Canadian producers to be exempt from US “Buy American” law

05 February 2010 15:47  [Source: ICIS news]

TORONTO (ICIS news)--Canadian companies have gained an exemption from “Buy American” rules in the $787bn (€575bn) US economic stimulus package, ending a trade dispute between the two countries, Canada’s international trade minister Peter Van Loan said in a media briefing on Friday.

Under a deal with the US, Canadian firms would have access to US state and local public works projects under the “American Recovery and Reinvestment Act” in a range of areas, including programmes of the US Department of Energy, the US Department of Housing and Urban Development and the Environmental Protection Agency, Van Loan said.

However, parts of the settlement with the US were only temporary and both countries had agreed to begin discussions within the year to put access to procurement markets on a permanent basis, he added.

Canadian commentators noted that Friday’s announcement only covered the US stimulus act and would not extend to future US legislation that may contain similarly protectionist clauses.

Canada’s chemical industry last year joined other trade groups in protesting the “Buy American” rules.

The chemical industry is Canada’s third largest exporter of manufactured goods and the US is its most important export market by far.

Member companies of chemical trade group Chemistry Industry Association of Canada export almost 80% of production, that is, roughly double the global average and almost three times the US level.

The Ottawa-based trade group noted Van Loan's announcement on its website but officials were not immediately available for additional comment.

However, Jayson Meyers, chief executive of trade group Canadian Manufacturers & Exporters said: “This is an important agreement. It is a good step in the right direction and puts Canada in a stronger position in our efforts to fight Buy American restrictions in the future.”

($1 = €0.73)

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