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TTALK QUOTE FOR WEDDAY,
DECEMBER
16, 2009
Filed from Washington, DC
Click here for yesterday's Kevin Brady
quote on the Pending FTAs.
BUY AMERICAN REDUX
"The
‘Buy American’ provisions … will significantly delay the
implementation of job-creating projects …. The result will be
delayed projects, few projects funded, and fewer Americans put
back to work."
28 Business
Associations*
December 16, 2009
Context:
The U.S. House of Representatives is likely
to vote on a new jobs bill this week, perhaps today. Described as
having a price tag of $150 billion for new construction projects and
for assistance “to cash-strapped states,” the bill now also contains
the same “Buy American” provision that Congress included year’s
stimulus bill. In the language of the legislation: “All
funds provided under this Act shall be subject to the requirements
of Section 1605 division A of the American Recovery and Reinvestment
Act of 2009 (Public Law 111-5).”
Responding to this
new Buy American initiative, 28 U.S. business associations
sent a letter earlier today to the leaders in the House and
the Senate: House Speaker Nancy Pelosi, House
Minority Leader John Boehner, Senate Majority
Leader Harry Reid, and Senate Minority Leader
Mitch McConnell. Today’s quote is a compressed
version of one paragraph of that letter. The full paragraph reads as
follows:
At a time of
significant unemployment, particularly in sectors meant to benefit
from infrastructure and stimulus spending – such as construction,
construction equipment and manufacturing – any jobs legislation
should seek to get money spent quickly and in the most efficient and
effective manner without delay. The “Buy American” provisions are
antithetical to that objective. In fact, new more restrictive “Buy
American” provisions, such as those included in the American
Recovery and Reinvestment Act (ARRA), will significantly delay the
implementation of job-creating projects and diminish competition and
efficiency in the contracting process, with a resultant lowering in
the quality and cost effectiveness of infrastructure improvements.
The result will be delayed projects, fewer projects funded, and
fewer Americans put back to work.
The letter puts a good
deal of emphasis on funding for water systems, and
it explains that the local authorities responsible for many of those
projects were effectively stopped in their tracks by the Buy
American provisions of the stimulus bill.
Comments: In matching up recent and pending Buy
American legislation with commercial realities, the analogy that
comes to mind is a surgeon operating with a sledge hammer. The
commerce at issues – like almost all commerce today – involves both
domestic and foreign suppliers, and both are harmed when
requirements that cannot be met block the normal flow of work.
Presumably that is why American groups like the Water and
Wastewater Equipment Manufacturers Association and the
National Association of Pipe Fabricators are among
the signatories to today’s letter.
The letter also notes another
big class of losers in the scenario that is unfolding: U.S.
exporters. Citing a recent study by the Chamber of Commerce, today’s
association letter suggests that “If foreign governments
lock U.S. companies out of just one percent of their own stimulus
spending, the net U.S. job loss could surpass 170,000.”
All such estimates can be challenged. For our part, we
believe the argument this one illustrates is fundamentally sound,
but it is complex. (For example, not all buy national policies
abroad are responses to U.S. initiatives. Some are purely home
grown.) What this week’s debate does make clear, however, is that
the language of the stimulus bill was not a limited, one time
initiative with a short shelf-life. Rather it is a continuing
feature of this Congress’s view of American trade and trade policy
and of the direction in which they wish to take it.
*The Signatories to Today’s Business
Letter on Jobs and Buy American
Advanced
Medical Technology Association (AdvaMed)
Aerospace Industries
Association (AIA)
American Business Conference
American
Council of Engineering Companies (ACEC)
Associated Builders and
Contractors
Association of Equipment Manufacturers (AEM)
The
Associated General Contractors of America
Business Roundtable
(BR)
California Chamber of Commerce
Clean Water Construction
Coalition
Coalition of Service Industries (CSI)
Computer and
Communications Industry Association
Computing Technology Industry
Association
Consuming Industries Trade Action Coalition
Emergency Committee for American Trade (ECAT)
European-American
Business Council
Information Technology Industry Council (ITI)
National Association of Foreign Trade Zones (NAFTZ)
National
Association of Manufacturers (NAM)
National Association of Pipe
Fabricators (NAPF)
National Foreign Trade Council (NFTC)
Organization for International Investment (OFII)
Retail Industry
Leaders Association (RILA)
Semiconductor Industry Association
(SIA)
TechAmerica
United States Council for International
Business (USCIB)
U.S. Chamber of Commerce, and
Water and
Wastewater Equipment Manufacturers Association (WWEMA)
SOURCES AND LINKS:
Buy American Redux is a link to the page on the ECAT (Emergency
Committee for American Trade) website with text of the letter
discussed above.
House to Vote on Jobs Bill takes you to a Reuters report on this
legislation as published on the New York Times website.
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