Will premiers come in step with Campbell's agenda?

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With the recession came stimulus spending, and in the United States, Buy American policies. Now Canada's premiers are being pressed to do a deal in which they had little interest a decade ago. For Gordon Campbell, the agenda dovetails with one of his obsessions.

Suddenly, Canada's trade issues, not just with the U.S. but with Europe, revolve a lot around what provinces buy or from whom.

Buy American provisions in U.S. stimulus bills are freezing out Canadian companies from a gold rush of state and city contracts, which aren't covered by the North American free-trade agreement. The federal government, and Canadian exporters, see one great hope to make it stop: Offer them a deal to open our provincial spending to them.

Mr. Campbell sees the 2007 agreement B.C. struck with Alberta to cut interprovincial trade barriers, the Trade, Investment and Labour Mobility Agreement (TILMA) as the model.

The question is whether other premiers will see the unusual confluence of threats and incentives from outside the country as an urgent enough reason to abandon their traditional reservations. Or let the moment pass.

Federal and provincial officials are trying to hammer out a procurement-deal proposal for the United States now. Mr. Campbell and the other premiers will discuss it at their annual meeting in Regina from Aug. 5-7.

Mr. Campbell is telling them it's time to stop ragging the puck. The premiers issued a statement last month supporting a new trade deal with the U.S. to cover state and local procurement, but he doesn't sound convinced they're on board.

"I hope they are. Again, I think it's easy to say it, it's more difficult to do it," he said in an interview. "Any time there's change, there's going to be resistance … The sort of comment is, 'It's great for everyone else, but not for us, because we're a special circumstance.' The issue is, it only works if we all agree it is in all of our interests."

The provinces haven't been able to agree before, or not really. In 1994, premiers signed the Agreement on Internal Trade, which was supposed to ensure firms from one province can bid on public contracts from another, but it's weakly enforced, despite talk of strengthening it.

"It's one of my frustrations. It's one of the reasons Alberta and British Columbia entered into TILMA. We kept waiting for everyone to agree," Mr. Campbell said.

When NAFTA went into effect in 1994, it included a provision for negotiating a new chapter on "sub-national" procurement - a protection against measures such as Buy American. However, it would have required Canadian provinces to guarantee U.S. companies could bid on contracts for their buses, hydro plants and probably supplies for hospitals and schools.

"There wasn't a deal because there were no parties who were interested in making a deal," said Michael Hart, a former Canadian trade negotiator now at Carleton University in Ottawa.

The U.S. wasn't interested in trading access to its market for one that's one-tenth its size without relatively no-holds-barred access to all provincial spending, and the provinces were not interested in that.

Mr. Hart said politicians have an interest in protecting the local business class that donates to political parties. But governments everywhere want to be able to say they are protecting or creating local jobs. Ontario buys foods for its prisons from Ontario farms; Nova Scotia allows government departments to give local firms preferential treatment.

"It's not huge, but what there is, get rid of it," Mr. Hart said of such policies.

That debate has been raging for years, but there are new incentives.

Canada has for years been hounding the European Union to negotiate some kind of trade deal - pushed hard by Quebec Premier Jean Charest - but the Europeans weren't interested until premiers agreed to put provincial procurement on the table.

Like the Americans, the Europeans weren't interested in a deal for a smaller market unless they got a sweetener that mattered to their firms: full access to contracts for things such as equipment for power plants run by provincial hydro utilities. Negotiations are on now.

Buy American, however, provided a new threat.

It's not just Canadian firms being unable to sell steel or manufactured goods bought with the $260-billion that the Obama stimulus bill transferred to states and towns - many think that won't be stopped before the money is spent. But a host of new bills include such riders for other products, raising the possibility the trend will expand.

"If people think the Americans are going to pay attention to us if we haven't done what we're asking of them, ourselves first, then they're dreaming … There's one way we'll be successful, and that's if we do all of the things we're asking them to do," Mr. Campbell said.