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

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

3 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.

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

5 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. DRAFT5

6 Disrupt North America’s highly- integrated 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 Consequences of Local Preferences

7 Trade Supports Jobs  Jobs supported by Canada-US trade – 8 million jobs.  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 30,000-70,000 70, , , ,000 > 200,000

8 Globalization and Integrated Supply Chains  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.  In many sectors, local, state, and provincial governments are the primary purchasers. We need commitments to maintain and strengthen supply chains.

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

10 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.

11 Case Study: Water Infrastructure $2.1B US trade surplus with Canada in the water/wastewater sector. Many companies in this sector are small- and medium-sized businesses.

12  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. Case Study: Water Infrastructure

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

14 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

15 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.

16 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.

17 John F. Prato Consul General of Canada in New York THANK YOU