Canada, citing Buy American fears, says it might limit U.S. procurement opportunities

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OTTAWA (Businesshala) – Canada has told the Biden administration it could limit US companies’ ability to win Canadian buy contracts if Washington introduces stricter “Buy American” rules, Canada’s finance minister said on Thursday.

Canada’s Chrystia Freeland speaks to the media in the House of Commons foyer on Parliament Hill on January 27, 2020 in Ottawa, Ontario, Canada. Businesshala/Blair Gable/Files

To boost domestic manufacturing, President Joe Biden wants to strengthen provisions that apply to nearly a third of the $600 billion in goods and services the US federal government buys annually.

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Canada clarified in January that it would seek exemptions given the close integration of the two economies. Many US companies have Canadian suppliers who run the risk of losing business based on strictly enforcing the new regulations.

“When it comes to American buying, it is important for the United States to understand that buying is a reciprocal relationship,” Finance Minister Chrystia Freeland called on US Treasury Secretary Janet Yellen on Tuesday.

The US companies, Freeland said, did about $1 billion ($808 million) a year in business with the Canadian government, which it called a mutual buying approach.

“What Canada is saying to our partners is whether our buying opportunities will be as open to your companies as your buying opportunities are open to us. And that is something I discussed with the Secretary of the Treasury,” Freeland told a televised news conference in Washington.

The controversy over Buy American provisions is nothing new. In 2009, Congress included a similar mandate in an Economic Stimulus Act, which affected Canadian firms.

Months later, in 2010, the two countries reached an agreement, but Canadian companies complained that by then many US public works contracts had been closed.

Freeland’s office did not respond when asked if she intended to warn Yellen. The US Treasury did not immediately respond to a request for comment.

($1 = 1.2375 Canadian Dollar)

Reporting by David Ljunggren; Editing by Peter Cooney

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