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CME calls on Canada and US to harmonize government procurement practices

Published by Derek Lothian on October 18, 2011

The following statement was issued by CME's Martin Lavoie, director, manufacturing competitiveness and innovation policy:

On Monday, Canadian Minister of International Trade, The Honourable Ed Fast, and his US counterpart, Ambassador Ron Kirk, met in Washington D.C. to discuss the economic relationship between our two countries. CME, Canada's largest trade and industry association, remains thoroughly supportive of Minister Fast's strong commitment to North American economic integration. In the field of government procurement, however, a lot of work remains to be done in order to achieve the level of integration that has taken place in other sectors of the continental economy.

CME has been a strong advocate of a bilateral agreement with the US that is permanent, broadly-based, and inclusive of all business and service sectors, as well as all levels of government, including transfers of funds for projects between various levels of government.

The statement made earlier today by the US Ambassador to Canada to the effect that there will be no exemption for Canada under the proposed American Jobs Act reinforces CME's position regarding the need for a permanent and expanded government procurement agreement that would tackle the heart of the problem, which is the absence of reciprocity at the sub-national level. In the meantime, CME will continue to work very closely with key-members of Congress to emphasize the need for greater integration and more open rules governing each other's government procurement markets.

CME strongly believes that the definitions of ‘domestic content' should be expanded to include parts, goods, and services originating in either Canada or the United States. This approach has several benefits:

  • First, it would recognize, support, and strengthen the competitiveness of integrated industries and supply chains, enabling both countries to compete better against the rest of the world.
  • Second, this approach would allow Canada to position ourselves apart from the real US concern in Buy American policies. Canada has a similar manufacturing market structure to the US in contrast to other jurisdictions that are non-market economies or that rely on unfair trade practices.
  • Third, this approach has a precedent in the concept of the North American Industrial Base that stands as the basis of our successful history of bilateral cooperation in defence procurement. A bilateral agreement between our two countries providing companies on both sides of the border with 'equal' access to each other public sector procurement is most likely to get the broadest support of business and political leaders in both countries.

Canadian companies do not compete today on a level playing field as a result of Buy American policies, which not only impose needless uncertainty for businesses on both sides of the border, but also diminish their ability to make the right business decisions with regards to the location where components and final products must be manufactured in order to achieve the right balance between quality and price.

CME urges the Canada and the US governments to eliminate barriers to government procurement in both countries, at both national and sub-national levels.

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