Powerful U.S. Congress group accuses Canada of trade protectionism under guise of national security

Canada's already troubled trade relationship with the United States is about to take another hit.

A powerful bi-partisan group in the U.S. Congress is accusing Ottawa of unfairly favouring domestic companies when it hands out large IT contracts by citing national security concerns.

The Canadian government's big offensive demand in the on-going trade negotiations with the United States and 11 other countries that border the Pacific is that the Obama Administration exempts Canada from protectionist "Buy America" provisions that shut out Canadian firms from big public works projects in the U.S.

However, a letter from Congress' bi-partisan High Tech Caucus to the lead U.S. trade negotiator in the Trans-Pacific Partnership talks alleges that Canada is equally guilty of protectionism by blocking major American tech companies like Oracle, Microsoft and Google from winning big government contracts.

The letter... claims Canada has increased the number of federal government Requests for Proposals involving "national security exemptions" and requiring IT vendors who bid for projects to keep all or a portion of the data within Canada...

The letter... also blasts the European Union and Brazil for erecting barriers to cross-border data flows and enacting "discriminatory protectionist policies that will undermine the ability of American companies to compete fairly in the market-place".

The Americans are calling foul on the use of the national security exemption for major government IT contracts, while Canadian companies like CGI Group and Blackberry are free to bid on U.S. contracts...

Calls for action against Canada will further complicate a trading relationship with the United States that is already facing a number of other irritants...

Elsewhere, Buy America protectionism continues to be a major concern for Canadian manufacturers and exporters. Canada received an exemption from those provisions when they were applied to the stimulus spending under the American Recovery and Reinvestment Act. But that deal lapsed in September and there have been no bilateral talks since.

Increasingly, U.S. appropriation bills allow state and municipal governments to source suppliers locally – a move permissible under the NAFTA but one that Canadian negotiators are hoping to open up at the Trans-Pacific Partnership negotiations...

This has been excerpted from the 16 December 2013 article by John Ivison for the National Post, and is available in its entirety at
http://fullcomment.nationalpost.com/2013/12/16/john-ivison-powerful-u-s-congress-group-accuses-canada-of-trade-protectionism-under-guise-of-national-security/ (subscription may be required)