Monday, July 11, 2011

Best Kept Secret in International Trade – The U.S. Federal Government

There is a tremendous opportunity for Canadian companies to sell to the largest customer in the world…the U.S. Federal Government.  Canadian companies are treated like a U.S. company when selling to the U.S. federal government.

Here’s what you need to know.


1933 Buy American Act


The Buy American Act applies to all U.S. federal government agency purchases of goods valued over the micro purchase threshold, but does not apply to services. Under the Act, all goods for public use (articles, materials, or supplies) must be produced in the U.S., and manufactured items must be manufactured in the U.S. from U.S. materials. Many states and municipalities include similar geographic production requirements in their procurement legislation.


The Buy American Act, Buy America, NAFTA and the WTO GPA

Canada is a signatory to the World Trade Organization GPA at the sub-federal level.  This means that Canadian goods and supplies are treated on equal footing with respect to U.S. domestic companies in addition to maintaining existing free access at the federal level.  Also, under NAFTA, the U.S. requires that Canadian goods and suppliers enjoy equal footing with respect to U.S. domestic companies.

Bottom Line

Canadian companies can sell to the largest customer in the world as if they were a U.S. company.


 The U.S. federal government is the largest purchaser of goods and services in the WORLD, spending over $580 Billion annually (not including the$787 Billion stimulus package). The U.S. federal government buys literally everything. 60% of what they buy are services and 40% of purchases are products. The products range from toothpaste to office supplies and artillery. They also need the services of nurses, priests, hairdressers and IT professionals. For Canadian companies selling to the U.S. federal government is a way to export to a customer who must pay by law within 30 days. 


About the Author

Chip Ellis is president of the International Association of U.S. Government Contractors ( IA U.S. GC mission is to enable and educate small business owners around the world on how to win U.S. federal government contracts without the red tape or needing  expensive government consultants. For more information and to contact IA U.S. GC, please visit or call 202-355-7747

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