President backs down on "buy American"

iVillage Member
Registered: 02-19-2008
President backs down on "buy American"
9
Tue, 02-03-2009 - 8:21pm

It appears "buy American" is out. Apparently the current administration must look after the interests of our world, and not just Americans.

http://www.timesonline.co.uk/tol/news/world/europe/article5655115.ece

President Obama to water down 'Buy American' plan after EU trade war threat

The European Union warned the US yesterday against plunging the world into depression by adopting a planned “Buy American” policy, intensifying fears of a trade war.

The EU threatened to retaliate if the US Congress went ahead with sweeping measures in its $800 billion (£554 billion) stimulus plan to restrict spending to American goods and services.

Gordon Brown was caught in the crossfire as John Bruton, the EU Ambassador to Washington, said that “history has shown us” where the closing of markets leads — a clear reference to the Depression of the 1930s, triggered by US protectionist laws.

Last night Mr Obama gave a strong signal that he would remove the most provocative passages from the Bill.

“I agree that we can’t send a protectionist message,” he said in an interview with Fox TV. “I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.”

Mr Brown does not want to join criticism of President Obama’s stimulus proposals, which he sees as vindicating his own, but the Prime Minister remains strongly anti-protectionist, resisting calls yesterday for more safeguards for British workers.

Trade unions demanded a tightening of the law on the use of foreign workers as hundreds again walked out at the Lindsey oil refinery in protest at the hiring of Italian and Portuguese workers, and energy workers around the country followed suit.

A spokesman for the Prime Minister refused to condemn the “Buy American” clause. When pressed, the spokesman said that Mr Brown had repeatedly made clear that he was opposed to protectionist measures. He would not say, however, whether Britain was lobbying the new Administration to drop the clause.

Mr Brown remained in favour of President Obama’s decision to inject cash into the economy. “We are supportive of the approach in the US in terms of their fiscal policy.”

The EU warnings came in letters to US political leaders in Congress, Timothy Geithner, the Treasury Secretary, and Hillary Clinton, the Secretary of State. Mr Bruton urged them to respect the decision taken by the G20, the world’s leading economic nations, in Washington last November to resist protectionism as a defence against the crisis. They are expected to meet again in London in April.

“Failing this risks entering into a spiral of protectionist measures around the globe that can only hurt our economies further,” he wrote.

“Open markets remain the essential precondition for a rapid recovery from the crisis, and history has shown us where measures taken contrary to this principle can lead us.”

Under the “Buy American” clause passed by the US House of Representatives, American iron and steel must be used in construction projects that form part of the recovery plan. The US Senate wants to extend the scope of the clause before the Bill goes to the White House for approval.

The European Commission’s powerful trade department, a bastion of open markets formerly headed by Lord Mandelson, said yesterday that the “Buy American” clause was “the worst possible signal” that could be sent to world trade.

A spokesman said: “We are particularly concerned about the signal that these measures could send to the world at a time when all countries are facing difficulties. Where America leads, many others tend to follow.”

The Commission believes that the US move would violate international trade rules policed by the Geneva-based World Trade Organisation (WTO). The Commission also made clear that it was keeping an equally vigilant eye on protectionist moves within Europe as France prepared to insist that its motor manufacturers buy their parts only from French companies.

iVillage Member
Registered: 01-04-2009
Tue, 02-03-2009 - 8:50pm
I am liking Obama more and more each day.

 

iVillage Member
Registered: 01-22-2009
Wed, 02-04-2009 - 3:32am

~It appears "buy American" is out.~


I hope so.


~Apparently the current administration must look after the interests of our world, and not just Americans.~


If by that you mean the current administration has realized that they must not violate your legal commitment to NAFTA and WTO agreements, and thus land you in a big ole ugly mess, then yes.

iVillage Member
Registered: 03-18-2000
Wed, 02-04-2009 - 9:57am
The line "buy American" has been around for years I'm guessing that Democrats thought it would be a popular message that would resonate with the average citizen.
Obama blasts Democrats' push to buy American

http://www.theaustralian.news.com.au/business/story/0,28124,25009170-36418,00.html


AN international outcry over attempts by US Democrats to push a "buy American" policy through Congress has prompted Barack Obama to signal that he will block the move, saying his nation "can't send a protectionist message".


As Australia and other key trading partners in Asia and Europe register their concerns over the rhetoric in the Democrat-controlled US Congress, the new President has moved to buck his own party and indicate that the "buy American" provisions could risk a trade war.


It came as the European Union warned the US yesterday that the world economy could plunge into a depression if measures such as the one proposed in the US Congress -- particularly a ban on the use of foreign steel and iron in major American infrastructure projects -- were passed.


John Bruton, the EU ambassador in Washington, said "history has shown us" what erecting market barriers at times of sinking economies could do -- a reference to the Depression of the 1930s, exacerbated by US protectionist laws at the time.


Kevin Rudd warned yesterday that it would be very dangerous for Australia if countries around the world reverted to protectionism. "Protectionism just effectively throws a spear at the heart of the economy, because so many of our jobs are generated by the trading sector of the economy," he told Fairfax Radio Network.


But in a number of television interviews yesterday, Mr Obama gave a strong signal that he would remove the most provocative passages from the bill behind his $US819 billion ($1.26 trillion) financial stimulus package.


"I agree that we can't send a protectionist message," he said in an interview with Fox TV. "I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade."


Mr Obama added in another interview: "I think we need to make sure that any provisions that are in there are not going to trigger a trade war."


Australian Trade Minister Simon Crean welcomed Mr Obama's comments as a signal that the President had heard the concerns of Australia and other nations.


"His statement shows a real commitment to openness in world trade," Mr Crean told BBC radio. "And so apart from the specifics of the 'buy American' campaign, the commitment to openness in world trade is a very important signal to be sending in the current circumstances."


Mr Crean said the problem with one country announcing protectionist policies was that it invited retaliation.


"What's the point of America saying all steel has to be produced here if Korea then starts putting bans on US autos or US beef," he said. "It's that retaliation that will send the world into a downward spiral, it will worsen the global crisis."


During the World Economic Forum's Davos retreat last week, world leaders repeatedly warned that the erection of trade barriers could deepen the global crisis.


And earlier this week, US Federal Reserve Bank of Dallas president Richard Fisher warned that protectionism was the "crack cocaine of economics".


"It may provide a high (but) it's addictive and it leads to economic death," he told the C-SPAN network.

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iVillage Member
Registered: 03-18-2000
Wed, 02-04-2009 - 10:04am
Steelworkers head to push for Canadian exemption from 'Buy American' plan

http://lfpress.ca/newsstand/Business/2009/02/04/8260541.html


The Canadian-born head of the United Steelworkers union will push key U.S. lawmakers today for a reprieve for Canada’s steel industry.


Leo Gerard says he supports an exemption for Canadian-made steel from the “Buy American” provisions in an economic stimulus bill before Congress.

Gerard tells a Toronton newspaper he will make the case for Canadian steel at a meeting of the congressional steel caucus in Washington.

Ironically, Gerard and his union are a driving force behind the Buy American clause which would ban use of foreign goods and equipment in the $900 billion U-S economic stimulus plan currently being debate in the Senate.

However, he insists China, not Canada, is the target of the provision criticized as protectionist by the Canadian government. (Me: I had the same opinion I posted in another thread. China produces an inferior quality of steel.)











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Gerard criticizes Ottawa for doing nothing in recent years to protect the Canadian steel industry from a flood of cheap imports from China.

“There is a lot of hypocrisy at work here,” said Gerard.

“Right now, we’re here defending Canadian industry, and Canada isn’t defending the Canadian industry at home.”

Last week in Pittsburgh, Gerard argued U.S. tax dollars should be used exclusively to put Americans back to work.

“It’s time for economic patriots to stand up in our country,” Gerard said.

Gerard, who was born near Sudbury, Ontario and is a former nickel miner at Inco, is the first Canadian to lead the 850,000-member United Steelworkers union, based in Pittsburgh.

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iVillage Member
Registered: 01-22-2009
Wed, 02-04-2009 - 4:51pm

~However, he insists China, not Canada, is the target of the provision criticized as protectionist by the Canadian government. (Me: I had the same opinion I posted in another thread. China produces an inferior quality of steel.)~


I didn't think we were a particular target but the problem wasn't just the steel.

iVillage Member
Registered: 08-30-2002
Wed, 02-04-2009 - 6:59pm

As I asked in another thread, how can we be global and be exclusionary? Dodge and Magnavox were making a great majority of their "American" product in Mexico, long ago. Many "Japanese" cars are partially manufactured here. We are part of a global economy. We can't even produce our own oil. We are 4% of the world population that uses a quarter of the worlds resources. How are we going to only "buy American?" We have outconsumed our ability to produce.


Sorry folks, there is no going back to the good old days and anyway, if you ask some of the old timers, the "good old days" really weren't.



iVillage Member
Registered: 03-18-2000
Wed, 02-04-2009 - 8:17pm
I don't think Canada need be concerned about this. As the original post states.
BTW I heard on the news this evening that Obama will be meeting with Canadian PM soon.

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iVillage Member
Registered: 02-19-2008
Wed, 02-04-2009 - 10:33pm
We are 28% of the worlds GDP and consume 25% of the worlds oil. We are more energy efficient than the rest of our world. :)
iVillage Member
Registered: 01-22-2009
Wed, 02-04-2009 - 10:38pm

Even if Canada is exempt from it, starting American protectionist policies