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Divergent views on “Buy American” deal with US, but trade committee fails to demand prior consultation in future

Parliament’s trade committee has just released a report of its findings on the new Buy American deal — the Canada-US Agreement on Government Procurement (CUSAGP), which went into effect in February this year. The report recognizes how controversial the deal was but makes no recommendation that in future the committee, Canada’s cities, labour or the general public should be consulted beforehand. And while the committee does not recognize, as many witnesses did, that spending public money locally can be an effective way to create good, sustainable jobs, its final recommendations do ask the federal government to find a way to collect information on which Canadian provincial and municipal contracts go to foreign versus national companies.

It’s clear from the evidence presented to the committee by supporters and opponents of the Buy American deal that had there been more consultation, the deal might not have seen the light of day, at least not in its final form. For example, Carl Grenier suggested that the AGP was “the second-worst agreement Canada has even signed,” while trade lawyer and Council of Canadians board member Steven Shrybman called it “egregiously one-sided.” The report states:

the Committee did hear criticisms about the way in which Canada approached these negotiations. In particular, several witnesses expressed their concerns about the lack of consultations leading up to, and during, formal negotiations with the US.

Wayne Peppard, executive director of the British Columbia and Yukon Territory Building and Construction Trades Council, told the trade committee he was unaware of any consultations with labour groups or worker representatives in his industry before the agreement was signed:

I can only hope that workers’ concerns will be given full consideration should there be an expansion to the commitments with regard to any permanent agreements with any nation for government procurement.

Michael Buda, in the Federation of Canadian Municipalities’ policy division, “suggested that the municipalities were not consulted during the initial discussions between the federal government and the provinces and territories,” and he stated “that experts in municipal procurement should have been consulted in a deal that includes municipal procurement,” according to the report.

Grenier also argued that because Canada was the only country that truly wanted an agreement on procurement, “it was in a naturally poor negotiating position from the outset.” He said negotiating a deal like this from a point of weakness will never work:

Canada approached the United States, basically telling them, “We needed a deal at any cost.” If you say that to anyone, you’ll get one. We did get one, and that cost is high.

But this is the perpetual Canadian position — scrambling for free trade deals just so it can put another notch in the bedpost, so to speak. It’s Harper’s same position with respect to the European Union and negotiations toward a Comprehensive Economic and Trade Agreement that the EU simply does not need and will drag out until Canadian negotiators cave in, which they always do.

The trade committee recommendations on the Canada-US procurement agreement are as follows:

Recommendation 1:
That the Department of Foreign Affairs and International Trade put concrete measures in place and take the actions necessary to ensure that the rights of Canadian entrepreneurs seeking public procurement contracts in the United States are respected by US authorities.

Recommendation 2:
That the Department of Foreign Affairs and International Trade (DFAIT) set up a mechanism to collect economic data regarding the application of the Canada-US Agreement on Government Procurement, and thus
enable it to assess the agreement’s impacts on enterprises and employees in Canada. DFAIT should submit a report on this issue to the Committee.

Recommendation 3:
That the Government of Canada take the steps necessary to monitor the impact of the Canada-US Agreement on Government Procurement (AGP) on employment in Canada, as well as on Canadian businesses and communities. Information should be collected that allows the Government of Canada to determine: the value of US public procurement contracts that Canadian businesses are accessing as a result of the AGP; the value of Canadian public procurement contracts US firms are accessing; and how many jobs are being created or lost as a result. This monitoring process should include the collection of critical quantitative and qualitative information to enable an effective impact analysis of the AGP on government procurement markets in Canada and the US, which Canadian negotiators and officials from the Department of Foreign Affairs and International Trade were unable to provide to the committee. The data collected, and any impact
assessment reports which result, should be made available to the Committee.

Recommendation 4:
That the Government of Canada establish a process for an ongoing exchange of information with provinces, municipalities and representatives of key business and labour sectors with the aim of assessing the net impact of federal, provincial and municipal government procurement on domestic job creation and the Canadian economy. This information should be made available to the Committee.

Recommendation 5:
That the Government of Canada seek exemptions from Buy American provisions in steel and other highly integrated sectors of the Canadian and US economies.

To read the full report: http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4416059&Language=E&Mode=1&Parl=40&Ses=3. Click on Print Version at the top right.