Canada Gains Access to "Buy American"
Feb 10, 2010
bilateral, deficit, sovereignty
A few days ago, a deal was reached between Canada and the United States that would exempt Canadian companies from the “Buy American” clauses in the US government legislation on stimulus spending.
For the better part of a year, Canadian firms have been unable to bid on the $787 million worth of US stimulus projects. Some 37 US states and the US federal government are now involved in the deal.
However, a new study by the Canadian Centre for Policy Alternatives (CCPA) argues that the new deal fails to gain a meaningful exemption for Canadian suppliers from provisions in the US stimulus package while “permanently curtailing provincial and municipal procurement sovereignty.”
In Buy American Basics, CCPA trade researcher Scott Sinclair argues that the deal is highly unbalanced and provides significantly better access for US suppliers to the Canadian procurement market than for Canadian suppliers to US stimulus projects.
According to Sinclair’s analysis, Canadian suppliers have an opportunity to compete only for an estimated $4 to $5 billion US of federally funded stimulus projects. This represents less than 2 percent of the roughly $275 billion US of procurement funding under the Recovery Act. Most of these funds have already been expended. In return, Canada has now given US suppliers access to a range of provincial and municipal infrastructure spending projects estimated to be worth more than $25 billion.
What concerns Sinclair most, however, is that Canada “has bowed to US pressure to permanently bind purchasing by Canadian provincial and municipal governments under the World Trade Agreement on Government Procurement.” This deal would therefore prevent Canadian provincial and municipal governments from preferring local goods or suppliers while leaving Buy American policies almost fully intact.
The report can be viewed here.
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