Canada shut out of Iraq contracts
RICK WESTHEAD
The Pentagon yesterday banned Canadian companies from bidding for contracts worth $18.6 billion (U.S.) to help reconstruct Iraq because of Canada's opposition to the U.S.-led war in the Persian Gulf nation.
Also prevented from bidding for the prime contracts are companies from France, Germany and Russia.
U.S. Deputy Defense Secretary Paul Wolfowitz revealed the news in a memorandum that limits competition for the contracts to rebuild Iraq's electrical, transportation and oil sectors, among others, to the 63 countries that supported the U.S. invasion and occupation of Iraq.
The memo justifies banning Canada and others by saying the move is "necessary for the protection of the essential security interests of the United States to limit competition for the prime contracts of these procurements to companies from the United States, Iraq, coalition partners and force-contributing nations."
The directive doesn't specify why allowing Canadian companies to bid would hurt American security interests. Canadian business officials who have worked in the Middle East have suggested contracts would probably be offered as a reward to those that participated in the war and subsequent occupation.
The contracts cover about 26 major projects and will be awarded for the most part by the State Department, the U.S. Agency for International Development and the Army Corps of Engineers.
Canada would still be eligible to work in Iraq as a subcontractor of one of the prime contractors, said Major Joe Yaswa, a spokesperson for the U.S. Department of Defense.
"We have very tight relations with Canada," Yaswa said. "Canada is actively participating in Afghanistan, which is all of one country over."
Like Germany and France, who both are allies of the United States in NATO, Canada decided not to provide troops for an invasion that toppled Iraqi dictator Saddam Hussein.
A spokesperson for the Ministry of Foreign Affairs and International Trade wasn't available for comment.
Countries whose companies are allowed to compete for contracts include: Australia, the United Kingdom, Poland, Italy and Japan. Even countries such as Uganda, Morocco and Afghanistan are on the list. While they didn't all send troops to Iraq, their leaders back U.S. policy there.
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And the follow-up...
Canada threatens to stop aid to Iraq
MARTIN O'HANLON
Paul Martin says he can't "fathom" an American decision to bar Canadian firms from bidding on reconstruction contracts in Iraq and he will take up the matter with the U.S. ambassador.
Martin, who becomes prime minister Friday, said the decision to exclude countries that opposed the American-led invasion of Iraq is flawed.
"I understand the importance of these kinds of contracts, but this shouldn't be just about who gets contracts, who gets business," he said today. "It ought to be what is the best thing for the people of Iraq."
Martin said Canada has committed nearly $300 million for reconstruction in Iraq and that Canadian troops in Afghanistan "are carrying a very, very heavy load" in the war on terrorism.
"I will certainly be discussing this with the ambassador and then we will see."
Deputy Prime Minister John Manley went a step further, suggesting Canada may cut its aid to Iraq.
"It would be difficult for us to give further money," Manley said from Paris where he was attending a state banquet in honour of retiring Prime Minister Jean Chrétien.
"To exclude Canadians just because they are Canadians would be unacceptable if they accept funds from Canadian taxpayers for the reconstruction of Iraq."
Other countries also slammed the snub. Germany called it "unacceptable," France questioned its legality, and Russia issued an implicit threat that it might take a harder line on restructuring Iraqi debt as Washington has been seeking.
The directive from U.S. deputy defence secretary Paul Wolfowitz limits bidders for 26 lucrative contracts worth $18.6 billion (U.S.) to firms from the United States, Iraq, their coalition partners and other countries that have sent troops to Iraq.
Countries that did not sent troops would be eligible for subcontracting work in Iraq.
The order says restricting contract bids "is necessary for the protection of the essential security interests of the United States."
White House spokesman Scott McClellan dismissed criticism, saying the policy is "appropriate and reasonable."
"Prime contracts for reconstruction funded by U.S. taxpayer dollars should go to the Iraqi people and those countries who are working with the United States on the difficult task of helping to build a free, democratic and prosperous Iraq."
He said countries that want to be eligible for a slice of the $18.6 billion can do so by participating militarily.
They can also vie for contracts being financed by a separate international fund that the White House estimates will be worth $13 billion (U.S.), he said.
Germany denounced the decision, calling it "unacceptable," while Russia issued an implicit threat that, in response, it would take a harder line on restructuring Iraqi debt as Washington seeks.
"We noted with astonishment today the reports and we will be speaking about it with the American side," German Foreign Minister Joschka Fischer said after talks with his Russian counterpart, Igor Ivanov.
The ruling, posted on a Pentagon Web site Tuesday, bars companies from France, Germany, Canada and Russia from bidding on those contracts because their governments opposed the American-led invasion that ousted Saddam Hussein.
In Paris, Foreign Ministry spokesman Herve Ladsous said that France had "taken note" of the Pentagon's decision and was studying whether it follows international law.
"We don't want to make any commentary at this stage," Ladsous said. "We are studying these decisions' compatibility with international competition law, in liaison with our partners, notably the European Union and the (European) Commission."
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So, if we don't get to bid on the contracts, we'll punish the Iraqis for it.
Dave.
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Will USA fight three wars ? 
