Canada Nears Procurement Deal From U.S. Companies

TORONTO (AP) -- Several Canadian provinces are close to signing a deal that would open up public procurement more broadly to both Canadian and U.S. firms in reaction to "buy American" rules, Canada's trade minister said Wednesday.

Stockwell Day said he is hoping to get unanimous agreement from all 10 provinces within a couple of weeks, but will move ahead even if he has only a majority on his side.

Day said he hopes to use the signed agreement as a lever to get the United States to back off "buy American" provisions.

He says the protectionist rules are shutting out Canadian firms from bidding on about $290 billion in infrastructure projects being funded by stimulus spending from the U.S. government.

Obama's administration introduced the "buy American" policy in the nearly $800 billion stimulus package adopted earlier this year, which requires projects funded with stimulus money to use only U.S.-made steel, iron and manufactured goods.

"Buy American" supporters in the U.S. want to make sure that the billions of U.S. taxpayer dollars being spent will revive the economy and create jobs at home.

But the provision has angered international governments who accuse the U.S. of preaching free trade while practicing stealth protectionism.

Canada and the U.S. share the largest trading relationship in the world. More than 70 percent of Canada's exports go to the United States.

Since the "buy American" provisions were introduced, Canadian companies have said they have been facing increasing difficulties in winning government contracts in U.S states and cities.

The Canadian Manufacturers and Exporters association says about 200 firms have potentially been affected by the provisions.

Day said the procurement agreement would enable firms from both sides of the border to bid on provincial, state and city contracts, and not just federal jobs.

There is no guarantee the U.S. Congress and states will reciprocate to the Canadian overture, but Day said there could be a trade war if the provinces don't make the attempt.

Day said he understands why provincial premiers are carefully considering the issue, but warned that time is of the essence because stimulus contracts are proceeding in the United States without Canadian firms having a chance to bid.