Tuesday, October 6, 2009

Canada and US Still Negotiating Over Buy American Provision

Canada On Sunday, Canada agreed to postpone implementation of a June resolution that would have prohibited Canadian cities from doing business with U.S. companies because of the controversial "Buy American" provisions in the recent stimulus package.  Those provisions create preferences for the purchase of U.S. iron, steel, and other manufactured products by state and muncipal governments using U.S. taxpayor stimulus money.  Canada has complained that the "Buy American" provisions violate international trade rules, including the North American Free Trade Agreement or NAFTA.  The U.S. maintains that the "Buy American" provisions conform with all international trade rules because the provisions apply to sub-national governments, i.e., states and municipalities, which are not covered by trade treaties.  Settlement talks are underway between the U.S. and Canada and postponement of the Canadian resolution will allow those talks to continue.  News reports suggest that the U.S. is considering exempting Canada from the "Buy American" provisions which will allow the pruchase of Canadian goods on an equal footing with U.S. goods.  Some American businesses support the exemption because they obtain many of their supplies from Canadian companies. Jayson Myers, chief executive of the Canadian Manufacturers and Exporters, predicted that an agreement would be reached within two weeks.



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