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On February 16, 2010 theAgreement
Between the Government of Canada and The Government of the United
States of America on Government Procurement(the Agreement) came into force. The Agreement will allow
Canadian companies greater access to procurement by individual
States and the U.S. Federal government. It will also provide them a
waiver from the "Buy American" provision of theAmerican Recovery and Reinvestment Act of
2009(ARRA) for procurements over minimum
thresholds.
The Agreement amends both U.S. and Canadian commitments under
the World Trade Organization's Agreement on Government
Procurement (GPA). Previously, the U.S. specifically excluded
Canadian companies from benefiting under the U.S. GPA commitments
for procurement by U.S. States. The amendments to the U.S. GPA
commitment remove this exclusion. Canadian companies will be
allowed to supply goods and services procured by certain agencies
and bodies in 37 states including New York, California, Illinois,
Florida, Arizona, Massachusetts, Michigan, Pennsylvania and Texas,
provided the procurements are in excess of 355,000 SDR
(approximately US$543,647) for supplies and services and 5 million
SDR (approximately US$7,655,000) for construction. The extension of
U.S. GPA commitments to Canadian companies also provides them a
waiver under the "Buy American" provisions of the ARRA.
Of the 37 states 11, including Florida, Illinois, Michigan, New
York, and Pennsylvania, do not grant access to Canadian companies
on construction-grade steel (including requirements on
subcontracts), motor vehicles and coal. Further, the Agreement does
not provide Canadian companies with access to Federal funds for
mass transit and highway projects.
The Agreement also provides Canadian companies temporary access
to procurement under seven U.S. Federal programs.1 These
include Water and Waste Disposal Programs under the U.S. Department
of Agriculture and Rural Utility Services, State Energy Programs
under the Department of Energy (Office of Energy Efficiency and
Renewable Energy) and the Public Housing Capital Fund under the US
Department of Housing and Urban Development. Until September 30,
2011 these programs must not impose the "Buy American"
provision of the ARRA with respect to Canadian iron, steel, or
manufactured goods where the procurement contract surpasses the
minimum threshold of 400,000 SDR (approximately US$612,560) for
goods and services and 5 million SDRs (approximately US$7,655,000)
for construction.2
In exchange for the U.S. commitments, Canada's provinces and
territories (excluding Nunavut) will provide American companies
access to procurement by most departments and many bodies and
agencies where the value exceeds the same values applicable to U.S.
procurement changes. Notable listed exceptions include highway and
rail construction in Ontario, construction grade steel in Quebec
and preferences and restrictions on highway projects in all
provinces and territories. The Agreement also gives American
companies access to procurement until September 30, 2011 by some
provincial crown corporations for construction contracts valued
over C$8,500,000.
A copy of the Agreement including a list of subject provincial
and territorial departments, agencies and organizations is
available
here.
A copy of the American state bodies and entities covered by the
agreement is available here.
Footnotes
1The Agreement, Art. 7.
2 1994 GPA, US Appendix I, Annex 3, Note 3.
Ronald Cheng practises administrative law and
related litigation with a concentration on international trade.
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