OTTAWA — A new government procurement agreement signed by Canada and the U.S. softens somewhat the impact of the protectionist "Buy America" clause imbedded in the U.S. Economic Recovery and Reinvestment Act of 2009.

The deal, which was signed by Canadian Minister of International Trade Peter Van Loan, gives companies on both sides of the border access to government procurement contracts below the federal level.

Under the agreement, which goes into effect today, the countries agreed to permanently give reciprocal treatment in the Canadian territories and provinces and 37 U.S. states covered by the WTO’s procurement agreement.

Canadian suppliers would receive access to state and local public-works projects in seven stimulus programs on a temporary basis through September 2011, when Recovery Act funds are set to expire.

U.S. suppliers would also get temporary access to a range of construction contracts in some Canadian provinces and municipalities not covered by the WTO pact.

Some Canadian business groups have complained about the limited access to U.S. stimulus, with the seven programs only accounting for $18 billion out of the $787 billion in stimulus spending. Even then, they can only access projects worth more than $7.8 million in which contracts haven’t been awarded.

The two countries also agreed to start talks within a year to explore expanding the procurement deal, though the U.S. official said there was no "preconceived notion" about what that would entail.