Working Papers

The Short-Term Effects of CETA on Municipal Procurement in Canada [Draft Working Paper] by Dmitry Lysenko, Elizabeth Schwartz, and Saul Schwartz
The Comprehensive Economic and Trade Agreement (CETA), the recently ratified agreement between Canada and the European Union, is the first international trade agreement that grants access to government procurement markets in Canadian municipalities. Will the agreement lead to major changes in the policies and procedures of Canadian local government procurement authorities? The magnitude of the impact depends on how the current practices of municipalities differ from those that will be required under CETA. We focus on large Canadian municipalities and build our arguments based on in-depth interviews, analysis of legal and policy documents, and the econometric analysis of data on municipal contracts. Our conclusion is that CETA will not greatly affect process or outcomes, at least not in the next few years. With minor exceptions, these markets are already open to EU firms. In the long-term, CETA’s government procurement provisions may stimulate investments of EU companies in the Canadian market because they eliminate some uncertainty. But they also may limit the ways in which cities can effect social procurement, defined as the use of government purchasing for social purposes. Another conclusion is that any home bias in municipal government procurement will not be eliminated by non-discrimination provisions in trade agreements. Rather, the relative absence of non-local contract winners is related to other difficulties faced by businesses – to how business is conducted and regulated in Canadian municipalities – that are not covered in trade agreements. (English)

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