News of an imminent Canada-U.S. procurement agreement that would carve out exemptions from ‘Buy American’ conditions for Canadian companies bidding on U.S. state contracts should be handled with skepticism, not all-out celebration, warns the Council of Canadians. The organization is demanding the Harper government publicly release the letter it sent to the Obama administration this summer outlining its proposal.
“If Obama is going to agree to let Canadians bid on U.S. stimulus contracts that’s fine but if that means applying NAFTA and other international trade rules to the provinces and cities, then the drawbacks for Canadian companies could be far more significant than the modest and temporary benefits of equal access to U.S. markets,” says Maude Barlow, national chairperson of the Council of Canadians.
Canada‘s provinces and cities are exempt from NAFTA’s non-discrimination and most favoured nation clauses when it comes to public procurement of goods and services, such as for construction on major infrastructure projects. That means they can pick an American company if they feel it’s the best deal for taxpayers, but they can also favour local suppliers and put other conditions on winning bids, such as minimum local content rules or that employees be hired from the community.
Few details have been released about the Harper proposal to Obama, but it is known that a temporary reprieve from ‘Buy American’ rules for Canadian companies would be followed with the negotiation of a bilateral accord that could permanently strip provincial and municipal governments of the choice to buy locally. If the bilateral deal looks anything like the WTO Agreement on Government Procurement, it might also ban anti-sweatshop or other ethical procurement schemes, as well as sustainability initiatives, such as 100-mile-diet policies in municipally owned buildings.
“This isn’t a case of protectionists versus free traders, as our government is painting resistance to this bilateral proposal,” says Barlow. “The right of local and provincial governments to spend tax dollars on developing the local economy is not a barrier to trade. It is and must remain a matter of choice for Canadian and American communities.”
The Council of Canadians requested a copy of the Canadian proposal to Obama several weeks ago and was told by the Department of Foreign Affairs and Trade to file an access to information request. This request has been delayed because, according to the government, looking for it would take too much of the department’s time.
“It’s a little worrying, to say the least, that the Canadian government is purposely hiding this ‘Buy American’ proposal from the Canadian and American public,” says Stuart Trew, trade campaigner with the Council of Canadians. “What exactly has Harper offered that would convince Obama to tamper with the enormously popular ‘Buy American’ rules? We need to see the details.”
“Trade and economic policy affects us all,” adds Barlow. “It’s about jobs, it’s about local priorities and it should be about environmental protection. In this time of financial crisis when many countries are looking to more local sustainable alternatives to the global economy, Canada is speeding full steam ahead on the path of unregulated trade and investment that led us here in the first place.”