March 14, 2013 / 5:23 PM / 4 years ago

Canada eyes "Buy America" relief in Trans-Pacific pact

4 Min Read

Canada's International Trade Minister Ed Fast speaks during Question Period in the House of Commons on Parliament Hill in Ottawa October 25, 2012.Chris Wattie

WASHINGTON (Reuters) - Canada is pushing hard in trade talks with the United States and nine other countries for changes to U.S. "Buy America" provisions that have complicated cross-border trade, a top Canadian official said on Friday.

"Those provisions don't only have a negative impact on Canada, they have a negative impact on American businesses who are dependent on our integrated supply chains," Canadian Trade Minister Ed Fast said in an interview.

While they are aimed at boosting jobs in the United States, they actually increase costs for many U.S. companies, he said.

Congress, since at least the 1930s, has passed various pieces of legislation aimed at giving preference in government contracts to products made in the United States.

The most famous recent example was the 2009 economic stimulus act that required projects to use iron, steel and manufactured goods made in the United States unless it increased costs more than 25 percent or no U.S. product was available.

Canada, the largest U.S. trading partner, is concerned about proposals in Congress to include similar provisions in new infrastructure project legislation, Fast said.

"That's why we've made efforts to try to secure an outcome within TPP (Trans-Pacific Partnership) that ... allows our businesses to take advantage of trade liberalization even in the area of government procurement," Fast said.

The Trans-Pacific Partnership is a proposed regional free trade agreement among the United States, Canada, Mexico, Chile, Peru, Australia, New Zealand, Singapore, Malaysia, Vietnam and Brunei that negotiators hope to conclude this year.

Another Canadian priority in those talks are "temporary entry" provisions that would make it easier for Canadian professionals to work in the United States, Fast said.

Both Canada and Mexico jumped into the TPP negotiations last year, after other countries had finished 14 rounds.

Japanese Prime Minister Abe Shinzo is widely expected to announce on Friday Japan's interest in joining the talks, something that country has been deliberating almost since the negotiations began in March 2010.

It would be up to the current TPP members to decide whether to allow Japan into the talks and potentially endanger the already challenging goal of finishing in 2013

Bali Meeting

"If, in fact, Japan is invited to join the negotiations, that would add another level of complexity. But it would still remain our goal ... to complete these negotiations before the end of this year," Fast said.

He also did not rule out the possibility the deal could be completed by October, when all the TPP leaders will be in Bali for the annual Asia Pacific Economic Cooperation (APEC) meeting.

"The objectives, if we're able to achieve them, are important enough that we make every effort to get this agreement completed sooner rather than later," Fast said.

Some have portrayed the negotiations as an attempt by the United States and the other TPP members to economically "contain" China, whose rapid growth over the past few decades has had profound impact on world trade.

Fast, in separate remarks at the Peterson Institute for International Economics, denied that charge, but said it "would be problematic" to incorporate China into the agreement until it shows much more willingness to remove both its tariff and non-tariff barriers that encumber trade.

Meanwhile, Canada hopes to wrap up trade talks with the European Union this year. That comes just as the United States is getting ready to launch its own free trade negotiations with the 27-nation economic bloc.

That has led to speculation the efforts could eventually be merged into a gigantic transatlantic pact between the EU and the three North American Free Trade Agreement partners - Canada, Mexico and the United States.

"I've been very clear that it's premature to consider whether that will even be an option. Right now, Canada is focused on its own negotiations with the EU and we expect an ambitious outcome," Fast said.

Reporting by Doug Palmer; Editing by Vicki Allen

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