Canada Seeks to Expand Trade Agreement with the United States

Canada has asked the United States to open discussions on a new chapter of free trade that would cover procurement by states, provinces, and cities and guard against a feared rise of protectionist Buy American measures. According to an article in the June 26, 2009 edition of the Toronto Globe and Mail, Trade Minister Stockwell Day brought up the issue when he met with U.S. Trade Representative Ron Kirk at a session of the Organization for Economic Co-operation and Development in Paris this past June. Ambassador Kirk told Minister Day that he would look at a Canadian proposal, without making any commitments.

The Canadian government has raised concerns about the Buy American provisions attached to the massive U.S. stimulus spending package, which call for states and cities to use only U.S.-made iron, steel, and manufactured goods when they spend approximately US$260-billion in federal stimulus money. Other bills currently in Congress contain similar provisions for other products. On June 6, 2009, the Canadian Federation of Municipalities passed an advisory resolution to block U.S. suppliers from bidding on municipal projects within Canada in retaliation for the Buy America provisions. Canadian Prime Minister Stephen Harper has said he would like to see a new trade deal on so-called "subnational" procurement that would guarantee that states, provinces and municipalities would allow companies from both Canada and the United States to bid on their contracts. The Canadian federal government has asked provincial premiers to sign a declaration stating that their provinces will not discriminate against U.S. suppliers in order to convince state and local governments in the United States to drop their own protectionist measures.

-- Stanley Pfrang