Senate Approves Softer “Buy American” Provisions
By Tom Stundza -- Purchasing, (source: www.purchasing.com)
The Senate has agreed to soften a controversial "Buy American" provision in the $900 billion economic stimulus package, adding a clause that purchasing of materials--especially steel--can’t exclude foreign suppliers covered in existing trade treaties.
The House-approved provision in the stimulus plan would have mandated that only U.S.-made goods be used in projects funded by the bill. Lawmakers in the House and Senate who supported the provision said it would help jump-start the economy because it would help U.S.-based companies. However, there has been growing international criticism of the provision and concern in Washington that a stronger provision could trigger a trade war after some trading partners already expressed concern.
According to CNN.com, the White House and many U.S. trading partners want lawmakers to craft the stimulus bill in a way that they doesn't run afoul of international trade agreements. They worry that such restrictions would spark a trade war and exacerbate the economic downturn. “President Obama…wants to ensure that any legislation that passes is consistent with trade agreements and doesn't signal a change in our overall stance on trade," White House press secretary Robert Gibbs said in a briefing.
“The President has been very clear that he wants this to be a bill that supports the American economy," says Larry Summers, a top Obama economic adviser, told the media. “But, at the same time, this bill is not going to be an excuse for America breaking its international commitments or embracing any new kind of protectionism.”
House and Senate versions of the “Buy American” provisions both stipulate that if construction costs would rise by 25% or more due to the purchase of American-made materials, contractors could receive a waiver to purchase foreign materials. The bills also allow for a waiver if buying American were not in the best interest of the economy or taxpayers.
However, The Wall Street Journal this morning says that U.S. business groups have vowed to keep pushing for the provision to be removed altogether.
The Senate has agreed to soften a controversial "Buy American" provision in the $900 billion economic stimulus package, adding a clause that purchasing of materials--especially steel--can’t exclude foreign suppliers covered in existing trade treaties.
The House-approved provision in the stimulus plan would have mandated that only U.S.-made goods be used in projects funded by the bill. Lawmakers in the House and Senate who supported the provision said it would help jump-start the economy because it would help U.S.-based companies. However, there has been growing international criticism of the provision and concern in Washington that a stronger provision could trigger a trade war after some trading partners already expressed concern.
According to CNN.com, the White House and many U.S. trading partners want lawmakers to craft the stimulus bill in a way that they doesn't run afoul of international trade agreements. They worry that such restrictions would spark a trade war and exacerbate the economic downturn. “President Obama…wants to ensure that any legislation that passes is consistent with trade agreements and doesn't signal a change in our overall stance on trade," White House press secretary Robert Gibbs said in a briefing.
“The President has been very clear that he wants this to be a bill that supports the American economy," says Larry Summers, a top Obama economic adviser, told the media. “But, at the same time, this bill is not going to be an excuse for America breaking its international commitments or embracing any new kind of protectionism.”
House and Senate versions of the “Buy American” provisions both stipulate that if construction costs would rise by 25% or more due to the purchase of American-made materials, contractors could receive a waiver to purchase foreign materials. The bills also allow for a waiver if buying American were not in the best interest of the economy or taxpayers.
However, The Wall Street Journal this morning says that U.S. business groups have vowed to keep pushing for the provision to be removed altogether.
