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Labour Relations: Don't buy into the Buy American exemption


April 7, 2010
by Ken Lewenza

Ken Lewenza is the president of the Canadian Auto Workers Union.

As if proroguing Parliament for the second time in less than a year wasn’t a clear enough message to Canadians that they have no control when it comes to setting their country’s priorities and agenda, the Buy American exemption deal further demonstrates the Conservatives’ disdain for the principles of democracy.

This significant trade agreement was negotiated behind closed doors and announced during a parliamentary shutdown without any debate or an opportunity for dissent from the opposition, or any input at all from Canadians.

The deal promises to level the playing field for Canadian businesses and workers by providing equal access with US companies to bid on economic stimulus projects south of the border that would otherwise be subject to made-in-the-USA restrictions. It also affords Canada a “fast-track” approach to solving future disputes arising from Buy American clauses on public spending.

The Conservatives are boasting that it will “preserve and create Canadian jobs,” although the doling out of US stimulus project funding ended less than two weeks after the deal was struck.

There’s no guarantee that a single job in Canada will result from this agreement, but it may have severe consequences for workers by preventing governments from managing and directing public spending projects in the future.

In exchange for access to US stimulus funds, provinces, territories and many municipalities may now become parties to the World Trade Organization Agreement on Government Procurement (GPA). This would be the first instance of sub-national governments in Canada becoming party to a major multilateral international trade agreement.

All Canadian companies get in return is the chance to bid on publicly funded construction and infrastructure projects in 37 US states on par with companies in the EU, Japan, Korea, Singapore and many others.

And by signing on to the WTO, municipal and provincial governments open themselves up to the same level of ruthless global competition when the time comes to spend public funds on big-ticket infrastructure and supply projects at home. These lucrative contracts are huge economic drivers and often create thousands of local jobs, return millions in tax revenues and promote regional economic development.

Up for grabs
Local content rules, environmental regulations and safety standards are all up for grabs under the WTO rules, which would limit the ability of government and citizens to control how tax dollars are best spent.