“The new trade agreement forged by Canada and the United States as a way to side-step U.S.‘Buy America’ provisions amounts to Canada giving away the farm for very little in return,” says CUPE National President Paul Moist.
The agreement, which opens up Canada’s municipal and provincial procurement markets to the U.S., will give American companies access to over $100 billion in Canada’s annual sub-federal procurement market.
“This agreement is certainly good news for American corporate interests, but there is very little assurance that this agreement will create good jobs for Canadians,” said Moist.
With the bulk of U.S. stimulus money already spent, the deal does very little to resolve the issue that started the dispute – specifically, that Canada could not profit from U.S. stimulus dollars. However, the new agreement will leave the ‘Buy America’ provisions basically intact, and only applies to the 37 states that have signed on to the World Trade Organization (WTO) Government Procurement Agreement (GPA).
Meanwhile, under WTO rules provinces and municipalities will lose an important policy tool in the form of local purchasing power.
“Buy local policies are good for the environment and for Canadian businesses, and they keep jobs and tax revenues in the community. Why the Harper government would enter Canada into such an uneven deal for Canada is baffling,” said Moist.
The agreement may also open the floodgates to increased privatization of public services such as water and hydro. While provincial and municipal procurement was previously excluded from NAFTA, now U.S. investors will be able to launch Chapter 11 investor rights challenges if they feel provinces or municipalities are taking policy actions that harm their interests.
“This deal commits Canadian governments to forfeit valuable procurement sovereignty, while the U.S. offer is largely empty. This kind of risk is the last thing we need during an economic slowdown. Our government needs to look at improving its own record of research, development and innovation, instead of selling our provinces and municipalities short.”