OTTAWA (Reuters) – Canada has told the Biden administration it might limit U.S. companies’ ability to win Canadian procurement contracts if Washington brings in tougher “Buy American” rules, the Canadian finance minister said on Thursday.
In a bid to boost domestic manufacturing, President Joe Biden wants to strengthen provisions that apply to about a third of the $600 billion in goods and services the U.S. federal government buys annually.
Canada made clear in January it would seek exemptions, given the close integration of the two economies. Many American companies have Canadian suppliers that risk losing business depending on how tightly the new rules are applied.
“When it comes to Buy American, it’s important for the United States to understand that procurement is a reciprocal relationship,” said Finance Minister Chrystia Freeland, who met U.S. Treasury Secretary Janet Yellen on Tuesday.
U.S. companies, Freeland said, did about C$1 billion ($808 million) a year in business with Canada’s government, which has adopted what it calls a reciprocal procurement approach.
“What Canada is saying to our partners, is our procurement opportunities will be open to your companies, just as much as your procurement opportunities are open to ours. And that is something that I discussed with the secretary of the Treasury,” Freeland told a televised news conference in Washington.
Disputes over Buy American provisions are not new. In 2009, Congress included a similar mandate in an economic stimulus act, which hit Canadian firms.
Months later, in 2010, the two nations struck a deal, but Canadian companies complained that many of the U.S. public works contracts had been locked up by then.
Freeland’s office did not respond when asked whether she had intended to give Yellen a warning. The U.S. Treasury did not immediately respond to a request for comment.
($1 = 1.2375 Canadian dollars)
(Reporting by David Ljunggren; Editing by Peter Cooney)