Canada Offers Trade Promises to U.S. in Exchange for Buy American Waiver

(Campbell Clark — Globe & Mail)

Ottawa, provinces offer ‘time-limited' proposal that would give American firms ‘guaranteed access' to contracts

The Canadian government has offered the U.S. guaranteed access to the provinces’ public purchases in exchange for a quick waiver of Buy American provisions that have frozen Canadian companies out of lucrative American stimulus-spending contracts.

In a letter to U.S. Trade Representative Ron Kirk, Canadian trade minister Stockwell Day said such a deal would address Canada’s immediate concerns about Buy American, and could serve as a prelude to a permanent deal that would open cross-border access to provincial, state, and city contracts.

The letter, dated Thursday and obtained by The Globe and Mail, refers to a proposal that Canada submitted at the same time, after lengthy talks with the provinces.

“Through this proposal, Canada is offering time-limited guarantees to an ambitious package of sub-federal procurement in an exchange for a waiver from the “Buy American” requirements in the Recovery Act and any similar requirements in new federal U.S. legislation.

The U.S. Recovery Act, the $860-billion stimulus package pass early this year, sends about $260-billion to state and local governments in the U.S. for spending projects, but requires that all steel and manufactured goods be U.S. made. Similar provisions are included in several bills winding through the U.S. Congress.

The U.S. has down played the impact, even Canadian companies say they have been frozen out of lucrative contracts. But earlier this month, U.S. President Barack Obama brushed off the concerns.

“I do think it’s important to keep this in perspective. This in no way has endangered the billions of dollars of trade taking place between our two countries,” Mr. Obama said as he, Prime Minister Stephen Harper and Mexican President Felipe Calderon wrapped up their so-called Three Amigos summit.

“I want to assure you your Prime Minister raises this with me every time we see each other,” he had said. “[But] I think it’s also important to keep it in perspective, that in fact we have not seen some sweeping steps toward protectionism,” he said.

Spending by states, provinces, and cities is not covered by the NAFTA – Canadian provinces wanted it left out when the trade pact was signed – but Canadian provinces have agreed to negotiate some guarantees in exchange for a Canadian exception to buy American.

“This offer is ambitious in its coverage of all Canadian provinces, territories and major municipalities as well as coverage comparable to that under NAFTA for all goods and services, including construction services,” Mr. Day wrote in the letter. Read more here.