Canada, U.S. strike deal to end "Buy American" spat

Fri Feb 5, 2010 1:37pm EST
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By David Ljunggren

OTTAWA (Reuters) - Canada has reached a tentative deal with the United States to end a dispute over "Buy American" provisions in U.S. legislation that had strained bilateral ties, the two trading partners announced Friday.

Under the agreement, which is designed to settle months of wrangling over what Canada saw as U.S. protectionism, both nations will open up parts of their internal markets to the other's companies.

Washington said it was happy with the deal because U.S. companies will finally gain access to long-closed and potentially lucrative public works contracts in Canada's 10 provinces and three territories.

In return, Canadian companies will be able to compete for projects in the 37 U.S. states already covered by the World Trade Organization government procurement agreement.

They will also be able to bid for what remains of $18 billion worth of state and local public works projects under seven programs funded by last year's $787 billion U.S. Economic Stimulus Act.

The U.S. Congress had included a "Buy American" mandate in the measure, requiring public works projects to use only U.S.-made products. The move angered critics in both the United States and Canada, which said it would cost jobs.

"Secure and predictable access underpins our trading relationship and is grounded in trade rules and a shared commitment to work together to resolve differences when they arise," Canadian Trade Minister Peter Van Loan and U.S. Trade Representative Ron Kirk said in a joint statement.

The deal must still be approved by both countries.   Continued...