U.S.-Canada Supply Chains
In May 2016, the trade research and advocacy firm, Trade Partnership Worldwide, LLC released a new study (PDF) exploring the impact of U.S. and Canadian supply chains on the U.S. economy. The study was commissioned by the Embassy of Canada in Washington D.C. Simply, a supply chain facilitates the multi-stage processing of raw materials, parts or inputs (from both countries) to product completion at facilities located in the supply chain. The fully-assembled product is then sold in either country or exported to a third. Supply chains enable companies to adapt to quickly changing production demands and technical innovations. The study’s authors interviewed a number of U.S. businesses who explain how local content policies, such as Buy America, can inadvertently harm some U.S. companies, workers and publicly-funded projects because these policies ignore the benefits of integrated supply chains bring on both sides of the border.
Findings of the study:
- Nearly 9 million U.S. jobs depend on trade and investment with Canada
- Canadian content supports U.S. manufacturing and exports. 78% of U.S. imports from Canada are raw materials, parts and components and services that are used to make goods and services in the United States.
- Buy America policies can have an adverse impact on U.S. companies, workers and infrastructure projects.
- Up to 70,000 U.S. jobs are associated with U.S.-Canada supply chains in sectors affected by Buy America rules.
The study concludes that the integrated network of cross-border supply chains is well-established and benefits both countries by promoting productivity and contributing to U.S. and Canadian competitiveness in the world.
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