Economic News/Trends and Analysis — February 5, 2010

Media Advisory - Short-sighted Buy America deal will have long term consequences for Canada, CAW says

TORONTO, Feb. 5 /CNW/ - As federal parliament remains suspended, the Harper government has snuck through a "Buy America" exemption deal with the United States that will do more harm than good for Canadian workers and businesses in the long term, said CAW President Ken Lewenza.

Lewenza's comments follow official announcement of the deal by International Trade and Foreign Affairs Minister Peter Van Loan made earlier today.

"This is a ridiculous deal negotiated under the radar by the Harper government," said Lewenza. "It fails to protect Canadian interests, it gives up more than it gets and trades off long term opportunities for possible short term gains."

The special exemption deal, widely cited as an emergency measure to protect the interests of Canadian companies reportedly shut out of U.S. economic stimulus funds, could effectively remove the rights and powers of provincial and municipal governments to manage public spending on big ticket construction projects. These projects, Lewenza said, should be used to develop Canada's economy and keep Canadians working.

Under the deal, provinces, territories and various municipalities will be given a chance to bid on whatever remains of U.S. federal and state economic stimulus projects up until February 17 (when the project awards will be complete). No guarantees were made to ensure Canadian jobs will be created.

In the meantime, the deal leaves governments vulnerable to the terms and conditions of the World Trade Organization Government Procurement Agreement (GPA), which restricts public purchasing rules.

Currently, only 37 U.S. states are party to that agreement, with no U.S. municipalities having signed on.

"This deal might provide some Canadian businesses an opportunity to bid on the remaining trickle of U.S. project money, but opens up the floodgate of Canadian purchases to U.S. companies," Lewenza stressed.

Buy America provisions are still widely used in the U.S. for most federally funded projects, and will continue to be used long after this recession is over, Lewenza said.

"At a time when a growing number of Canadians are expecting government to protect Canadian jobs, the Harper government is going in the opposite direction."

For further information: Angelo DiCaro, CAW Communications, (416) 606-6311

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