'Buy American' clause creates conflict
A "Buy American" clause in President Obama's economic stimulus proposal would require infrastructure projects to use U.S. raw materials, like steel. The clause has created a gap between free-market supporters and manufacturers looking to protect domestic industry. John Dimsdale reports.
Label with U.S. flag and "Made in the USA" (iStockPhoto)
More on America's Financial Crisis
TEXT OF STORY
KAI RYSSDAL: As I mentioned earlier, after a day full of debate the House passed the president's economic stimulus package late this afternoon -- 647 pages, $816 billion, according to the Congressional Budget Office, including a provision that you get to on Page 12. It says the thousands of new infrastructure projects to be funded with all that money have to use American-made raw materials. Materials like steel. It's not the first bill to have a "Buy American" clause in it. But it has become an early test of the Obama administration's trade policies. Our Washington bureau chief John Dimsdale reports.
JOHN DIMSDALE: The administration hopes to reverse the economic tailspin by creating 2.5 million public works jobs. Those workers would build or repair bridges, schools and sewage systems. But a group of U.S. manufacturers says if those projects aren't built with domestic steel and concrete, not all those new jobs will be filled by Americans.
SCOTT PAUL: You may be inadvertently stimulating the economy of China.
Scott Paul heads the Alliance for American Manufacturing, which supports Buy American. He admits some of the construction materials will be cheaper overseas. He says some of the construction materials would be cheaper from overseas.
PAUL: Our manufacturers are facing a lot of subsidized competition. We have had Buy American laws in effect since the 1930s to guarantee that we have a stable and secure manufacturing base that can provide the steel, the cement, the rubber, glass and bricks we need to build and rebuild America.
Paul says the Bush administration weakened existing Buy American laws and the stimulus package will restore them. But other trade groups are urging Congress to eliminate any domestic content requirements.
Calman Cohen is the president of the Emergency Committee for American Trade that represents companies ranging from equipment makers to aerospace.
CALMAN COHEN: Our workers, producing the products, the services that are in demand overseas will find markets locked to them.
Barack Obama promised to review U.S. trade agreements to make sure workers and the environment were protected from unfair competition. Members of Congress, especially from the Rust Belt, have already responded by introducing laws to retaliate against trade barriers in other countries.
Robert Cassidy, a former Clinton trade official, hopes that under Obama the U.S. will act more in its own economic self-interest.
ROBERT CASSIDY: Economic self-interest means that the government needs to be more assertive. The last administration preferred dialogue over any trade conflict. And so, consequently, there were few trade complaints taken to the WTO.
But free-trade advocates worry about rising protectionism, which they admit is inevitable in an economic downturn, with or without a new administration.
WILLIAM REINSCH: In tough economic times you kind of hunker down and close up. It's always easier to blame the foreigners for your problems, anyway, than it is to blame either yourself or your neighbor.
William Reinsch, the president of the National Foreign Trade Council, is heartened by the fact that, so far, Obama's economic appointees are not anti-trade.
REINSCH: They clearly won't be as ideologically doctrinaire on the free-trade side as the Bush administration was. But the president's economic advisors all have experience in this area, one that supported open markets.
But he says we're only a week into this administration and it has not yet given any clear signals on just how free its trade policies will be.
In Washington, I'm John Dimsdale for Marketplace.
Comments
Comment | Refresh
From washington, DC, 03/13/2009
Yeah, but incuring protectionism overseas would just cause our goods to become more expensive and even without that a true 'buy american' clause would be horrible for the tax payers and the consumers (see the bridge in the 1990s in CA that caused tax payers to pay 400 million additional in taxes because of a 'buy american' clause). Furthermore, this doesn't even force us to buy american, because every country that is a signatory of the WTO GPA or has an FTA with us, and all Least Developed Countries have equal rights when it comes to our government procurement (except in specific areas) - so really this won't help us that much unless you say that avoiding buying from China helps us....
From Cambridge, MA, 01/29/2009
And I hope that buy America also means protecting american workers and penalizing companies that keep outsourcing jobs. Who will be left to buy if jobs are not secured here, on american soil?
From Winston-Salem, NC, 01/29/2009
Who does not want to "buy American"? Seriously, if you don't want that, say so, so the rest of us know who you are.
Are we so blind that we cannot see that "buying Chinese" has been a significant cause of our problems? While any "stimulus" is of questionable value, those $$ must go to American economic activity because that is what creates American jobs, or the end result will be worse.
01/28/2009
BUY AMERICA !!!
IT AMERICAN TAX DOLLAR ..
WE TRY TO PUT AMERICA BACK WORK ...
WE ARE LOSE JOB ABOUT AS FAST BANK ARE Righting OF quarterly LOSSES..
get people back work here in america with american tax dollar is show our love for our country fellow country men
we are america we come together as america in time of need ..THIS THAT TIME.
as soon as we get American people working again they well start spending again they might buy American but if we get them buy you might be surprise..
because in my short life span I found out that what start here has as tends and have ripping effect across world..
I could be wrong as I dont have any those important title or letter behind me .. donot think those letter mean much anyway ..cause you have smart people on your show who wasnot as clued in as me .. I listen to your show most time than not you have very well educated and I interested what you have to say .. you did not even mention failure of iceland ..
in fact nobody has really..
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.