Trade Negotiators Push to Liberalize Public Procurement

(New York Times – Reuters)

Trading powers are in a final push to liberalize the market for purchases by public authorities worth hundreds of billions of dollars a year, and are seeking to lock China into the global procurement system as well.

The talks are separate to the World Trade Organization’s long-running Doha round to free up global trade, but could arguably have a much bigger impact on businesses.

Government procurement has moved center stage after the economic crisis put public infrastructure spending at the heart of economic stimulus packages. At the same time “Buy American” policies in the United States and similar measures in other countries have raised fears of protectionism in the sector.

And the huge infrastructure needs and projects of emerging economies have raised the prospect of lucrative new markets opening in an area so far dominated by rich nations. Diplomats at the WTO say a new government procurement agreement (GPA) or at least its outlines, could be concluded this year and talks to bring in new members have gathered pace.

“Our objective is to wrap up the revision as soon as possible and continue to work closely with China and others as they enter the process of accession,” Robert Kasper, a U.S. trade diplomat to the WTO, said at a forum last month. Read more here.

Busted! Houston Violates Buy American Provision, Gets in Bed with Spanish

(Alttransport)

After a four-month investigation, the Federal Transit Administration has ruled that the city of Houston knowingly and systematically violated the ‘Buy American’ provision of the Stimulus Bill, the American Reinvestment and Recovery Act of 2009, when it awarded two light rail procurement contracts to a Spanish firm Construcciones y Auxiliar de Ferrocarriles.

The Buy American Provision states that any construction, procurement or maintenance of transportation facilities undertaken with Stimulus Bill funds must be 100 percent American, down to the screws and nails.

In a hand-delivered letter to the newly-selected Houston Metro Board Chairman Gilbert Garcias and Acting President/CEO George Greanias, FTA Administrator Peter Rogof wrote:

“The results of the investigation are both alarming and disturbing. They reveal a series of systematic efforts through which Metro and CAF sought to bypass numerous federal rules. These rules are designed to ensure the integrity of procurements involving taxpayer funds and the requirement to use taxpayer funds in a manner to maximize the creation and sustainment of well-paying jobs here at home. The Administration will vigorously enforce these requirements, both now and in the future.” Read more here.

CETA and Government Procurement: What's In It for Canadians? – July 23, Toronto

I.E.Canada in partnership with Foreign Affairs and International Trade Canada (FAITC) and Bennett Jones LLP invite you to attend a roundtable discussion to hear the latest developments in the CETA negotiations following the current round of talks in July 2010.

Government Procurement is one of the remaining principle requirements the European Union is seeking in the Canada-EU Free Trade Agreement. Worth hundreds of billions of dollars annually, government procurement markets are an important aspect of international trade.

What are the implications for Canadian companies of opening Canada’s government procurement markets to European suppliers and what are the prospects of expanding access to European procurement markets for Canadian exporters? Come and join I.E.Canada and other industry stakeholders in a roundtable discussion regarding government procurement negotiations.

When: Friday, July 23, 2010
Where: Bennett Jones LLP, Suite 3400, 1 First Canadian Place, Toronto, Ontario
Time: 12:00-12:20 p.m. – Registration and Lunch
12:20-2:00 p.m. – Program

This is a complimentary invitation for interested parties with limited seating. Please click here to register. If you are unable to attend in person but would like to participate via teleconference, please contact Amesika Baëta, Committee Director at abaeta@iecanada.com.

DHS Issues Final Rule Covering Buy American Requirements for Textile & Apparel Products

(Textile World – James A. Morrissey)

The Department of Homeland Security (DHS) has issued its final rule covering Buy American requirements for its purchases of textile and apparel products under the American Recovery and Reinvestment Act of 2009. The agency adopted, without change, its interim rule issued last August 17, and in effect rejected a number of objections from textile manufacturers, organized labor and others.

DHS said it received comments from 26 organizations and individuals and members of Congress who suggested a number of changes, as they felt the interim rule did not carry out the full intent of the legislation. Commentators called for changes in the de minimis exceptions to the rule, the definition of national security interests and the listing of some of the trading partners with which the United States has preferential trade agreements; and they also called for the DHS to “mirror” the Berry Amendment, which covers textile and apparel purchases by the Department of Defense.

Read more here. The text of the final rule is available in the Federal Register for June 9, Vol.75, No.110/Rules and Regulations, here.

United States Infrastructure Report Q2 2010

(Business Monitor International)

News in the U.S. infrastructure sector over the past quarter has been dominated by public sector support for projects. In the transport sector the US$8bn high speed rail funding was allocated, and in the utilities sector, the Department of Energy handed out billions of dollars worth of loan guarantees. In contrast, the private sector has been fairly muted.

In BMI’s Q210 US Infrastructure Report we are forecasting growth to return to the construction sector following five years of decline. In 2010, we are forecasting the construction industry to grow by 2.4% year-on-year (y-o-y) in real terms, to reach a nominal value of US$519.6bn. This growth is notable; however, it must be taken into context of the 13.2% decline estimated for 2009. Growth will mainly be fuelled by the disbursement of funds from the US$787bn American Recovery and Reinvestment Act (ARRA).

Read more here. Download a free sample here.

New Bill Would Bar U.S. Federal Procurement of Chinese Goods Until China Joins GPA

(World Trade Interactive)

Sen. Debbie Stabenow, D-Mich., introduced June 17 the China Fair Trade Act of 2010 (S.3505), which would prohibit the federal government from purchasing goods and services from China until Beijing joins the World Trade Organization’s Government Procurement Agreement. The U.S. has been urging China to join the GPA since it became a WTO member in 2001, and at the most recent Strategic and Economic Dialogue meeting Chinese authorities said they would submit a revised accession offer by July.

A fact sheet from Stabenow’s office states that because the U.S. is a GPA member China has access to the estimated $1.7 trillion U.S. government procurement market, where it is able to sell products such as tires and office equipment. In contrast, China has developed an indigenous innovation program that “essentially prevents American companies from bidding on Chinese government contracts” and thus excludes them from a market worth nearly $500 billion. According to Stabenow, the U.S. will not be able to reach its goal of doubling U.S. exports over the next five years until China opens its procurement market by joining the GPA. Read more here.

Chinese Firm Bids for Montreal Metro Contract

(CBC News)

Chinese train company Zhuzhou Electric Locomotive Ltd. formally submitted a bid Monday for a large Montreal Metro subway car contract using steel wheels despite a bid requirement for rubber tires.

The company said its proposal valued at around $2 billion would create up to 1,000 local jobs.

Zhuzhou said its plan to use steel wheels rather than rubber tires would save taxpayers $1.5 billion and produce a smoother ride.

The Montreal transit authority has previously advised the firm that its plan to use steel wheels doesn’t meet its requirements and that it won’t change the product it has operate successfully for more than 40 years.

The Montreal Metro is Canada’s second-largest subway system with more than 71 kilometres of track. The Société de transport de Montreal said it wouldn’t comment ahead of the afternoon deadline for submissions. Read more here.