February 6, 2009 / 10:59 PM / 9 years ago

Canada still cautious over "Buy American" plan

VANCOUVER, British Columbia (Reuters) - Canada remains cautiously optimistic the United States will keep tough protectionist language out of its economic stimulus bill, but it is too early for Ottawa to let its guard down, Trade Minister Stockwell Day said on Friday.

<p>Canada's International Trade Minister Stockwell Day speaks during Question Period in the House of Commons on Parliament Hill in Ottawa February 3, 2009. REUTERS/Chris Wattie</p>

While Canada was encouraged by the U.S. Senate’s move to soften the “Buy American” provisions of the bill, it remains concerned that could be reversed when congressional negotiators work out the final version of the legislation, Day said.

“Not bad progress, but we’re not 100 percent out of the woods yet,” Day told business luncheon in Vancouver.

The “Buy American” provisions would have required all public works projects funded by the more than $900 billion stimulus package use only U.S.-made iron, steel and manufactured goods.

Day said Canada was not asking the United States to undo laws encouraging domestic purchasing for government programs, which have been in place since the 1930s. However, Ottawa has worried those laws would be toughened, possibly breaching trade pacts such as NAFTA.

“We’re just saying: no more,” Day said.

Reporting Allan Dowd, editing by Rob Wilson

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