The U.S. and Canadian federal governments announced Friday that they have reached an agreement to allow Canadian firms to bid on American stimulus projects. In return, the Canadian provinces have agreed to open their contracts to bidding from U.S. contractors. The news has been welcomed by some of Maine's largest industries.

Almost a year ago, at the urging of the White House, the U.S. Senate softened a so-called "Buy-American" provision in the $900 billion stimulus bill it passed. It stipulated that any government contracts comply with World Trade Organization rules, and required public buildings or public works projects funded by stimulus dollars to use iron, steel, and manufactured goods produced in the United States.

Business and trade organizations, such as the Associated General Contractors of America, complained that the Buy American provision was burdensome and confusing to contractors, engineers, and the cities and towns that have been using Recovery Act dollars to invest in drinking water and wastewater infrastructure.

"The impact of the Buy American provision was felt with water and wastewater projects that were funded by so-called ARRA -- or stimulus package," says John O'Dea, CEO of the Maine branch of the Associated General Contractors of America.

"One of the big holdups was components: valves, filter media, different pieces that you would normally have in a water or wastewater system," O'Dea says. "Storm grates were another one. And in each instance where the part wasn't available there was a lengthy process to find an acceptable alternative. And so that Buy American requirement, while laudable, was having the effect of slowing down the speed with which some of the stimulus money was able to go to work."

The United States has agreed to provide Canadian suppliers with access to state and local public works projects in a range of programs funded by the American Recovery and Reinvestment Act of 2009.

In return, Canada has agreed to provide U.S. suppliers with access to a range of construction contracts across Canada's provinces and territories, as well in as a number of municipalities. In the past, U.S. contractors could bid on projects for the Canadian government proper, but not for individual provinces. That news was announced on Friday by the office of the United States Trade Representative, and the Canadian Trade Minister.

"Over the last year, what we have seen were a number of restrictions being put in place that excluded Canadian companies from large procurement contracts, mainly at the municipal level, in the United States," says Jayson Myers, the CEO of the Canadian Manufacturers and Exporters Association.

"It was certainly causing problems for Canadian companies, but it was also causing a lot of problems for American companies and American jobs," Myers says. "American suppliers to Canadian companies were losing business as those Canadian companies could no longer get access to major procurement markets in the United States."

The U.S. Chamber of Commerce is in favor of the deal, and the United Steelworkers of America issued a statement of approval, stating that members of its union, which includes workers in both countries, "should have new job opportunities." The union says that "at this time of continuing economic crisis, that's the most important thing."

Calls to the U.S. Business and Industry Council were not returned by airtime.