June 10, 2009 / 5:44 PM / 11 years ago

UPDATE 2-Canada has few rights in 'Buy American' flap-USTR

* Canada has few rights in U.S. state, local procurement

* USTR willing to eye reciprocal deal on procurement

* Canadian premiers, business groups push for new deal (Recasts, updates with additional information)

By Roberta Rampton

WASHINGTON, June 10 (Reuters) - Canadian suppliers currently have few rights in U.S. state and local government procurement, but the U.S. Trade Representative is willing to discuss a reciprocal deal, a USTR spokeswoman said on Wednesday.

Responding to concerns about the “Buy American” provisions of the U.S. economic stimulus package, Debbie Mesloh noted the U.S. government requires “reciprocity” for rights to U.S. procurement opportunities.

“USTR is always willing to sit down with our trading partners to discuss access to our procurement market when they are ready to enter agreements with specific commitments to provide reciprocal opportunities for U.S. goods, services, and suppliers,” Mesloh said in an email response to questions.

The “Buy American” provision in the $787 billion U.S. stimulus package has become a sore spot in U.S.-Canada relations. The two nations shared close to $600 billion in bilateral trade last year, and are each other’s largest trading partners.

The provision requires public works projects to use iron, steel and other goods made in the United States, as long as that does not contravene trade commitments.

The Canadian government and business groups on both sides of the border have complained some U.S. state and municipal governments have excluded Canadian companies as suppliers in water and sewage projects funded by U.S. stimulus money.

Canadian premiers said on Tuesday they support “the negotiation of a broad, reciprocal procurement liberalization agreement” to ensure Buy American measures don’t hurt jobs.

Canadian business groups have also urged Prime Minister Stephen Harper to negotiate a new procurement deal.

The Buy American provision ensures that parties to the World Trade Organization government procurement agreement and other free trade deals can bid on U.S. government contracts, Mesloh said.

“While the United States covers 40 states in various (trade) agreements, none of those commitments extend to Canada since it has never offered its provinces under the NAFTA or the WTO” government procurement agreement, Mesloh said.

“As a consequence, Canadian suppliers have few rights to sub-central procurement in the United States,” she said. (Reporting by Roberta Rampton and Doug Palmer in Washington and Louise Egan in Ottawa; Editing by Eric Walsh)

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