Buy American, A Preference, Not Protectionism

It reads:

SEC. 1110. USE OF AMERICAN IRON AND STEEL.

     (a) In General- None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States.

     (b) Exceptions- Subsection (a) shall not apply in any case in which the head of the Federal department or agency involved finds that--

           (1) applying subsection (a) would be inconsistent with the public interest;

           (2) iron and steel are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or

           (3) inclusion of iron and steel produced in the United States will increase the cost of the overall project by more than 25 percent.

     (c) Written Justification for Waiver- If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b), the head of the department or agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived.

     (d) Definitions- In this section, the terms `public building' and `public work' have the meanings given such terms in section 1 of the Buy American Act (41 U.S.C. 10c) and include airports, bridges, canals, dams, dikes, pipelines, railroads, multiline mass transit systems, roads, tunnels, harbors, and piers.

Yet from Davos to Ottawa to Seoul to Washington, this smacks of protectionism and must be stricken. Even the President seems to thinks so. From Marc Ambinder:

   CHARLES GIBSON: A couple of quick questions. There are "Buy America" provisions in this bill. A lot of people think that could set up a trade war, cost American jobs. You want them out?

   PRESIDENT OBAMA: I want provisions that are not going to be a violation of World Trade Organization agreements or in other ways signal protectionism. I think that would be a mistake right now. That is a potential source of trade wars that we can't afford at a time when trade is sinking all across the globe.

   CHARLES GIBSON: What's in there now? Do you think that does that? Do you want it out?

   PRESIDENT OBAMA: I think we need to make sure that any provisions that are in there are not going to trigger a trade war.

These "Buy America" provisions are not tariffs and do not alter any of the various free trade agreements currently in force. The provisions articulate a sound public policy goal, the creation of high-paying jobs in America's foundries and steel mills. This bill is, after all, an American fiscal stimulus bill not one to spur the economies of China, South Korea, Brazil or Luxembourg.

Since 1982, US steel and iron producers have had preferences in federal highway and transportation projects, although exceptions to use foreign materials are granted under certain conditions including cost and the need for specialty steels. These preferences would be extended to all infrastructure projects in the House version of the American Recovery and Reinvestment Act from fixing schools to modernizing the electric grid and repairing water systems.

Senator Byron Dorgan (D-North Dakota) has included an even broader measure in the Senate version of the bill that would require that all materials and equipment used in the projects be US-made.

But major US export-oriented manufacturers, including GE and Caterpillar, are lobbying against the measure, warning that foreign nations will raise trade barriers, hurting their exports. Sure enough, the European steel confederation Eurofer called earlier for Brussels to tackle Washington over the issue at the World Trade Organization. But as Thomas Gibson, president of the American Iron and Steel Institute, a trade group, notes that the preferences for US steel- and iron-producers in federal transportation projects have been on the books since 1982 without leading to a major trade war.

I am hoping that when the decision is made, it's the Vice President who is the last man in the room.

"I don't view that as some of the pure free-traders view it, as a harbinger of protectionism," Biden told CNBC. "I don't buy that at all. So I think it's legitimate to have some portions of Buy American in it."

This is not protectionism, we are not revising tariffs nor requiring that US steel be used. It simply states a goal that reflects the desired social and economic utility for the nation, creating jobs.

Tags: American Recovery and Reinvestment Act, Buy America Act, free trade, protectionism (all tags)

Comments

11 Comments

Re: Buy American, A Preference, Not Protectionism

Yet ironically many of the other countries are looking at protectionism out right. It is also ironic because we are talking about tax payer dollars rather than private entities. One would say that there should not be a free flow of capital in the form of public dollars to other countries. We should not be propping up other economics when they are doing nothing except helping increase our debt. It's very screwed up. We go into more debt trying to bring our economy out of recession, and they give us the money that we gave them in the form of buying their products. So we are in essense double paying them. I know that's not true , but that's how it feels.

by bruh3 2009-02-03 10:14PM | 0 recs
Re: Buy American, A Preference, Not Protectionism

The federal government SHOULD be buying American. It's the fucking federal government! Nobody's forcing the private sector to use American-made goods. Hell, nobody's even pressuring them anymore. This clause is good. You certainly wouldn't see this sort of uproar if there was a provision to make sure that service jobs weren't outsourced.

by vcalzone 2009-02-03 10:25PM | 0 recs
Re: Buy American, A Preference, Not Protectionism

Let me remind you one thing. As a great proggresive thinker, Charles E. BEARD, once said: protectionism is "in the business of protecting their business from foreign competition". Great democrats such as president Woodrow Wilson and Roosevelt´s Secretary of State, and also known as the father of income taxes, hates protectionism, in any form (buy American clauses, tariffs, etc.) because it was the main source of monopolies, of privileges for some corporations under the disguise of "it is for the American workers". It is not, it is for the corporate lobby of steel, for steel stakeholders to make more and more profits.  Protectionism is anu government measure that gives priority to local producers, and its perverse effects is the reason why Wilson, FDR and every proggresive democrat used to hate it.

by aparicio 2009-02-04 01:14AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

correction: Roosevelt´s Secretary of State was Cordell Hull, a democrat among democrats.

by aparicio 2009-02-04 01:15AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

Utter crap! The federal government is spending it's money as it sees fit. This bill doesn't forbid or penalize any private individual or company from buying foreign steel. If I buy an American car, is that protectionism? It's my money.

Now nonsense like this is starting a trade war.

by antiHyde 2009-02-04 04:19AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

Hmm after reading the position I see where it could violate trade agreements.

by MNPundit 2009-02-04 04:56AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

explain.

by bruh3 2009-02-04 05:44AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

I also read that it could violate trade agreements. Obama's comments sound perfectly reasonable to me.

by Lolis 2009-02-04 08:20AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

OK.  I'll bite- please explain.

by orestes 2009-02-04 10:12AM | 0 recs
Re: Buy American, A Preference, Not Protectionism

Yeah. You could buy and American car, and it is your money. But if you signed previously contract saying that you would not prefer to buy under the only consideration of where the car is made, you would still be able to do it, but you would hake your contract obligation.

US governmente signed GATT in 1947, and WTO Agreement in 1994, both under democratic presidency, and therefore it compromised itself not to discriminate between national and imported productos coming from WTO member countries. It does not matter how you do it.

Protectionism is any measure that gives preference to a certain local producers against foreigners. Good or bad, that is another discussion, but it what it is.

And normally, those protectionist measures have benefit corporations, not workers. And also tend to cause trade wars. That is why proggresim was born free-trader

by aparicio 2009-02-04 06:20AM | 0 recs
Very Hooveresque

Read Smoot Hawley Tariff of 1930
http://en.wikipedia.org/wiki/Smoot-Hawle y_Tariff_Act
by Classical Liberal 2009-02-04 12:04PM | 0 recs

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