EU decries “Buy American” rules in stimulus

 

   Expressions of concern about Buy America provisions in the House and Senate economic stimulus bills continue to grow.

   On Monday, the European Union said the United States should avoid protectionist measures as a response to the recession.

   The message was delivered in a letter from Ambassador John Bruton to Congress and the White House.

   Bruton said other countries could follow the U.S. lead and erect their own trade barriers, which could hurt U.S. exports.

   The European Commission is particularly concerned about the message such measures would send to the world, at the times when most countries are faced with the same situation of looking for best means to tackle the crisis. The United States and the European Union should take the lead in keeping the commitments not to introduce protectionist measures taken by the G-20 in November 2008. Failing this risks entering into a spiral of protectionist measures around the globe that can only hurt our economies further, he said. 

   The stimulus bills, as drafted, require that federal funds spent on infrastructure projects only be spent on steel and iron from domestic producers.

   Bruton and pro-trade opinion-makers note that the Great Depression in the 1930s was compounded by the infamous Smoot-Hawley protectionist legislation.

   Canadian officials have also recently complained about the stimulus bills' prohibition on foreign-made steel and iron.

   The U.S. Chamber of Commerce and other business groups last month voiced their opposition to the Buy America provisions because of the potential to harm exports and the jobs they create.

   If our goal is to create good-paying jobs at home by selling American-made goods and services overseas -- where 95 percent of the world’s consumers live-- then ‘Buy American’ requirements don’t make sense. 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? Chamber President Thomas Donahue said in a statement.

Source: American Shipper