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Big business calls for new FTA on government procurement

The Canadian Press reports that, “Canada and the United States need to negotiate a new free-trade agreement on government procurement to head off a trade war over the Buy American issue, business leaders said Monday. …The groups, which include the Canadian Manufacturers and Exporters, the Canadian Chamber of Commerce and the Canadian Council of Chief Executives, say the solution is an open market in government procurement, particularly at the municipal and provincial-state levels currently not covered by the North American Free Trade Agreement. …The issue was on the agenda at a meeting of federal and provincial trade officials in Yellowknife on Monday.”

The Canadian Press also reports that, “The business organizations …have written to the 10 premiers urging them to get involved in negotiations with Washington. They say the premiers should join Ottawa in seeking a reciprocal agreement with the U.S. that would ensures federal money spent at the local level of government remains subject to free trade agreements.”

The letter from the business organizations to the provincial premiers states, “The United States Government has said that it will comply with its international trade obligations, but this offers no protection for Canadian companies since our provinces and municipalities are not party to the NAFTA or WTO government procurement agreements. …One possible short-term solution would be for both Canada and the United States to make every effort (including the use of regulatory guidance) to ensure that federal procurement standards under the NAFTA are applied to federal funds spent by sub-national authorities.  Another possible option would be to encourage the United States Government to issue a public interest waiver on a sectoral basis (e.g., in the water infrastructure sector). …However, it is clear that the most effective response to the Buy American provisions would be for Canada to seek a more open procurement agreement.  We urge you to explore signing onto the reciprocal WTO Agreement on Government Procurement and to pursue an even more ambitious agreement with the United States covering provincial/state/territorial and local governments.”

The Canadian Press reports are at http://www.google.com/hostednews/canadianpress/article/ALeqM5j_UmEZPYJnsyMVoZMlvLlklZnpwQ and http://www.thestar.com/news/canada/article/643631.

The letter from business leaders is at http://www.ceocouncil.ca/en/view/?area_id=1&document_id=1352.