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Trade teams talk procurement with US, European Union

The Globe and Mail reports that, “Trade negotiators from both countries (Canada and the United States) are expected to grapple with the issue (of procurement) in the next few weeks. Canadian officials travelling with the Prime Minister (in Washington) said they hoped for a deal by the end of the year, although they acknowledged that much of the (US) stimulus package will be spent by then.”

The transcript of remarks by Obama and Harper at their media conference yesterday includes Obama saying, “Our teams have been working together. It appears that there may be ways to deal with this bilaterally, but also potentially multilaterally. The provincial governments in Canada, my understanding is, are not signatories to the WTO government procurement agreements that would have preempted any of these ‘Buy America’ agreements. That might be one solution. But in addition, we’re pursuing, on a bilateral track, efforts to make sure that these sources of tension diminish.”

That said, the Globe and Mail reports that President Barck Obama believes “that despite Canadian anger over Buy American, its actual impact is minor when compared with the nearly $2-billion-a-day two-way trade.”

At their meeting in Washington yesterday, “Mr. Harper…echoed the President’s assessment. The problems caused by Buy American are ‘relatively small compared to the overall scale of Canadian-American trade,’ he conceded, but kept up the pressure on the President for a fix. ‘These are important irritants; they are having some real impacts,’ Mr. Harper said.”

The newspaper also reports that, “Mr. Harper …will today visit congressional leaders on Capitol Hill – where there is (also) little inclination and no domestic political reward for stripping out Buy American requirements…”

Globe and Mail
columnist Jeffrey Simpson notes, “Buy American is not only a low priority for Mr. Obama, but it also formed part of his stimulus package that emerged from Congress. He is most certainly not going to use any of his precious political capital on Capitol Hill – capital he needs for big issues such as health care, energy, climate change, financial regulation and immigration – on something as minor for him and as popular for so many legislators as Buy American.”

Simpson does write though, “More important from a foreign policy perspective, the provinces have encouraged Ottawa to negotiate a sweeping free-trade agreement with the European Union.”

“The EU’s key objective in these negotiations is to eliminate preferential provincial procurement policies.”

A supporter of these deals, Simpson adds, “If the EU negotiations succeed, provinces (read Canada) could hardly offer freedom to bid on provincial contracts to Europeans without offering the same deal to Americans. Opening up now to U.S. companies as part of an exemption from Buy American – supposing one could be negotiated – would be part of liberalization by provinces among themselves, toward Europe and the United States.”

The Globe and Mail article is at http://www.theglobeandmail.com/news/world/keep-buy-american-in-perspective-obama/article1290824/?.

The media conference transcript is at http://www.thestar.com/Comment/article/696652.

Jeffrey Simpson’s column is at http://www.theglobeandmail.com/news/opinions/obama-on-buy-american-please-stay-calm-canada/article1290349/?.