Deal reached between Canada, U.S. on Buy American, sources say
WASHINGTON (CP) — Canada and the United States will announce Friday that the yearlong dispute over protectionist Buy American provisions has finally been resolved after efforts that involved the highest levels of government.
A deal will be announced simultaneously in Washington by the U.S. Trade Representative’s office and in Ottawa by International Trade Minister Peter van Loan, The Canadian Press has learned.
The breakthrough follows months of negotiations and conversations about the dispute between Prime Minister Stephen Harper and President Barack Obama as recently as late December.
A source familiar with the negotiations said the agreement will immediately exempt Canadian companies from seven programs under the Buy American provisions in the US$787-billion economic stimulus package passed by Congress last year, and in the 37 U.S. states that adhere to the World Trade Organization’s government procurement agreement.
In return, Canadian provinces and municipalities will give the green light to American firms bidding on projects north of the border.
The deal only covers contracts granted under the U.S. stimulus package, with its deadline for dol- ing out cash just around the corner on Feb. 17. But sources say Canadian officials will continue to push for a permanent exemption for Canada from any and all Buy American provisions.
The same protectionist measures are in the massive jobs bill currently working its way through Congress and are expected to pop up in other pieces of legislation in the weeks and months ahead.
Nonetheless, said a source familiar with the negotiations: “It’s an important signal that recognizes the integrated nature of our economies.”
That signal, the source added, would be significant once discussions on a permanent solution begin.
The new deal also furthers Harper’s goal of breaking down interprovincial trade barriers and gives momentum to his push to have a single securities regulator, the source said.