Canadian companies can now bid on U.S. infrastructure projects financed under their $787-billion economic stimulus package ending the year-long Buy America dispute.
Thirty-seven U.S. states are involved in the deal; in exchange, American firms get access to provincial and municipal projects under the deal negotiated between the Harper government and the Obama administration.
It is not clear, however, exactly how much of that U.S. stimulus money is still available or whether this agreement has come too late for Canadian companies.
The other key plank of the deal is the establishment of a fast-track consultation process if further Buy American restrictions be applied to future funding programs.
The resolution was announced today by International Trade Minister Peter Van Loan and Foreign Affairs Minister Lawrence Cannon.
"This agreement will ensure that secure and profitable and predictable access to each other's marketplace remains a cornerstone of our trade relationship for years to come," Mr. Van Loan said.
The Trade Minister said Canadian companies will have access to state and public works projects under the American Recovery and Reinvestment Act. These include programs of the American departments, such as energy, housing and the Environmental Protection Act.
It is limited, however, as it only covers contracts under the U.S. stimulus package, which stops doling out funding Feb. 17.
Canada's relationship with its biggest trading partner was threatened last year after the U.S. Congress imposed rules prohibiting foreign firms from bidding on stimulus contracts.
Since then, U.S. President Barack Obama has not been able to meet with any Canadian official without hearing about the dangers of the Buy American policy.
Prime Minister Stephen Harper has pressed for the easing of restrictions in his meetings with the President, Mr. Van Loan said.
He said that the provinces are all on side with this agreement, which will bolster job numbers as Canada climbs out of the global recession.
"It is clear that our trading relationship is essential to businesses and communities in our two countries," Mr. Van Loan said. "We are each other's primary trading partner and the deep integration of our markets makes us both more competitive globally."
The opposition, however, was unimpressed with the government's efforts to resolve the dispute.
"The Conservative government has capitulated to a deal they rejected over a year ago," Liberal trade critic Scott Brison said in a news release. "Stephen Harper has failed to get any significant concessions from President Obama, after sniffing around for a deal for months on end."
He went on to call the deal "a face-saving exercise with very little real benefit to Canadian companies."
(Photo: Reuters)
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Buy American basics
» What is Buy American? When Congress passed its mammoth economic stimulus package a year ago, it included a provision prohibiting foreign firms from receiving stimulus-related contracts.
» How much does it cost Canadians? About $800-billion of contracts was off-limits to Canadian firms, and even to U.S. firms that used Canadian suppliers. While all foreign companies complained, Canadians were especially upset, since the country's manufacturing sector is intimately tied to the United States.
» What are key changes in the deal? Although many of the contracts have already been awarded, Canadian firms will be able to bid on much of what's left. In return, U.S. firms can bid on provincial and municipal contracts in this country.