A great apostle of free trade, Canada wonders today whether it might not be too naive in this matter and whether the time might not have come to move closer to a logic of give and take, particularly with its American neighbor. .
“Canada is a trading nation [qui valorise] fairness, openness and transparency,” said Canadian Finance Minister Chrystia Freeland when launching a public consultation process on the issue at the end of March. In fact, he believed so much in the virtues of free trade that when awarding public contracts, in particular, Ottawa “grants foreign suppliers, goods and services greater access to federal contracts than is strictly required under its free trade agreements” and its commitments to the World Trade Organization (WTO), we observe in the document in question.
But not all of Canada’s trading partners show the same openness in this area, we note. “In some cases, countries have [même] recently introduced new restrictions that further limit access to their government procurement markets for Canadian suppliers and goods. This is particularly the case of the United States, which accompanied its most recent infrastructure plan of 1000 billion US dollars with “new Buy America national content requirements [qui] adversely affect access for Canadian suppliers”.
Give and take
Also, Ottawa is now wondering if it would not be better to apply a logic of “reciprocity” from now on. He explains that this could consist of opening its public markets only to the extent “strictly required” in its trade agreements, or opening its market more or less to foreign suppliers depending on the degree of openness of their own country. These new rules could also apply to provincial public contracts benefiting from federal subsidies.
We could also take advantage more systematically of the fact that all of Canada’s trade agreements (except the one with the European Union) allow contracts to be reserved for small businesses in the country.
“What we’re saying today is that if you unfairly limit the access of Canadian companies to your procurement markets, Canada will ensure that you receive the same treatment here,” Chrystia Freeland explained when launching the consultations which must continue until the end of the month.
When we ask its former Department of International Trade the importance of public contracts awarded in Canada to American companies, and vice versa, we are referred to official American statistics dating back to 2015. We see there that American companies had obtained for US$1 billion in Canadian government public contracts that year, compared to Washington’s US$624 million to Canadian companies. Nothing was said about procurement by lower levels of government.
Change of direction
The fact that a country usually as zealous as Canada in terms of free trade and multilateralism is considering a more nationalist and accountable approach to its trade relations does not shock Geneviève Dufour, professor of international economic law at the University of Sherbrooke. . “It doesn’t shock me at all,” she said. I would even say that it is rather good news, and probably the sign of reaching a certain maturity. »
Free trade is far from being the rule when it comes to public contracts, she points out. “It has long been said that it is much more a lack of political will than questions of law that prevents Canada from seeking to favor a little more its own businesses, the security of its supplies, the achievement of environmental objectives or compliance with certain labor standards. And then, “Donald Trump, protectionism during the pandemic and Joe Biden’s new stimulus programs are just the latest proof that you should never trust the United States too much”.
Ottawa is not alone in asking itself this kind of question. Having more and more the impression of being taken in by the United States, China or even Brazil, the European Union is also exploring the idea of requiring reciprocity from now on. The Government of Quebec, for its part, is studying Bill 12, which would allow Quebec departments and other public bodies not only to follow the rule of the lowest bidder in the awarding of their contracts, but also to take into consideration other factors, including local business development.
For the moment, calls for tenders from public authorities in Quebec rarely include conditions related to the country of origin of the bidding companies, observes Nicholas Jobidon, professor of public procurement law at the National School of Public Administration. “We feel that the concern is above all to obtain the best possible price. »
And then, the mere fact that these calls for tenders are in French already exerts a sort of natural barrier to competition from outside Quebec. “That’s probably enough to remove any interest that, for example, an Ontario company might have had for the Terrebonne snow removal contract. »
real consultation
The questions that Canada is asking itself today do not mean that it is turning its back on free trade or multilateralism, of which it remains one of the great defenders, particularly at the WTO, specifies the professor of international economic law at Laval University, Richard Ouellet. However, they mark the end of a certain “naivety”. They are also part of a new trend, known as the “WTO of clubs”, where, failing to convince everyone to comply with the same rules, subgroups of countries are setting up trade regimes individuals.
“Public procurement is the area where governments can make such changes the easiest and fastest, because they are the ones giving out the contracts. But we could extend this approach to other areas”, notes the expert, in order to better take into account factors such as the fight against climate change, national economic security or public health.
“Contrary to most public consultations, I have the impression that the opinion of the federal government has not yet been decided on the question,” said Richard Ouellet. What happens next will depend on what he hears. »