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View Diary: What the polls say about free trade (219 comments)

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  •  well, here's what happened when they tried that: (1+ / 0-)
    Recommended by:
    Mr Robert
    The Obama Stimulus Plan

    When the $900 billion American Recovery and Reinvestment Act (the “Stimulus Bill”) was passed in 2009, it contained this provision:


    (a) 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, steel and manufactured goods used in the project are produced in the United States.

    (b) Subsection (a) shall not apply in any case or category of cases 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, steel and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or

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

    (c) 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) This section shall be applied in a manner consistent with United States obligations under international agreements.”

    The Stimulus plan’s “Buy American” provisions were painted by supporters as a way to insure that the economic benefits of the bill would stay in the US. The Alliance for American Manufacturing argued, “If we're going to try to create American jobs, we need to direct stimulus money to American firms. . . When we're investing hundreds of billions of dollars, tax dollars, into infrastructure, into economic recovery, we want to make sure we're creating jobs in the United States and not in China.”

    In reality, of course, the provision was intended as a protectionist aid for the politically powerful steel industry, and particularly the Steelworkers Union, a key Democratic constituency. American steel factories were running at less than half of capacity, with 40% of their workforce laid off. “What we’re already seeing is that demand is going down,” explained a spokesman for the American Iron and Steel Institute, “but imports of Chinese finished steel is going up because they are subsidizing it. What we’re saying is that this is a stimulus package to promote American jobs. We ought to maximize every dollar in that bill toward that end. If you were building a bridge in West Virginia, you wouldn’t bring in German workers to do it. Materials should be no different.” The Steelworkers Union also sent its members on a series of talks with legislators to win support for the provision. In Ohio, one Union official declared, “Buy American, the whole ideal is that we’re rebuilding the infrastructure of the United States with tax dollars, American tax dollars and the idea is that is going to create American jobs, they’re predicting that's going to create 133,000 jobs for Ohio with the stimulus money.”

    Outside of the industries that would benefit from the protectionism, however, the Stimulus Bill’s “Buy American” requirement met instant opposition from American corporations and their political supporters. The president of the US Chamber of Commerce issued a statement against the provision: “If we refuse to buy foreign-made goods, then our trading partners will refuse to buy from us. And since we are the world’s largest exporter, who will be hurt more?” A number of American-based corporations joined in the opposition. One of these was Caterpillar, which actually stood to reap windfall profits from the proposal. During the Multinational Wars in the 1980’s, Caterpillar had faced crippling competition from Komatsu, and was one of the chief proponents of protectionist trade policies. Now, however, times had changed—like most other American corporations, Caterpillar now made over half its profits through foreign sales, and was moving an increasing portion of its manufacturing capacity overseas. As a result, the corporation was now an enthusiastic supporter of the rules-based WTO framework, and spoke out strongly against the “Buy American” bill: “There is no company that is going to benefit more from the stimulus package than Caterpillar, but I am telling you that by embracing Buy American you are undermining our ability to export U.S. produced products overseas.”

    A measure to delete the “Buy American” provision was introduced by Senator John McCain, and failed 31-65. But by pointing out that the provision violated WTO rules, critics did force Congress to adopt modifying language that allowed for exceptions to the provision, and that explicitly stated that the provision could not be utilized to violate WTO rules.

    •  yes, I understand. Congress should still... (0+ / 0-)

      ...enact these provisions into law anway- and not just on stimulus funding- on all government agency procurements.

      The sad fact is that congress and the president care more about the WTO than they do their own country.  It is sad, but true- and they laugh behind the public's back about how we just don't understand how the real world works.

      If our nation's politicians really wanted to get out of the WTO, they would.  But they like it.

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