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VIEW: ‘Parliament must enforce free trade in Canada’, says Gordon Gibson

Gordon Gibson writes in an op-ed in the Globe and Mail today that, “the United States is turning more protectionist and inserting ‘Buy American’ requirements into more and more government projects. In some cases, NAFTA offers no defence and, even when it does, the rules take years to enforce. When a town in California instructs a contractor to rip up some piping because the valves were made in Canada, you know you have a problem. But the Americans can reply: ‘Your provinces do the same thing.'”
He also notes, “Ottawa is working hard to negotiate a free-trade agreement with the European Union. …But there’s a huge stumbling block for the Eurocrats. Since so much of the purchasing in Canada is controlled by the provinces, the EU wants any deal to be enforceable on provincial and municipal procurement as well. This is a deal breaker.”

Gibson writes that in the British North America Act, “there’s Section 121: ‘All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.’ This sounds clear, but Ottawa has been afraid to enforce it.”

His solution? “Let Parliament pass a law giving teeth to Section 121, defining free trade in Canada and prohibiting interference with it, directly or indirectly. Included should be enforcement procedures, such as a right to deduct penalties in cash from moneys otherwise payable to provinces by way of equalization or other transfer payments. The penalties should be serious enough to capture the attention of every provincial treasurer.”

This follows the news on Monday that the Canadian Manufacturers and Exporters, the Canadian Chamber of Commerce, and the Canadian Council of Chief Executives wrote the provincial premiers stating, “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.”

Mr. Gibson’s op-ed is at http://www.theglobeandmail.com/news/opinions/in-tough-times-we-cant-afford-provincial-barriers/article1165716/

More on the letter from the business lobby at http://canadians.org/campaignblog/?p=625