8 February 2010 | Helen Gilbert
Canada has won an exemption from “Buy American” provisions after months of campaigning.
The policies were introduced in the US in the 2009 American Recovery and Reinvestment Act. They cover $280 billion (£180 billion) of government infrastructure projects and require US states and municipalities to purchase only US-produced iron, steel and other manufactured goods.
The Canadian government and business groups have been fighting for the regulations to be dropped since they were introduced in February last year.
The exemption means Canadian suppliers will now have access to state and local public works projects undertaken as part of the Recovery Act in a range of areas for a period of time. It is not clear how long the exemption will last.
The projects include programmes directed by the Department of Energy, Department of Housing and Urban Development and the Environmental Protection Agency. These are areas where Canadian companies have traditionally been suppliers or sub-contractors in the US.
Under the provision of the World Trade Organization’s Government Procurement Agreement, Canada and the US have also agreed to offer each other permanent market access at a local level. This means Canadian suppliers will have guaranteed access to US sub-federal contracts and US suppliers will have guaranteed access to provincial deals.
The two countries have also agreed to begin discussions within the year to explore the possibility of additional reciprocal access to procurement markets on a permanent basis. Both will establish a fast-track consultation process should similar Buy American provisions be applied in future.
Jayson Meyers, president and CEO of Canadian Manufacturers and Exporters, said: “This is an important agreement. It is a good step in the right direction and puts Canada in a stronger position in our efforts to fight Buy American restrictions in the future.”
John Manley, president and CEO of the Canadian Council of Chief Executives, added: “The prosperity of both Canada and the US depends heavily upon our ability to work together in overcoming shared challenges.”