The White House is expected to exempt Canada from a provision in the US stimulus package that gives priority to American-made products used in public works projects, CBC News reported on Tuesday. In return Ottawa will offer US companies guaranteed access to procurement contracts awarded by provincial and municipal governments, the Canadian Broadcasting Corp reported on its website, citing Canadian government sources.
The so-called "Buy American" provision, which favours US-made steel, iron and other manufactured goods in taxpayer-funded building projects, has proved a sore spot in relations between the two countries for months. Canadian companies have complained the provision is protectionist and shuts them out from large US contracts.
Prime Minister Stephen Harper discussed the issue with US President Barack Obama during a visit to Washington last week. Obama used the occasion to declare there was no prospect of a trade war between Canada and its largest trading partner, the United States.