Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/50882
and states were not covered. Since the 2010 agreement between the U.S. and Canada to deal with the issues of the Buy American Act, Todgham Cherniak says that her cli- ents are still encountering lingering issues. "I have talked to actual real companies, which find this to be an issue," noting one company was recent- ly asked to remove its product from a completed project "under the guise" of the Buy American program. Even more recently, she was retained by a business to draft a contract on a project that asked to conform to the Buy American rules. "We had to revise that clause to state the correct situation that this par- ticular contract was exempted from the Buy American provisions. But you had a local government that had inserted this clause into a contract thinking that they were supposed to do it." The McMillan lawyer has also heard from clients in the steel indus- try that there is a "chill effect" as a result of the Buy American introduc- tion. "Companies wanting to comply with U.S. law . . . because the fines are so high, they don't want even the air or even the appearance of doing what they are not supposed to do which causes a chill rippling into Canada." Rather than solve and simplify the issues involved with international gov- ernment procurement, new agreements — the U.S.-Canada 2010 deal as well as the current EU-Canada trade talks — are adding another layer of complex- ity for potential suppliers as well as government buyers rather than making international government procurement clearer. "It has gotten increasingly com- plex. The devil is in the detail in all these agreements," says Swick. "If I am in-house counsel and I'm looking to sell to the government and I am won- dering what they are doing is offside, I would apply three tests first to any contract that I am looking at," she says. In-house counsel first need to iden- tify what level of government the bid is dealing with. The level of government or public entity that the vendor is tar- geting will determine which trade com- 28 • JUNE 2011 INHOUSE cial market), and the still-unfinished EU-Canada trade deal. Those three have been added to the WTO-AGP, NAFTA's Chapter 10, the Canadian Agreement on Internal Trade (1995), and other regional international trade agreements. Swick has found that she needs to mitments apply to that government body. Second, a seller needs to discover whether the contract value is above the give regular seminars on the topic of international (and domestic) govern- ment procurement to inform govern- ment buyers what their obligations are and to businesses trying to sell to gov- ernment because the subject is so com- plicated and the financial stakes are so high. When it comes to potential bid- ders, they should not only know going in which relevant trade agreements cover any potential tender, they should know what their recourse is should they believe that they were unfairly treated in the process. "Resorting to Sometimes the trade agreements provide for very effective remedies which you can pursue without having to go to court. BRENDA SWICK, McCarthy Tétrault LLP designated monetary threshold to be considered covered by a trade agree- ment. Third, is the level of government or public entity included in the inter- national trade agreement? Swick adds a fourth question for potential bidders: Are the goods or services requested subject to a relevant trade agreement? In presentations, Swick routine- ly describes the various agreements as a "spaghetti bowl" of trade agree- ments that is now up to seven separate strands. They include three new ones: the Canada-U.S. agreement on govern- ment procurement (2010), the New West Partnership Trade Agreement (an accord between the governments of British Columbia, Alberta, and Saskatchewan that creates Canada's largest, barrier-free, interprovin- filing a claim for damages against a government, your customer that you are trying to sell to, is never ideal if you think the government is offside," she says. "Sometimes the trade agreements provide for very effective remedies which you can pursue without having to go to court." While attention is now focused on what will come out of the trade nego- tiations with Europe, the long-term impact of the 2010 U.S.-Canada inter- national government procurement trade accord has been passed seemingly with very little comment or contempla- tion on the part of Canadian govern- ment purchasers and businesses The compromise settlement gives U.S. suppliers the very thing EU nego- tiators covet most: securing guaranteed