A White House meeting between Canadian Prime Minister Stephen Harper and President Obama on Sept. 16 did not produce an agreement to resolve Canada’s concerns over the American Recovery and Reinvestment Act’s “Buy American” provisions. But Obama said the two sides are trying to find ways to ease the problem. Canada has made a proposal that it hopes will lead to a deal, and the U.S. is evaluating it.

Canada contends that its manufacturers have been harmed by ARRA’s restrictions on non-U.S-made steel and manufactured products in projects financed by the stimulus package. A particular focus is projects administered by states and localities in sectors such as water and wastewater facilities. The U.S. Chamber of Commerce also is worried that the Canadians will retailiate with restrictive moves against U.S. companies.

Canadian International Trade Minister Stockwell Day has written a letter to U.S. Trade Representative Ron Kirk, outlining a proposed solution. It reportedly seeks a waiver for Canada of ARRA’s Buy American provision, in exchange for U.S. access to purchases made by Canadian provinces, territories and major cities for a period of time.

A USTR spokeswoman says, “We are currently studying Canada’s proposal,” but she declined to provide further details.

Obama said “U.S.-Canadian trade continues to be robust....There is no prospect of any budding trade wars between our two countries.” He said Buy American matters “are legitimate issues” but added that they “should not be considered the dominant element of our economic relationship.”

Harper voiced similar views. He said Buy American problems “are important irritants” and “are having some real impacts,” but added that “they are relatively small compared to the overall scale of Canadian-American trade.”