2 billion worth of goods and services crossing the border every day. What’s more, of the 50 U.S. states, 48 of them count Canada as their first, second or third most important export market. Moreover, the U.S. is the single greatest investor in Canada, and Canada is the third largest source of foreign direct investment in the U.S. All told, countless numbers of jobs in Canada, and nearly 9 million U.S. jobs depend on this partnership.
The economy of the Great Lakes – St. Lawrence Region, covering eight Great Lakes states, including New York, and the Canadian provinces of Ontario and Quebec, is the central driver of U.S. and Canadian competitiveness and job growth. With economic output in 2015 worth USD$5.8 trillion, the region accounted for 30% of combined U.S. and Canadian economic activity and 31% of employment or 51 million jobs. The region’s economy is so big that if it were a country, it would represent the third largest economy in the world behind only the U.S. and China. In short, the success of each state and province in this region, which do more trade with each other than with any other country in the world, is vital to our long-term prosperity. We are part of a common market.
Within this context, New York and Canada, especially Ontario and Quebec, are fully integrated across a multitude of goods and services sectors – minerals and metals, energy, telecommunications, insurance, banking, agriculture, equipment and machinery, forest products and chemicals – and within numerous supply networks and value chains. As a result, bilateral goods trade between New York and Canada was valued at USD$30.3 billion in 2016, which when combined with two-way investment, supports 680,900 jobs in New York. Moreover, over 700 Canadian-owned companies operate in the state, employing 72,750 New Yorkers, while Canadian pension funds, insurers and asset managers like Ivanhoe Cambridge Inc., Oxford Properties Group Inc., Brookfield Property Partners are top investors in some of the state’s largest economic development projects (e.g. the Hudson Yards redevelopment in Manhattan).
Against this backdrop, the Council feels strongly that the success of the shared economy of the Great Lakes – St. Lawrence Region has been aided significantly by the similar banking, tax, investment and legal structures in place on both sides of the U.S – Canada border, as well as the common procurement rules that exist under the World Trade Organization’s (WTO) Agreement on Government Procurement (GPA), which provide generous and guaranteed access to each other’s procurement markets at the sub-national and national level.
Therefore, while we understand and appreciate the desire to support communities, companies and employees throughout New York, we believe making Buy American provisions mandatory for all New York procurements over $100,000 runs counter to the liberalized approach to trade and investment that has made the region the robust marketplace it is today. In addition, the proposal, which would create uneven procurement rules with neighboring jurisdictions, including Ontario and Quebec, would invite unnecessary trade challenges or counter-measures by trade partners like Canada. Finally, the proposal could introduce more red tape and uncertainty in the marketplace, cool foreign investment in the state, weaken market competition, and unwind vital cross-border trade and investment relationships between New York, Ontario and Quebec.
In closing, as you prepare to deliberate on authorizing and appropriating resources to support the state’s budget, the Council and its members urge you to reconsider the Buy American proposal. If enacted, we believe it will seriously and negatively impact the business environment in the region and the special and privileged economic relationship that exists between New York and Canada, and particularly with Ontario and Quebec.
The Council is a non-partisan, non-profit, bi-national organization committed to deepening the United States-Canada relationship in the Great Lakes-St. Lawrence Region, defined by the border states of New York, Pennsylvania, Illinois, Michigan, Minnesota, Ohio, Wisconsin and Indiana and the provinces of Ontario and Quebec. The goal of the Council is to create a stronger, more dynamic culture of collaboration in harnessing the Region’s economic strengths while enhancing the well-being of its citizens and protecting the environment for future generations.
Sincerely,
Mark Fisher
President and CEO
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