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Local Economy vs. Free Trade Agreement

Posted 5/22/2018

The Canada Free Trade Agreement mandates open procurement across Canada

This and the pending Canada-European Trade Agreement (CETA) mandate access to all government procurements to all parties to the agreements. Some that advocate for social responsibility and local economic sustainability in municipal and regional government procurements are concerned that local jobs will be lost and resources exported elsewhere.

I see opportunities to enhance local economies, social and environmental responsibility through co-ordinated procurement strategies. It begins with alignment of economic, social and environmental objectives with organizational policy, procedures and operations. In other words: make the commitment and follow through.

Free(er) trade is not a bad thing. While it allows non-local firms access to your market, it also allows local firms access to other, distant markets. A positive outcome could be greater specialization, innovation and productivity in different markets which can be good for trade and both the macro and micro economies.

Local and regional governments could through their procurement strategies seek out local industries that show promise and contract with them to supply goods and services required by those governments. Those contracts could lead to more innovation, capital investment and enhanced productivity of those local firms. Those same local firms could be more receptive to social responsibilities as they are well integrated into the local communities and economy already.

Similarly, non-local suppliers could be persuaded to step up for local economic development and social responsibilities as well.

Ask.

Look to the procurement selection criteria and relative weighting of each. Is your organization willing to forgo lowest price for best value that incorporates social and environmental objectives? You must be seen to be fair, open and transparent in setting the criteria and provide clarity in your requests concerning those criteria and the selection processes. Involve your legal and procurement professional team with your internal specifying departments. The effort spent to research, plan, train and work with potential suppliers will return social and economic benefits to your community, our environment and a healthy future for generations to come.