Here comes the sober second thought.
US reviewing 'Buy American' stimulus clause
ca.news.yahoo.com
WASHINGTON (AFP) - The White House said Friday it was reviewing a "Buy American" clause in Congress's version of President Barack Obama stimulus plan that has sparked angry claims of protectionism from US allies.
The House of Representatives added a measure in its 819 billion dollar version of the economic kick-start package banning the use of foreign steel in infrastructure projects.
Moves are underway in the Senate version of the bill to expand the provision to mandate the use of other US manufacturing materials.
The move has sparked a storm of protest from US trading partners including Canada and in Europe, and handed the Obama administration with an early political conundrum.
"The administration is reviewing that provision. It understands all of the concerns that have been heard not only in this room," spokesman Robert Gibbs told reporters at a White House briefing.
Gibbs refused to be drawn on whether the Obama administration supported the "Buy American" provision or not, saying he would have an answer once a review had been conducted.
Signs the administration was examining the clause came after the US Chamber of Commerce intensified its campaign against the populist provision, arguing it would torpedo the US leadership role in global trade.
"Some have slammed the US Chamber for opposing Buy American' provisions, calling our position economic treason.' Try 'economic patriotism,'" said US Chamber of Commerce President and CEO Thomas J. Donohue.
"Such provisions would cost American jobs, trigger retaliation from our trading partners, slow economic recovery by delaying shovel-ready infrastructure projects, and cede our leadership role as a long standing proponent of free and fair trade and global engagement."
"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?"
US trading partners which have complained at the congressional provisions include Canada, the venue for Obama's first trip abroad as president on February 19.
Canadian Prime Minister Stephen Harper said Thursday he was concerned about "US protectionism" and warned such moves could slow the global economic recovery.
It is a "serious concern to us," Harper said, and so "we're joining with all countries in the world to insist that the United States respect its WTO commitments."
Gibbs downplayed suggestions that the US-Canada summit could be overshadowed by the issue, as the stimulus bill is on course to pass Congress just days before Obama is due to head north to the biggest US trading partner.
"I don't think there's any doubt that trade is going to be on an agenda for a bilateral meeting between the United States and Canada," he said.
"I think that would have been the case regardless of who those two participants were."
The Senate is expected to take up the economic stimulus bill next week, and once it has passed the measure must "reconcile" the bill with the House version before sending it to Obama to be signed into law.
So there is still ample time for changes to be made, though erasing the "Buy America" clause may entail a price for Obama, as it is being pushed by political allies in states like economically bereft Ohio.
The bulk of Obama's stimulus package, designed to create or save three to four million jobs, includes tax cuts and spending on massive infrastructure projects such as building and repairing roads, rail, bridges and airports.
The European Union's trade commissioner, Catherine Ashton, has also voiced concern about the "Buy America" provision.
"We are looking into the situation. ... Before we have the final text ... it would be premature to take a stance on it," Ashton's spokesman, Peter Power, said in Brussels.
"However, the one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore," he said.
Italian Trade Minister Adolfo Urso warned Monday as the US legislation was being developed: "A dangerous new steel war is looming and we need to counter it with strong and decisive actions."
French Economy Minister Christine Lagarde said using protectionist measures to get stalled economies back on track is a "necessary evil" but they must be temporary and agreed with partners. |
