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Canada-US procurement deal said to be reached

The CBC is reporting this afternoon that, “Canadian companies will get access to funding from U.S. economic stimulus projects in 37 U.S. states under a deal to circumvent the protectionist ‘Buy American’ clause…”

“The agreement applies only to U.S. funding delivered under the current stimulus program, not future legislation that might include ‘Buy American’-type provisions. The U.S. money is allocated for roads, public housing and other infrastructure projects, the drawback being that most of the money has already been spent. …The Canadian government is arguing the deal sets a precedent for future stimulus spending in the U.S. …In return, Canadian provinces are to sign on to a World Trade Organization general procurement agreement, which will give the U.S. and other countries access to projects underway in Canada with federal stimulus spending.”

The Toronto Star reports it as, “Sources said the agreement exempts Canadian firms from the protectionist measures on contracts funded from what hasn’t yet been spent from the $787 billion fund. And Canadian firms get a broader exemption from Buy America in the 37 U.S. states that are parties to the World Trade Agreement rules on procurement. In exchange, Canadian provincial and municipal governments will commit not to discriminate against U.S. firms when handing out contracts in this country.”

The Globe and Mail adds, “The agreement is to some extent symbolic, since many of the contracts associated with the American economic stimulus program have already been let. But the agreement sets several vitally important precedents.” The newspaper had reported on January 19 that, “As much as 40 per cent of the money from the American Recovery and Reinvestment Act has already been spent. By Feb. 17, what’s left will be committed and on its way out the door.”

The Globe and Mail highlights that, “The agreement will, Canadian officials hope, lead to more comprehensive talks on a continental government procurement agreement that would guarantee access to all markets for all government-awarded contracts. The provinces agreement to sign the WTO government procurement agreement will reduce a major obstacle to internal protectionism, in which provincial governments banned out-of-province firms from bidding on provincial and municipal contracts. The represents a major step toward a truly Canadian economic union.”

The newspaper adds, “And the increased openness of the provincial markets will promote negotiations with the European Union for a trade agreement. EU officials considered internal protectionism a major obstacle to an agreement.”

The CBC notes, “The breakthrough in negotiations between Washington and Ottawa might not be announced until tomorrow…”

We will be responding to this news shortly via a media release.

The CBC report is at http://www.cbc.ca/politics/story/2010/02/04/buy-american-deal-agreement.html.

The Globe and Mail report is at http://www.theglobeandmail.com/report-on-business/economy/canadian-companies-poised-to-win-exemption-from-buy-american/article1456109/.

The Toronto Star report is at http://www.thestar.com/news/canada/article/760518–ottawa-says-it-has-a-deal-on-buy-american?bn=1.