House Acts To Protect ‘Buy America’ Rules During Trade Negotiations

Dave Johnson

The House of Representatives last week passed H.R. 4660, a bill that includes funding for the office of the U.S. Trade Representative (USTR). This bill included an amendment (Amdt. 761), passed by voice vote, “to prohibit use of funds to negotiate an agreement that includes a waiver of the ‘Buy American Act.’” The bill passed 321-87.

The 1933 Buy America Act says government purchasers must give a preference to U.S. suppliers and American-made products. Other “Buy America” provisions in state and federal government procurement rules require the government to try to buy American-made products when purchasing.

The USTR is currently negotiating the Trans-Pacific Partnership (TPP), and there have been reports that the treaty would ban provisions in government procurement like “Buy America.” ExposeTheTPP.org explains, in their fact sheet titled “The Trans-Pacific Partnership Would Ban ‘Buy American’ and ‘Buy Local’ Procurement Preferences“:

The TPP’s procurement chapter would require that all firms operating in any signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold. The United States would agree to waive “Buy American” and “Buy Local” procurement policies for all such foreign firms, eliminating an important policy tool to use U.S. tax dollars for U.S. job creation.

… Taking even the most favorable cut on other countries’ markets, the total U.S. procurement market is more than five times the size of the combined procurement market of the current TPP negotiating parties: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The 2009 “Stimulus” involved a fight over “Buy America” provisions. Economists like Paul Krugman argued that American taxpayer dollars should stimulate America’s economy. Krugman argued that the world’s economy is too large for the U.S. stimulus to work everywhere. So we should focus our own efforts on our own country’s economy and hope that other countries use their tax dollars to stimulate their economies.

Republicans tried to block the “Buy America’ provisions, and were able to get them “softened.” Later, after having fought against “Buy America” provisions, Republicans attacked the stimulus because it “sent taxpayer dollars” to build solar panels in Mexico, windmills in Denmark and batteries in South Korea. (See Republican Strategy: Obstruct, Blame Democrats For Obstruction’s Damage)

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