2 October 2009

Talks fuel high hopes for trade deal

The following is excertped from the 1 October 2009 edition of "The Star".

Behind-the-scenes talks to resolve the most damaging Canada-U.S. problem – protectionist Buy America rules – are moving along well enough to spark hopes of a breakthrough.

But it's not clear how soon it will happen or what concessions Canada's provinces and cities will eventually have to make to be spared from exclusionary U.S. purchasing practices.

With U.S. President Barack Obama signalling he'd like to defang Buy America policies, two hand-picked negotiators – Canada's Don Stephenson and the White House's Everett Eissenstat – continue talks in Washington on Thursday on an issue that has cost Canadian companies millions of dollars in lost business....

A resolution of the procurement spat is likely some weeks or months away, according to government and business sources.

The issue erupted early this year when the U.S. Congress inserted Buy America provisions in Obama's $787 billion economic stimulus package. The rules, which bar foreign-made steel and other manufactured goods from reconstruction projects financed from the $787 billion fund, have affected more than 200 Canadian exporters.

In hope of winning a short-term exemption for Canada's companies, Trade Minister Stockwell Day has offered the Americans a procurement deal in which Canadian provinces and city governments will for the first time guarantee not to block U.S. firms from bidding on contracts in their jurisdictions.

This temporary compromise would pave the way for long-term negotiations to open up and permanently harmonize procurement practices on both sides of the border.

The U.S. looks favourably on Ottawa's offer and wants to pursue negotiations. But the Obama administration is still working on the details of what it could do to meet Canada's needs, a U.S. government official said Wednesday.

In Ottawa, Day told the media that talks are going on at the highest levels of the Canadian and U.S. governments. But "as of today, that work is not yet completed."