Expanding Government Procurement Opportunities in Canada and the

Expanding Government Procurement Opportunities in Canada and the US CSG/ERC Canada-US Relations Committee August 7, 2011 1

Bedrock Principle of Procurement Getting the “best value” for Canadian and American taxpayers by enhancing competition. 2

Best Value / Best Practices § To obtain “best value” for tax dollars, many States have adopted laws to promote transparency, fairness, and competition in procurement. § Organizations such as ABA, NASPO and NIGP have long supported “best value” principles along with transparency, fairness, and competition. 3

Balancing Competing Interests Can governments secure “best value” for taxpayers at the same time as promoting local economic/social development? 4

Resolving the Policy Debate § Local procurement or competition/greater market access. § Strengthening local economies through supply chains and access to global markets. § Helping SMEs to compete globally and remain the lifeblood of local economies. DRAFT 5

Consequences of Local Preferences Disrupt North America’s highlyintegrated supply chains; make US and Canadian companies less competitive globally; and can lead to: Increased project costs Delays in project start-ups Retaliatory protectionism that could further disrupt trade and create job losses 6

Trade Supports Jobs Ø Jobs supported by Canada-US trade – 8 million jobs. Ø Canada is the most important export market for 35 of the 50 States. We are each other’s first export markets for small- and medium-sized businesses. < 30, 000 -70, 000 -125, 000 - 200, 000 > 200, 000 7

Globalization and Integrated Supply Chains Ø Integrated supply chains continue to emerge and grow. We already make things together for the private market. Companies want to expand to the public market. Ø In many sectors, local, state, and provincial governments are the primary purchasers. We need commitments to maintain and strengthen supply chains. 8

“We Make Things Together” Our unique integrated trade relationship requires a unique response to procurement 9

Benefits of Market Access § Access to Canadian markets at the national and subnational level offers major benefits for the US. § $6. 7 billion in US exports are destined to all levels of government in Canada – $5 billion to provinces and municipalities. § $11. 5 billion worth of Canadian goods are in inputs by US governments, $8. 1 billion bought by State and local governments. 10

Case Study: Water Infrastructure $2. 1 B US trade surplus with Canada in the water/wastewater sector. Many companies in this sector are small- and medium-sized businesses. 11

Case Study: Water Infrastructure § The water/wastewater infrastructure sector illustrates not only the importance of our trade relations but also just how integrated the supply chain is. § Salem County, NJ: An example of the intended consequences of Buy American. § Both Canadian and American companies are delivering goods and services to ensure the highest level of public health and safety on both sides of the border. 12

Canada-US Agreement on Government Procurement Addressing the unintended consequences of Buy American Ø Canada-US Agreement on Government Procurement, February 2010. Ø Three major “win-win” components and signals both countries are committed to open markets. 13

Canada-US Agreement on Government Procurement A commitment to enter into discussions with a view to exploring a long-term government procurement agreement between Canada and the US 14

Strengthening Government Procurement § Barriers: High thresholds and exclusions remain. § Local governments are not subject to trade agreements. § Confusion about what contracts companies can compete for. § 13 States not signatories to the WTO’s GPA provisions. 15

What State & Provincial Government Officials Can Do § Talk to economic development, international trade, and procurement colleagues about the benefits of competition. § Encourage a CSG National resolution supporting increased federal-state engagement on expanded market access for sub-federal procurement. § Contact USTR to learn more about how States can be advocates for expanded market access. 16

THANK YOU John F. Prato Consul General of Canada in New York john. prato@international. gc. ca 17