U.S., Canada End Trade Dispute Over 'Buy American' Provisions

Feb. 5, 2010
Washington will provide Canadian suppliers access to state and local public works projects under the American Recovery and Reinvestment Act of 2009.

The United States and Canada ended a year-old dispute on Feb. 5 as Washington agreed to waive "Buy American" provisions barring Canadian firms from projects under a massive stimulus package.

The controversial U.S. provisions were part of the nearly $800 billion stimulus package adopted last year and drew criticism from various countries which branded them as a protectionist measure.

Under a tentative agreement reached between the U.S. and Canada, Washington would provide Canadian suppliers access to state and local public works projects under the American Recovery and Reinvestment Act of 2009 aimed at stimulating the world's largest economy from recession.

In return, Ottawa will also provide U.S. suppliers with access to construction contracts across its provinces and territories, as well in as a number of municipalities -- seen as a breakthrough by Washington.

Canada's move followed a decision to sign up its provinces to the World Trade Organization's government procurement agreement, officials said.

"The trade and investment relationship between the United States and Canada is very important to both of our countries," said a joint statement by U.S. Trade Representative Ron Kirk and Canada's Minister of International Trade Peter Van Loan.

"At its core are thousands of jobs and business relationships that have developed over many decades," they said.

The Buy American provisions had mandated that all steel and manufactured goods purchased with the stimulus funds be made in the United States or in countries with U.S. agreements on government procurement. Local-level projects were also mostly confined to U.S.-made goods.

Ottawa has been pushing President Barack Obama's administration to make an exception for Canadian goods in return for a guarantee that city and provincial bids would be open to U.S. firms.

For years, the United States has also been pushing for access to Canadas significant provincial procurement sector, under the WTO Government Procurement Agreement, which Canada has resisted.

"This administration made clear to Canada from the outset that any agreement to provide Canada with expanded access to U.S. procurement absolutely must provide guaranteed reciprocal access for US exporters to supply goods and services to Canada through provincial and territorial procurement contracts," Kirk, the top U.S. trade official, said. "USTR has won that access for American firms, and I look forward to signing the agreement soon," he said. "The value of new job-supporting contracts open to US firms will be tens of billions of dollars."

Copyright Agence France-Presse, 2010

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