Things seem to be going well up north for the Canucks. The Winter Olympics are in full swing, the local economy is buzzing, and Bilodeau has even earned the Canadians their very first gold on home soil. On top of all this, according to the US Trade Representative’s Office, US and Canada have finally “resolved” the key disputes they have recently had over the Buy American provisions listed in the US Economic Recovery and Reinvestment Act of 2009. Unfortunately, the Ontario Federation of Labour does not share this opinion.

According to a statement from USTR Ron Kirk "This agreement resolves key outstanding US-Canada government procurement issues and creates tens of billions of dollars worth of new job-supporting export opportunities for American companies and workers." The leaders of the OFL, however, claim that the resolution signed yesterday is “lopsided” and “unfair” because of particular terms that favor American interests. An excerpt from the article I originally found on this subject will help to explain why this sentiment may exist:

“The agreement gives US firms permanent access to Canadian provincial and territorial procurement contracts consistent with the WTO's Government and Procurement Agreement (GPA). American companies will also be able to compete for Canadian construction contracts not covered under the GPA through September 2011, Steel Business Briefing understands.

In turn, the US will provide reciprocal access for Canadian companies to 37 US states already covered by the GPA, but will only give access to "a limited number of Recovery Act programs," according to a statement from the US Trade Representative’s office.”

As you can see, it is not very hard to believe why some Canadians may feel slighted. While I’m sure their were many factors, issues, and points of leverage that made this agreement make sense in the immediate future, the US has also committed to considering a long term procurement agreement within the next 12 months "to deepen on a reciprocal basis, procurement commitments beyond those in the WTO GPA and NAFTA."

So, in actuality, it seems that the US and Canada have found a short term solution to alleviate immediate pressures. Time will tell if US representatives honor their commitment and create agreements that align the best interests of both the United States and Canada. While “winning” in a negotiation with Canada may benefit Americans in the short term, it will be more beneficial for the US over time if we can use this opportunity to strengthen our relationship with Canada as an economic ally. For more info on this trade spat, please see the following four posts (1, 2, 3, 4).
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  1. A very interesting perspective on the Buy American Exemption.

    Here is the link to a recent article which also includes an audio excerpt of an interview I did with Canada's Trade Minister at the time Stockwell Day which focuses on the basis for the BAA and the resulting agreement;

    This next link is to a PI Window on Business Special in which Washington-based expert author Judy Bradt shares her insights and expectations relating to the new accord:

    Given the direct interaction with both the Minister and the Senior Government Officials involved in the actual negotiation process you will find the insights interesting.