Canada chems welcome trade deal with US as important step

05 February 2010 22:11  [Source: ICIS news]

TORONTO (ICIS news)--Canada’s chemical producers on Friday welcomed a trade deal with the US to exempt Canadian firms from protectionist US procurement rules as a “good first step”, they said.

The agreement, announced earlier on Friday, will exempt Canada from “Buy American” provisions under the $787bn (€575bn) US economic stimulus American Recovery and Reinvestment Act, ending a year-long bilateral dispute.

“We believe this agreement is a good first step toward recognition of the integrated nature of our two economies,” trade group Chemistry Industry Association of Canada said in a statement to ICIS news.

However, the group was advocating an even greater understanding and acceptance of the need for free and open trade with the US, it said.

This included continued investment in programmes to ensure the free flow of goods between the two countries, it said.

Canada’s chemical industry last year joined other trade groups in a lobbying effort against “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 the Ottawa-based trade group export almost 80% of production, that is, roughly double the global average and almost three times the US level.

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

Also, much of the business under the US stimulus act was already closed to Canadian firms as many contracts have been awarded, they said.

According to Scott Brison, trade critic for the country's opposition Liberal Party, $200bn out of $275bn in US infrastructure spending was no longer available.

However, Jayson Meyers, chief executive of trade group Canadian Manufacturers & Exporters, said that Friday’s agreement would put Canada in a stronger position fight possible “Buy American” restrictions in any future US legislation.

Canada’s international trade minister Peter Van Loan, in making the announcement earlier, conceded that parts of the trade deal with the US were only temporary.

However, both countries had agreed to discuss further measures to promote mutual access to procurement markets, he said.

($1 = €0.73)

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