Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada and United States: Friends & Trading Partners Agreeing To Renew Vows

U.S. Commerce Secretary Gary Locke said on February 4, 2010 that "the United States is committed to a rules-based trading system where the American people - and the Congress - can feel confident that when we sign an agreement that gives foreign countries the privilege of free and fair access to our domestic market, we are treated the same." This statement was made amid rapidly circulating rumours that Canada and the United States have signed (in December 2009) and will announce on February 4th or 5th a deal that would exempt Canadian suppliers from "Buy America" provisions.

CTV's Ottawa Bureau Chief Robert Fife has provided a good summary of the rumoured deal:

  • U.S. lawmakers "watered down" protectionist policies Wednesday night in the Senate. The clause had been attached to Washington's massive $900-billion stimulus program.
  • Trade between Canada and at least 37 U.S. states will be opened up (the States that are represented in the WTO Agreement on Government Procurement.
  • Canadian companies will be let in on seven major U.S. programs.
  • The agreement is a precedent-setting for Ottawa, as it will prevent Canadian industry from being lumped in with other trading countries like China in the future.
  • The delayed announcement may be due to a different approach in Canada and the U.S.

The Hamilton Spectator reports at the deal only covers contracts granted under the U.S. stimulus package, such as money is allocated for roads, public housing and other infrastructure projects. However, it is important to note that the benefits may be limited because most of the stimulus money has already been spent during the period when Canada has been affected by the "Buy America" rules. The negotiators will continue to push for a permanent exemption for Canadian suppliers from existing and all new "Buy American" provisions.

On the Canadian side of the deal, Canadian provinces and municipalities (which have not provided schedules to Chapter 10 of NAFTA or the WTO Agreement on Government Procurement) will open procurement opportunities light to American firms bidding on government projects in their jurisdictions. Canadian provinces are to sign on to a WTO Agreement on Government Procurement, which will permanently and formally give the U.S. and other countries access to projects underway in Canada with federal stimulus spending. Most importantly, once the provinces have been "scheduled" (that is listed in the WTO Agreement), then bidders and potential bidders from WTO Members that have signed the WTO Agreement on Government Procurement will have access to the Canadian International Trade Tribunal government procurement complaint process and counties would challenge Canada under the WTO Dispute Settlement Understanding.

Canadians are waiting patiently for formal confirmation for the United States Trade Representative (Ambassador Kirk) and Canada's Minister of International Trade (Peter Van Loan) or Canada's Ambassador to Washington (Gary Doer). Canadians are hopeful that there will not be a last minute deal-breaker.

More will follow when information is made available.

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