Politics

Breakthrough made on 'Buy American'

Canadian companies will get access to funding from U.S. economic stimulus projects in 37 U.S. states under a deal to circumvent the protectionist "Buy American" clause, CBC News has learned.

Canadian companies will get access to funding from U.S. economic stimulus projects in 37 U.S. states under a deal to circumvent the protectionist "Buy American" clause, CBC News has learned.

The breakthrough in negotiations between Washington and Ottawa might not be announced until tomorrow, the CBC's Chris Hall said.

Industry Minister Tony Clement, seen in a file photo, would not confirm details of the trade deal when he spoke to reporters on Thursday at Parliament Hill. (Sean Kilpatrick/Canadian Press)

During an afternoon press conference, Industry Minister Tony Clement would not confirm details of the deal but said Trade Minister Peter Van Loan and Prime Minister Stephen Harper were working hard on the file.

"There is nothing to be announced now," Clement told reporters at Parliament.

The agreement applies only to U.S. funding delivered under the current stimulus program, not future legislation that might include "Buy American"-type provisions.

The U.S. money is allocated for roads, public housing and other infrastructure projects, the drawback being that most of the money has already been spent.

Hall said the Canadian government is arguing the deal sets a precedent for future stimulus spending in the U.S.

In return, Canadian provinces are to sign on to a World Trade Organization general procurement agreement, which will give the U.S. and other countries access to projects underway in Canada with federal stimulus spending.

The "Buy American" provision gives priority to U.S. iron, steel and other manufactured goods for use in state-level and municipal public works and building projects funded with stimulus tax revenue.

The provision was put into the $787-billion US American Recovery and Reinvestment Act — the U.S. government's economic stimulus package — by the U.S. Congress.

Canada has been trying to get an exemption from the provisions since last fall.

In October, reports of progress between the U.S and Canada over the controversial provision prompted the Federation of Canadian Municipalities to withdraw a resolution to block U.S. companies from bidding on city contracts in this country.

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