Thursday, January 29, 2009

"Buy American" Stimulus Bill Provision Skips Headlines, Sparks Debate, US Business, European Union, World Trade Organization, Canada Oppose Obama Plan

Change you can alienate our worldwide economic partners and allies to

A bad idea just got worse. Vladimir Putin of all people compared the Obama/Pelosi/Reid Spending Bill to the failed economic policies of the former Soviet Union.

Americans are not the only ones fuming mad.

  • (AFP)Leading business interests, however, warned that such measures could trigger trade wars that only will exacerbate the slump in trade volumes and economic growth stemming from the global financial crisis.
  • "Since 95 percent of the world's consumers live outside the United States, American workers would be the first to suffer as 'Buy American' provisions trigger retaliation by other countries -- that is, 'Buy German,' 'Buy Chinese,' and so on," said Chris Braddock of the US Chamber of Commerce.
  • "We certainly aren't against companies and governments 'Buying American,' but we are against the government arbitrarily mandating such a requirement, because it would harm our economy in numerous ways," Braddock said, citing the trade wars that eventually sparked the Great Depression."
  • The Chamber is absolutely committed to avoiding a replay of that disaster," he said.
  • The House's "Buy American" provision bars spending on any infrastructure project "unless all of the iron and steel used in the project is produced in the United States."
Now You Did It! You Pissed off Canada!

  • On Thursday, Prime Minister Stephen Harper added Canada's name to the growing list of U.S. trade partners, from the European Union to Australia, who are seeking to overturn the provision.
  • "This is obviously serious matter and a serious concern to us," Harper told the House of Commons, adding that he had spoken about the matter with Canada's ambassador to the U.S., Michael Wilson.
  • "I know that countries around the world are expressing grave concern about some of these measures, that go against not just the obligations of the United States, but frankly, the spirit of our G20 discussions," the prime minister added.

Under the North America Free Trade Agreement, which the President opposes, Canada sells 40% of its steel to the US. Obama used inaccurate job-loss facts about NAFTA as an explotative campaign tactic.

Red County adds that this provision will make the economy worse.

  • It mandates that projects funded by the bill use only American-made products. So basically it is saying that the federal and state government should pay more money to do these projects or buy inferior goods merely to please inefficient domestic companies. Since the whole bill is waste, I guess the whole idea of trying to get the best deal possible isn't all that important. But it is important to avoid the type of of retaliatory protectionism that may be engendered. Other governments are launching equally-misguided stimulus bills. American companies would benefit from these governments buying American goods. But if these governments act in a similar fashion and impose "Buy British" or "Buy German" requirements, it will only prolong our economic woes.
War Against Free Trade
  • Opponents, including some of the biggest blue-chip names in American industry, say it amounts to a declaration of war against free trade. That, they say, could spark retaliation from abroad against U.S. companies and exacerbate the global financial crisis."

Great, now we've successfully pissed off our allies and trade partners. Is this renewing our standing in world, Mr. President?

What a First 10 Days!

Stumble Upon Toolbar submit to reddit

No comments:

Post a Comment