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Global Biz

Canada signs 'Buy American' deal

(China Daily)
Updated: 2010-02-06 10:28

WASHINGTON: The United States and Canada have reached a tentative deal on "Buy American" provisions following a disagreement that strained US ties with its northern neighbor and largest trade partner, a US trade official said.

The two countries were expected to formally announce the agreement on Friday. It must be cleared with stakeholders on both sides before it is signed.

Congress included a "Buy American" mandate in last year's $787 billion economic stimulus act that required public works projects use only US-made products such as steel. The measure was touted as a way to ensure that funds spent under the stimulus package created jobs in the US.

But critics, including many of the largest US business groups, believe that it threatens jobs at US companies that rely on global supply chains to manufacture goods, boosts stimulus costs, and creates project delays.

At President Barack Obama's request, US legislators exempted countries, including Canada, that have opened their own government procurement markets to the US.

But that did not spare Canadian provinces and cities, which are not party to a government procurement pact with the US, even though Canada's federal government is.

Last June, after Canadian companies were shut out of initial US stimulus contracts, Canadian cities threatened to retaliate by banning US companies from their projects.

The US official, who asked not be identified, said the deal would give US exporters permanent access to Canadian provincial and territorial government procurement markets.

In exchange, the US will provide Canadian companies access to the 37 US states already covered by the pact.

Reuters