The Canadian government has offered the U.S. guaranteed access to the provinces’ public purchases in exchange for a quick waiver of Buy American provisions that have frozen Canadian companies out of lucrative American stimulus-spending contracts, reports The Globe and Mail.
The American Recovery and Reinvestment Act of 20o9, the $787-billion stimulus package passed earlier this year, requires that all steel and manufactured goods used in spending projects be made in the U.S. This Buy American provision has put a strain on U.S. trade with Canada. Several Canadian towns have even responded in kind, passing “Buy Canadian” resolutions of their own.
Now, The Globe and Mail reports that Canada’s trade minister Stockwell Day wrote to U.S. Trade Representative Ron Kirk last Thursday offering time-limited guarantees to sub-federal procurement in exchange for exempting Canadian companies from the “Buy American” requirements in the Recovery Act and any similar requirements in new federal U.S. legislation.
“This offer is ambitious in its coverage of all Canadian provinces, territories and major municipalities as well as coverage comparable to that under NAFTA for all goods and services, including construction services,” Mr. Day wrote in the letter.
When Canadian officials approved NAFTA in 1994, they wanted spending by states, provinces, and cities left out. This new agreement would supersede those provisions and essentially open Canadian public contracts to U.S. competition.
The letter from Day says that this deal will serve as “an example to the world that protectionism is not the appropriate response to our current economic difficulties.”
Reports from the Reuters Auto Summit, which is taking place this week at Reuters’ offices in Paris and Detroit, tell the story of just how hard the recession hit automotive suppliers.
