1NC

Disadvantage

1NC Buy America Disadvantage
G-20 summit has created a shift away from protectionist legislation – countries are turning outwards towards trade PTI 6/20 (―Resist protectionism, keep markets open: G-20 tells nations‖
http://zeenews.india.com/business/news/2012-g-20-mexico-summit/resist-protectionism-keepmarkets-open-g-20-tells-nations_54075.html) Los Cabos: In order to boost global demand and achieve sustainable growth, the G-20 leaders

have asked the member nations and other countries to resist protectionism and keep markets open. "Resisting protectionism and keeping markets open," said the Los Cabos Growth and

Jobs Action Plan adopted at the 2-day summit here, which among others was attended by Prime Minister Manmohan Singh. As the global economic risks and uncertainties have increased substantially, it said, "our collective focus now is to strengthen demand, growth, confidence and financial...We have agreed today on a globally coordinated economic plan to achieve those goals through our framework for strong, sustainable and balanced growth." Besides underlining the need for

decisively dealing with the sovereign debt problem in the Eurozone countries, the Action Plan calls for "boosting demand and economic growth, and reducing persistently high and rising unemployment in many advanced economies, especially among young people". It also underlined the need for dealing effectively with spike in oil prices in wake of geopolitical
risks in an environment of limited spare capacity and modest inventories. The priority, it added should be to ensure that emerging markets maintain a strong and sustainable growth path that contributes to the global recovery and quality job creation. Calling for "stronger actions" to promote growth and stability, the Action Plan said, "we need to intensify our efforts to reduce both internal and external imbalances" and address problems pertaining to high fiscal deficits. Efforts, it added, should be made to minimise risks and ensure proper functioning of our financial systems, supported by fiscal and monetary policy actions. In order to address near term risks, the Action Plan said the Euro Area members

of the G-20 would be taking all necessary measures to safeguard the integrity and stability of the area, improve the functioning of financial markets. The United States, it said, will calibrate the pace of its fiscal consolidation by ensuring that its public finances are placed on a sustainable long-run path so that a sharp fiscal contraction in 2013 is avoided. The other developed countries will also be taking similar steps to promote growth in the larger interest of global recovery. Referring to the issue of exchange rate, the Action Plan reaffirmed the commitment of the G-20 leaders to "move more rapidly toward marketdetermined exchange rate systems and enhance exchange rate flexibility to reflect underlying fundamentals, avoid persistent exchange rate misalignments, and refrain from competitive devaluation of currencies". China, it said, was building on its commitment to
gradually reduce the pace of reserve accumulation, and to allow market forces to play a larger role in determining movements of the RMB and to increase the transparency of its exchange rate policy. "We welcome China?s commitment to continue exchange rate regime reform," it added. Oil-exporting countries, the Plan said, "will continue to pursue productive public investment and encourage private investment, which will have positive regional and global spillover effects, while ensuring fiscal sustainability given the volatile nature of revenues." The other important components of the Action Plan include increased investment in infrastructure sector, labour reforms, stability of real estate sector and strengthening of social safety nets. The progress of the Plan to combat global problems will be reviewed at the St. Petersburg Summit in 2013.

mostly steel and iron. would prohibit state governments from contracting outside the country if any part of the project receives U. "It's basic common sense. Which way will Obama go? Will he risk antagonizing Senate Majority Forget about Iraq. "American taxpayers will spend close to $1 billion to stimulate the U.S. may find themselves behind yet another "Buy America" law that would prohibit them from bidding on any government-funded construction project even if it has the smallest amount of federal funding. trade partners see it differently. then all contracts for a project. A Senate version of the bill further demands that the stimulus package's funds for infrastructure projects be used exclu-sively to purchase U.S.of U.S. It is strongly supported by his Democratic Party and labor unions.-made steel. House Speaker Nancy Pelosi and the AFL-CIO." Supporters of the bill reject claims that the "Buy American" clause would violate the spirit -if not the letter -. The various Buy America provisions try to create U. Both the Senate and the House of Representatives are in complex negotiations to finalize the law. if at least one contract for a project receives any federal funding under this act." Leading U. Senator Sherrod Brown. centrist.S. Passage of the "Buy American" clause would lead to "a rush of protectionist . lexis) Canadian companies hoping to bid on the crumbling road and bridge system in the U. regardless of their funding source. "The proposed MAP Act includes provisions that represent a significant departure from existing 'Buy America' preferences. U. as well as key Republicans in Congress? Or." AFL-CIO policy director Thea minority of Republicans in hopes of building a bipartisan. Canada thought it bought some peace in February 2010 when the two governments agreed on reciprocal bidding in each other's countries on infrastructure projects such as bridges and roads after President Barack Obama brought in a $787-billion economic stimulus bill. Lee explained to me." Lee said. February 5. ―Buy America spectre rises again‖ Hamilton Spectator. Correspondent for the Miami Herald. Canada and the U. such as shovels or cranes. Brazil and other U. within our international obligations. legislative base? included in the administration's stimulus package that the House passed last week. government funding. 5-10-‘12 (Peter.S. we should try to use those dollars to buy American products.S. jobs. convinced the Senate to endorse a new and onerous Buy America regulation as part of a sweeping transportation funding bill called Moving Ahead for Progress in the 21st century Act. would be subject to Buy America preferences. Canada. which was accepted by the Senate in March. calls for ensuring that funds for infrastructure projects such as highways and bridges be only used to buy U. allies say it would trigger a trade war like the one that led to the Great Depression. have long butted heads on various Buy America laws dating as far back as 1933." Shehata said. whose support he badly needs to pass his almost $900 billion economic stimulus package? Or will he heed the calls from the European Union.S. a Democrat from the steel-producing State of Ohio. "There are waivers and exceptions built into our trade obligations that allow us to give a preference to American goods to a certain level. chair of the Washington-based Canadian American Business Council. to put it more bluntly. jobs through restrictions on imported construction materials.S. President Barack Leader Harry Reid. Brown's amendment. Buy American requirements on transportation infrastructure trigger a trade war that causes global depression and undermines world trade Oppenheimer. ‗9 (Andres. iron and other materials.S.S. or MAP-21. international trade commitments." Amgad Shehata. economy and create U.S. "Specifically. lexis) Obama's first key decision will be whether to support a "Buy American" clause. trade partners. will Obama conclude that he has little choice but to govern with the solid support of the Democratic majority in Congress or will he risk sacrificing some Democratic votes in exchange for a small The "Buy American" clause. said in a letter to the Senate and the House conferees this week. but U. "There is no reason why not to take advantage of provisions that we have negotiated into these trade agreements.S. which is also known as the Surface Transportation Reauthorization Bill. To the largest extent possible.S.-made manufactured goods. ―Reject ‗Buy American‘ clause or risk a trade war‖ Salt Lake City Tribune.Federal transportation investment in the United States requires contractors to abide by Buy American provisions – the plan prohibits contracting with foreign firms Morton. the Middle East or searching for a new White House puppy.

The rise in isolationism and protectionism will bring about ever more heated arguments and dangerous confrontations over shared sources of oil." says John Murphy. moves that are seen as protectionist could really give a moral sanction to governments around the world to raise trade barriers themselves.S." adding that opinion: Your statement was right on the mark. and other key commodities as well as factors of production that must. . which many commentators believe helped turn a serious economic downturn into a prolonged and devastating global disaster. out of necessity. continue to undermine business In a world of lockouts and lockdowns. Instructor New York Institute of Finance. and reckless policies. restrictions on immigration will almost certainly intensify.they caution that the White House may back a watered-down version of the bill that could still be perceived by U. overuse. those lessons will have been long forgotten fed by a mood of desperation and growing public anger. there is "a potential source of trade wars that we can't afford at a time when trade is sinking all across the globe. President! leaning since Vice President Joe Biden had made comments that appeared to back the measure last week -. will be stymied by limits on investment by non-citizens." These trade conflicts culminate in global nuclear war and nuclear terrorism Panzner." Canadian Ambassador Michael Wilson said in a letter to congressional leaders earlier this week." While critics of the "Buy America" clause cheered Obama's words -. trade partners an excuse to pass their own "Buy national" laws. Mexico. they will introduce controls on foreign exchange. Brazilian President Luiz Inacio Lula da Silva told reporters that "protectionism that at this moment will aggravate the crisis. Asked by ABC News about his position on the "Buy American" provision. Pro-business groups note that U. exchanges of any kind allows diseases to be easily spread from one country to the next by tourists and wildlife. or trying to buy property and other assets on the cheap thanks to a rapidly depreciating dollar.-. Authorities and ordinary citizens will likely As desperate officials try to limit the fallout from decades of ill-conceived. any link that transmits systemic financial pressures across markets through arbitrage or portfolio-based risk management. jobs will be lost than this provision would help save . "In that context. exports fell by nearly 25 percent in December. In some instances. Meanwhile. Around the world. many nations will make transporting or sending funds to other countries exceedingly difficult. or that confidence and consumer spending. settlement.S. Chile or Peru -. Foreign individuals and companies seeking to acquire certain American infrastructure assets. disrupting global payment. or that otherwise facilitates unwelcome will be viewed with suspicion and dealt with accordingly.does not have a free trade agreement with Washington that would exempt it from many of the measure's provisions.S. America. gas. finance. any U. If it gives U. and pollution of the environment and natural resources will become more commonplace.S.it was the president's first indication of where he's Obama said Tuesday that he wants to avoid measures that would "signal protectionism. corrupt. Now. of course. Introduced at the start of the Great Depression. investment. but the signal it sends to the rest of the world. exports will plummet even more and more U. and energy. water. Eventually. Whether involving raw materials used in strategic industries or basic necessities such as food. efforts to secure adequate supplies will take increasing precedence in a world where demand seems constantly out of kilter with supply. U.actions" that could "create a downward spiral like the world experienced in the 1930s . ‗8 (Michael J.S. vice president of the U. economic conditions will serve as a convenient pretext for conflicts that stem from cultural and religious differences. Mr. trade partners as protectionist." Trade experts say Brazil would be among the most hurt by the "Buy American" clause because it exports steel to the United States and -. and lawmakers may even call for a general crackdown on nonessential travel.unlike Canada. such tensions will give rise to full-scale military encounters. 136-138) Continuing calls for curbs on the flow of finance and trade will inspire the United States and other nations to spew forth protectionist legislation like the notorious Smoot-Hawley bill. Those efforts will cause spasms to ripple across economies and markets. please make sure that "Buy American" doesn't turn into "Bye. All of this will. trade. Chamber of Commerce. But during the next collapse. P. Financial Armageddon: Protecting Your Future from Four Impending Catastrophes. and clearing mechanisms. Disputes over the misuse. if history is any guide. My What's important is not only the letter of the law. it triggered a series of tit-for-tat economic responses. often with minimal provocation.S. and that other countries are suffering similar drops in trade. be acquired from less-thanfriendly nations. and scrutinize the cross-border movement of Americans and outsiders alike.S.

More than a few disputes will turn out to be almost wholly ideological. Enabled by cheap technology and the waning threat of American retribution. Many will interpret stepped-up conflicts between Muslims and Western societies as the beginnings of a new world war. cruise missiles. more heated sense of urgency. while Iran may embark on overt colonization of its neighbors in the Mideast. Growing cultural and religious differences will be transformed from wars of words to battles soaked in blood. Alternatively. have even speculated that an ― intense Israel. may look to draw a dwindling list of allies from around the world into a growing number of conflicts. Age-old clashes will also take on a new. terrorist groups will likely boost the frequency and scale of their horrifying attacks. Long-simmering resentments could also degenerate quickly. for its part. spurring the basest of human instincts and triggering genocidal acts.nations may look to divert attention away from domestic problems by channeling frustration and populist sentiment toward other countries and cultures. Some confrontation‖ between the United States and China is ―inevitable‖ at some point. China will likely assume an increasingly belligerent posture toward Taiwan. and bunker-busting bombs to cause widespread destruction. bringing the threat of random violence to a whole new level. . observers. Turbulent conditions will encourage aggressive saber rattling and interdictions by rogue nations running amok. like John Mearsheimer. a political scientist at the University of Chicago. Terrorists employing biological or nuclear weapons will vie with conventional forces using jets.

Counterplans .

1NC Buy America Counterplan
The United States federal government should repeal requirements that funds authorized to be appropriated for transportation infrastructure projects use steel, iron, and manufactured products produced in the United States. The United States federal government should <insert plan without investment in the United States> Any permutation severs – investment “in the United States” requires complying with current Buy American provisions that require investment to be in domestic US companies Elkins, Inspector-General Environmental Protection Agency, ‟11 (Arthur, May 4, ―Stimulus Status:
Two Years and Counting‖ Testimony before the House Transportation and Infrastructure Committee, lexis) Buy American and Davis-Bacon Provisions The Recovery Act includes Buy American and DavisBacon provisions. Specifically, section 1605 prohibits the use of Recovery Act funds for a

project unless all of the iron, steel, and manufactured goods used in the project are produced in the United States. The regulation requires that this prohibition be consistent with
U.S. obligations under international agreements, and provides for a waiver under certain circumstances. A manufactured good that consists in whole or in part of materials from another country may be considered domestic if it meets the substantial transformation test. Section 1606 of the Recovery Act requires all laborers and mechanics employed on projects that are funded in whole or in part by the Recovery Act be paid Davis-Bacon Act rates. These are rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor.

Federal government has requirements for Buy America provisions – the counterplan eliminates them Turmelle, 6-4-‘12 (Luther, ―Rep. Chris Murphy pushes Buy American agenda‖ New Haven Register,
lexis) U.S. Rep. Chris Murphy, a candidate for the U.S. Senate, is urging the leadership of two legislative committees crafting the next federal highway bill to strengthen requirements mandating American-made components on transportation projects. Murphy, D-5, sent a letter signed by 47 of his colleagues to the chairs of the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee. The Transportation and Infrastructure Committee is chaired by John Mica, a Republican congressman from central Florida, while California Sen. Barbara Boxer, a Democrat, is chairwoman of Senate Environment and Public Works Committee. Existing Buy American

requirements mandate that all steel, iron and manufactured goods used to construct federal highway projects are produced in the U.S. And although Boxer is one of the
committee leaders whose opinion Murphy is trying to sway, his letter is openly critical of how her home state used a loophole in the requirements for federal road and bridge projects. "Currently, state and

local governments can split infrastructure projects into separate contracts, complying with Buy America and receiving federal dollars for one portion, and using other sources for the non-Buy America compliant remainder of the project," Murphy said. "The State of California used this strategy for its new Bay Bridge, sending hundreds of millions of dollars to
China for work that should have been done by Americans."

1NC States Counterplan
The 50 State governments, territories, and Washington DC should establish state infrastructure banks for investment in _______ <insert states solvency card> State funding for transportation infrastructure investment relieves them from compliance with Buy American provisions Turmelle, 6-4-‘12 (Luther, ―Rep. Chris Murphy pushes Buy American agenda‖ New Haven Register,
lexis) U.S. Rep. Chris Murphy, a candidate for the U.S. Senate, is urging the leadership of two legislative committees crafting the next federal highway bill to strengthen requirements mandating American-made components on transportation projects. Murphy, D-5, sent a letter signed by 47 of his colleagues to the chairs of the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee. The Transportation and Infrastructure Committee is chaired by John Mica, a Republican congressman from central Florida, while California Sen. Barbara Boxer, a Democrat, is chairwoman of Senate Environment and Public Works Committee. Existing Buy American

requirements mandate that all steel, iron and manufactured goods used to construct federal highway projects are produced in the U.S. And although Boxer is one of the committee leaders whose opinion Murphy is trying to sway, his letter is openly critical of how her home
state used a loophole in the requirements for federal road and bridge projects. " Currently,

state and local governments can split infrastructure projects into separate contracts, complying with Buy America and receiving federal dollars for one portion, and using other sources for the non-Buy America compliant remainder of the project," Murphy said. "The State of California used this strategy for its new Bay Bridge, sending hundreds of millions of dollars
to China for work that should have been done by Americans."

Uniqueness

Trade .

but we are still seeing growth.economist. http://www. But is rather sobering that the developed world looks so completely moribund.S.S. http://blogs. Trade expected to grow within the next 15 years Bonney 6/27 (Joseph. imports from China during the last five year. forecasts growth despite global economic difficulties. .Trade High Now Global trade between developing nations is increasing. indeed it is back where it was in 2006. http://www.7 percent annually during the next 15 years. There was then a rapid recovery in 2010 before growth began to tail off last year. simply by focusing on global trade. which are well worth a look). produced with Delta Economics. eastern European and the combined middle-east and Africa region are all between two and three times higher than they were in 2000. and any business worth its salt is pursuing the emerging markets. trade between developed nations is still at pre-recession levels Economist. the report said. of course.joc. ―US Global Trade Forecast to Grow 4. imports in the developing economies are more than 40% higher than their 2009 low. Turkey and Brazil. Senior Editor at The Journal of Commerce Online. where he oversees lending to businesses across 17 countries. Of course.S. More than 70% of the companies surveyed expected trade volumes to stabilize or grow in the next six months.com 5/2/2012 (Global trade Worlds apart May 2nd 2012.com/economics/2012/06/26/global-trade-confidence-stable-despite-worries/) HSBC‘s Trade Confidence Index. But when you break the numbers down. to become the world‘s largest importers by 2026. The overall reading was 113.com/importexport/us-global-trade-forecast-grow-47-percent) U. Global Trade increasing now WSJ 6/26 (Wall Street Journal. you can see that trade in the developed economies has yet to recover its 2008 level.7 Percent‖. 10:50 by Buttonwood.com/blogs/buttonwood/2012/05/global-trade) SUCH is the daily blizzard of economic data that it is hard to get a good perspective. exports are expected to rise fastest to emerging markets led by increases of more than 8 percent annually to Peru.S. The overall trade numbers are now higher than they were before the crisis. led by exports to feed consumer demand in emerging markets. Go back even further and you can see that imports in Asia. notably in Europe. They are cautious. But a research note from Klaus Baader of Societe Generale highlights the amazing shift of economic power from the developed world to the developing. During the next five years. ―Businesses are still continuing to trade. a ccording to a new report by HSBC Commercial Banking. HSBC‘s regional head of commercial banking. China and Germany are expected to leapfrog the U. annual growth in 2011 was 5. ticked up slightly in the latest reading published Tuesday. much higher commodity prices have boosted the spending power of many countries.S. In contrast. Plenty of multinationals have spotted these trends already. above 100 indicates a positive view.-based companies‘ imports and exports will rise 4.6% (based on data from the Dutch CPB Bureau for Economic Policy Analysis. a semiannual survey of exporters and importers in 20 countries. U. The HSBC Global Connections Trade Forecast. A reading below 100 indicates a negative outlook. exports to China are forecast to outpace U. in part because it was so hard to get trade finance . ―Global Trade Confidence Stable Despite Worries‖.‖ said Noel Quinn.wsj. little changed from the 112 score last October. Trade collapsed in 2009. Asia Pacific. U. in the wake of the financial crises.

‖ He said that businesses are enacting ―fine-tuning adjustments‖ to business plans rather than making binary moves to cancel projects and investments. Mr.com/economics/2012/06/26/global-trade-confidence-stable-despite-worries/) And the U.Trade increasing slowly WSJ 6/26 (Wall Street Journal. Quinn. while still sluggish. economy. ―Global Trade Confidence Stable Despite Worries‖. where‘s there‘s ―reasonable demand‖ for finance and ―ample supply of liquidity to meet that demand‖ as bright spots. Indonesia and Malaysia. giving a boost to companies that sell to the U. . but they haven‘t stopped making decisions. In terms of longer-term capital projects such as infrastructure. companies are placing smaller orders and ordering more frequently to prevent being stuck with inventory they can‘t sell. http://blogs. ― Businesses are cautious.‖ To cope with slower growth. ―It‘s not anything like what we experienced in 2008 and 2009. though he added: ―I‘m not trying to say everything is rosy.‖ said Mr. performed somewhat better over the past six months.S.wsj. Quinn cited places such as Bangladesh.S.

today. Why President Obama and his party should resist the cry to ‗Buy American‘‖ lexis) Obama has managed to finesse the issue of trade. Now that he is president. (There are a few exceptions for those willing to spend a lot of time and money on paperwork. Barack Trade Agreement. ―Trade Test.S. exports. . Mr. (Notably. The fiscal stimulus bill making its way through Congress provides an early opportunity: Mr. „9 (January 28. capacity utilization is 43 percent. the bill would prohibit the use of imported steel on tens of billions of dollars' worth of infrastructure projects.thus helping turn a bad recession into the Great Depression. steel industry and its workers.yet. do not stand to benefit from the federal effort to save General Motors and Chrysler. Obama will have to define himself more clearly. trade is already set to decline by 2 percent in 2009. but paying more than necessary for steel diverts resources that could create jobs in other industries. he has recognized the job-creating power of U. At others. which committed the United States to "refrain from raising new barriers to investment or trade in goods and services" until November 2009. unlike steel. trading partners. Steel might support a law that puts Caterpillar's overseas sales at risk.) "Buy American" would violate the Nov. such as when he suggested that he would renegotiate the North American Free IN THE TWO-PLUS years since he announced his candidacy for president in January 2007. it raises the prospect of retaliation against American exporters by U.S. Worse. We do not underestimate the plight of the U.including some that. Obama should say no to "Buy American" provisions in the $825 billion measure . according to the World Bank. European stimulus programs do not bar U. just laid off 20.S. We can see why U.Trade Brink Trade on the brink – a new round of massive disputes on Buy American will undermine the entire system Washington Post. which apply only to highway construction. according to the Iron and Steel Institute. It could collapse altogether if countries start shutting out one another's goods in a shortsighted effort to salvage domestic industries. because of the collapse in automaking and construction. At times.000 workers. "Buy American" sounds patriotic. The director-general of the European steel industry trade association already has threatened to take the United States before the World Trade Organization if the steel provision passes. such as when he voted for a free-trade pact with Peru. when it enacted a tariff increase that prompted European retaliation -.S. including work on federal buildings and public schools .) This is a dramatic extension of current "Buy American" rules for steel. Caterpillar. steel plants were operating at 91 percent of capacity. 15 G-20 joint declaration. a huge exporter. Just five months ago. Alas. The United States started one such trade war in 1930. Better to learn from this history than to repeat it. As currently written.S. But why is it in the national interest? Once an engine of global growth. the same could be said of many other industries -. he has veered toward protectionism. steel or other products -.

Buy America .

Tell your members of Congress to maintain and expand upon these provisions.citizen. and to locally made uniforms for the Transportation Security Administration. . 12 (―Call Now: Urge Your Senators to Put America Back to Work‖.jsp?campaign_KEY=26590&t)KW On January 28. A pack of multinational corporations are trying to get the Buy America provisions stripped from the Senate bill. Safety. and Democracy.it advocates locally made iron and steel for domestic construction works The Public Citizen. DOA: 7/14/12.Buy America Now The bill to buy in America is passed the House. The Senate will vote this week on their stimulus package. The Public CitizenProtecting Health.org/campaign. http://action. which expands on some of these provisions. the House passed a strong stimulus bill that included provisions that gave preferences to locally made iron and steel in transit projects and school buildings.

. mass transit and other transportation programs through 2014. and we are keeping pace with our global competitors. President Obama shows that he is continuing to stand up for good." Gerard said. and the American economy.A2: Loopholes Loopholes have been closed – increased transparency prevents skirting around Buy America requirements PR Newswire. we are supporting manufacturing. which passed both houses of Congress on Friday with bipartisan support. steel and manufactured goods. "Rebuilding our transportation infrastructure means we are creating jobs. thus ensuring that the transportation projects are completed using Americanmade iron." said USW International President Leo W. "By signing this bill. we should remember that 'Buy America' laws like this are an investment in American companies. and will create or sustain three million jobs while also avoiding a huge rate increase on student loans for nearly 7 million college students." The new law also strengthens "Buy America" provisions by adding much-needed transparency for those seeking to waive the Buy America preferences and also by limiting a long-time loophole to make sure that highway projects receiving federal funds can no longer be divided into smaller contracts to end run the application of Buy America. 7-6-‘12 (―USW Applauds Transportation Bill‖ lexis) The bill. American workers. allows for more than $100 billion to be spent on highway. middle-class jobs and affordable education for all Americans. "Especially since we just celebrated our nation's birthday. Gerard.

Links .

The various Buy America provisions try to create U. Rep. . "Specifically. chair of the Washington-based Canadian American Business Council.S. ―Buy America spectre rises again‖ Hamilton Spectator. mostly steel and iron. Canada thought it bought some peace in February 2010 when the two governments agreed on reciprocal bidding in each other's countries on infrastructure projects such as bridges and roads after President Barack Obama brought in a $787-billion economic stimulus bill. have long butted heads on various Buy America laws dating as far back as 1933. "The State of California used this strategy for its new Bay Bridge. ―Rep. Brown's amendment. state and local governments can split infrastructure projects into separate contracts.S. regardless of their funding source. And although Boxer is one of the committee leaders whose opinion Murphy is trying to sway. and using other sources for the non-Buy America compliant remainder of the project. Senator Sherrod Brown. convinced the Senate to endorse a new and onerous Buy America regulation as part of a sweeping transportation funding bill called Moving Ahead for Progress in the 21st century Act. Senate." Murphy said. if at least one contract for a project receives any federal funding under this act. said in a letter to the Senate and the House conferees this week. a candidate for the U." Amgad Shehata. a Republican congressman from central Florida. iron and manufactured goods used to construct federal highway projects are produced in the U. a Democrat. "The proposed MAP Act includes provisions that represent a significant departure from existing 'Buy America' preferences. 6-4-‘12 (Luther. Existing Buy American requirements mandate that all steel. may find themselves behind yet another "Buy America" law that would prohibit them from bidding on any government-funded construction project even if it has the smallest amount of federal funding. a Democrat from the steel-producing State of Ohio. while California Sen. is urging the leadership of two legislative committees crafting the next federal highway bill to strengthen requirements mandating American-made components on transportation projects.S. The Transportation and Infrastructure Committee is chaired by John Mica.S.S.S. which was accepted by the Senate in March. complying with Buy America and receiving federal dollars for one portion. jobs through restrictions on imported construction materials. would be subject to Buy America preferences. then all contracts for a project. lexis) U. U. government funding. "Currently. Both the Senate and the House of Representatives are in complex negotiations to finalize the law. Barbara Boxer. Chris Murphy pushes Buy American agenda‖ New Haven Register. his letter is openly critical of how her home state used a loophole in the requirements for federal road and bridge projects. sending hundreds of millions of dollars to China for work that should have been done by Americans. Chris Murphy." Shehata said. which is also known as the Surface Transportation Reauthorization Bill.S. Canada and the U. 5-10-‘12 (Peter. D-5. would prohibit state governments from contracting outside the country if any part of the project receives U. lexis) Canadian companies hoping to bid on the crumbling road and bridge system in the U. sent a letter signed by 47 of his colleagues to the chairs of the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee.S. or MAP-21. is chairwoman of Senate Environment and Public Works Committee. Murphy.Federal Government Federal government has requirements for Buy America provisions – states can opt out if they refuse federal funding Turmelle." Receiving any amount of federal funding means contractors must abide by Buy American provisions Morton.

citing time constraints or difficulty meeting Buy American requirements. and an addendum to the contract to meet the regulations would have increased the project`s cost . For example. or chose not to apply for or withdrew from the Recovery Act funding process to avoid paperwork or the additional costs associated with the act`s Buy American or Davis-Bacon requirements. officials in all nine states said that a few communities indicated they preferred to have their projects funded from the base program. Similarly. And Federal And State Monitoring Shows Few Compliance Problems‖ lexis) Buy American and Davis-Bacon provisions.States have rejected federal funds for infrastructure projects to avoid compliance with Buy America requirements GAO. local officials in Alabama withdrew their application for a drinking water project because the project was already contracted without Buy American and Davis-Bacon wage requirements. ―Funds Supported Many Water Projects. Wyoming officials said that potential subrecipients for three clean water projects refused funding. ‟11 (June 29. such as the Buy American and Davis-Bacon provisions. or did not want to increase the cost of their projects.[Footnote 23] For example. State officials identified a few projects that did not proceed because potential subrecipients either did not want to meet one or more Recovery Act requirements. .

In the United States Investment “in the United States” Elkins. Section 1606 of the Recovery Act requires all laborers and mechanics employed on projects that are funded in whole or in part by the Recovery Act be paid Davis-Bacon Act rates. A manufactured good that consists in whole or in part of materials from another country may be considered domestic if it meets the substantial transformation test. Specifically. ‟11 (Arthur. lexis) Buy American and Davis-Bacon Provisions The Recovery Act includes Buy American and DavisBacon provisions. and provides for a waiver under certain circumstances. and manufactured goods used in the project are produced in the United States. The regulation requires that this prohibition be consistent with U. obligations under international agreements. ―Stimulus Status: Two Years and Counting‖ Testimony before the House Transportation and Infrastructure Committee. May 4. Inspector-General Environmental Protection Agency. section 1605 prohibits the use of Recovery Act funds for a project unless all of the iron.S. . steel. These are rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor.

laws (merely extended in the stimulus bill) give U. transportation.Transportation Infrastructure Investment The US prefers domestic companies for transportation infrastructure Judis. motor vehicles. Canada and the EU give their firms a leg up over American companies and products on EVERY aspect of transit funding. and energy. The EU--not to be outdone--stipulated drinking water. And it's too bad that President Barack Obama is listening to them. stipulated iron and steel. Todd Tucker of Public Citizen gives the details in "Eyes on Trade. The treaty allowed countries to make exceptions for government procurement for specific industries. Canada stipulated steel. . and many other government purchases besides.com/print/blog/the-plank/those-who-live-glasshouses-more-buy-america. http://www. The U.S. February 4. telecommunications. both Canada and EU give their nations' products much more generous preferences than Congress is even considering giving ours. „9 (John B. The New Republic ―Those Who Live In Glass Houses (more On Buy America)‖ Officials from Canada and European Union have complained loudly that a provision in the House stimulus bill that requires American steel and iron for infrastructure projects violates the World Trade Organization rules. Tucker concludes: Translated out of trade lingo. iron and steel a leg up over the foreign competition for transit projects. But guess what? They don't. So these complaints--and the similar outcry among corporate lobbyists in Washington--is base hypocrisy.tnr." Read it.S.S. and coal. While current U.

―Federal Aviation Administration (FAA) 49 U.S.Aviation FAA requires Buy America for steel and products DOT no date (http://www. Regional Administrators. and Center Directors upon finding that compliance with the Act would: (1) It would be inconsistent with the public interest. and (B) final assembly of the facility or equipment (4) Including has occurred in the United States.C. (3) When procuring a facility or equipment under the Airport and Airway Improvement Act of 1982: (A) the cost of components and subcomponents produced in the United States is more than 60 percent of the cost of all components of the facility or equipment. § 50101‖) Buy American The FAA will not obligate any funds authorized to be appropriated for any project unless steel and manufactured products used in such projects are produced in the United States.gov/buyamerica/index.dot.html#1605. Waivers The Administrator has delegated authority to grant waivers to this requirement to Director of Acquisition and Contracting. (2) The steel and goods produced in the United States are not produced in a sufficient and reasonably available amount or are not of a satisfactory quality. domestic material will increase the cost of the overall project by more than Other Labor costs involved in final assembly are not included in calculating the cost of components. . or 25 percent.

Applies to iron and steel products and their coatings that are to be permanently incorporated into the project. international obligations (World Trade Organization Government Procurement Agreement. 1995]. lexis) Importantly. in its 1983 rulemaking. The FHWA. 23 C. Read about international agreement obligations. U. 7-6-‘12 (―Cravaack: ‗Buy America‘ to put economy back on track‖ Congressional Documents and Publications. and ensure that more American steel is used in federal transportation construction projects. a nationwide waiver for specific ferryboat parts came into effect. ―Federal Highway Administration (FHWA) 23 U. Maintenance Reliability Technician at United .S. the amendment closes the 'segmentation' loophole by ensuring that highway and bridge projects receiving federal aid cannot be 'segmented' to evade 'Buy America' preferences .gov/buyamerica/index.-EC Exchange of Letters [May 15.R.C. Specifically. iron. American-paid tax dollars are being used for these projects. U. § 635. (2) Such materials and products are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. and Canada-U. or domestic material will increase the cost of the overall project contract by more than 25 percent (this is a standing waiver codified in regulations when alternate bidding (3) Inclusion of procedures are used). although in the statute. All proposed waivers are first posted on the FHWA‘s website for a 15-day comment period prior to publishing the final decision in the Federal Register. In 1994. but all domestic products when available. Agreement on Government Procurement) do not apply. and manufactured products DOT. All waivers have to be posted in Federal Register.S. iron. Free Trade Agreements.html#1605.Highways FHWA requires Buy America for steel.410‖) Buy America The Secretary of Transportation shall not obligate any funds unless steel. no date (http://www. steel production. secure U. § 313 – Buy America. Other Labor costs involved in final assembly are not included in calculating the cost of components.S." said Kraig Grivette. and manufactured products used in such project are produced in the United States. After all. Waivers The Secretary of Transportation may waive the requirement if the Secretary finds that: (1) It would be inconsistent with the public interest.S. the Cravaack 'Buy America' steel amendment attached to the recent highway reauthorization bill will create U.dot.S. I believe government projects for highway and bridge construction should use not only domestic steel. and reduced/processed/pelletized iron ore. Lack of adequate domestic supply resulted in a 1995 nationwide waiver for iron ore. U. based on the public interest. Highway Reauthorization Bill requires Buy American for all steel used in transportation infrastructure US House of Representatives. jobs. "The Congressman's 'Buy America' amendment will create private sector jobs for Minnesota workers.S.F. determined that Buy America did not apply to raw materials and waived its application to manufactured products.S. pig iron.

Millwright at Arcelormittal Minorca Mine and Treasurer of USW Local 6115. Watch Rep. Cravaack was forced to defend 'Buy America' from attempts to gut two-thirds of existing 'Buy America' requirements and kill the jobs of the 3900 people directly employed by iron ore operations on Minnesota's Iron Range.Taconite (Cliffs Natural Resources) and Member of USW Local 6860. Previously. and not overseas. Closing loopholes to import cheap foreign steel and requiring that highways and bridges are built with American steel will increase jobs here in Minnesota. Cravaack's defense of 'Buy America' here. "Congressman Cravaack's 'Buy America' amendment will greatly benefit the Iron Range. Rep." said Steve Biondich. .

international obligations (World Trade Organization Government Procurement Agreement. Waivers The Secretary of Transportation may waive the requirement if the Secretary finds that: (1) It would be inconsistent with the public interest.000.-EC Exchange of Letters [May 15. and manufactured goods DOT no date (http://www.Railways FRA requires Buy American for steel. and supplies mined or produced in the United States. U. § 24405‖) Buy America The Secretary of Transportation may obligate funds for a project only if the steel.dot. Agreement on Government Procurement) do not apply. 246.S. or supplies-- if the Secretary decides that: . Chapters 244. or (A) manufactured articles. material.S. and goods produced in the United States are not produced in a sufficient and reasonably available amount or are not of a satisfactory quality. material.S. Other The requirements only apply to projects for which the costs exceed $100. Read about international agreement obligations. iron. U. (B) Waivers The Secretary may exempt Amtrak from this subsection (A) for particular articles. Free Trade Agreements.S. iron. produced. U.C. (3) Rolling stock or power train equipment cannot be bought and delivered in the United States within a reasonable time. and supplies mined. Labor costs involved in final assembly are not included in calculating the cost of components. and Canada-U. § 24305 Domestic Buying Preferences Amtrak shall buy only: unmanufactured articles. material. (2) The steel. 1995]. and supplies manufactured in the United States substantially from articles. National Railroad Passenger Corporation (AMTRAK) 49 U. material.S. or manufactured in the United States. or (4) Including domestic material will increase the cost of the overall project by more than 25 percent.S.C. ―Federal Railroad Administration (FRA) High Speed Rail Program 49 U. and manufactured goods used in the project are produced in the United States. iron.gov/buyamerica/index.html#1605.

produced. . Other The requirements apply only when the cost of those articles. material. are not mined. or supplies from which they are manufactured. or (B) rolling stock or power train equipment cannot be bought and delivered in the United States within a reasonable time.(i) the requirements are inconsistent with the public interest. or supplies bought is at least $1 million. or supplies. or manufactured in the United States in sufficient and reasonably available commercial quantities and are not of a satisfactory quality. or the articles. or (iii) the articles. material. material. (ii) the cost of imposing those requirements is unreasonable.

Impacts .

Trade .

. these provisions will lead to retaliation from abroad and cost pre-cious jobs in the United States. will be excluded from any stimu-lus-funded infrastructure projects." That is further explained in separate report language on the bill to clarify that it requires the U. which are not members of the government procurement agreement or do not have free trade deals with the U. European nations. Many leading U." said Malkiel. and world trade plummeted." he stressed. is returning to the bad old days of protectionism and economic nationalism. and the rule makes less money available for other construction projects that can employ many more workers. will signal to our trading partners around the world that the U. the California transit authority complied with state rules mandating the use of domestic steel unless it was at least 25 percent more expensive than imported steel. Malkiel. However.. "It would be short-sighted at this time to renege on promises we've made to the poor.S. said David Phelps. California taxpayers had to pay a whopping 400 million dollars more for the bridge. will be "applied in a manner consistent with U. but history has shown that 'Buy American' provisions can raise the cost and diminish the effect of a spending package." said the Princeton professor. Canada and Mexico signed the trade deals that guarantee their ability to bid on U. "Rather than stimulate the American economy." "We repeating the disastrous mistakes of the past.S. as one of his last acts. which U. he recalled. an economics professor at Dartmouth. The two 'Buy American' provision . President Herbert Hoover made the situation even worse by signing a 'Buy America Act' requiring all federal government projects to use American materials. will hurt developing world and trigger a global trade war." warned British Prime Minister Gordon Brown recently at the World Economic Forum in Davos." he warned. trigger trade war‖ lexis) The "Buy American" provisions in the 787-billion-U.S. Switzerland when referring to the "Buy American" clause. India. Douglas A.S. According to the legislation. they diminish the number of jobs we can create if our states and counties have to pay more for the steel and other products and they will professors' words were also echoed by former U. A domestic bid came in at 23 percent above the foreign bid." In 1930. dollar economic stimulus bill.S." said Irwin. In an article published by The Wall Street Journal." "Later.Money Shot Buy American causes retaliatory trade wars – escalates globally Xinhua News. „9 (February 17. "Our trading partners retaliated.S. the "Buy American" provision. actually. which exacerbate the global economic crisis. warning it would delude the bill's impact and lead to a global trade war." he noted. obligations under the international agreement. charged that the " Buy American" momentum is "bad economics.S.S. the author of "A Random Walk Down Wall Street. "While this is a windfall for a lucky steel company. business groups and economists also scolded the "Buy American" provision. government contracts. least of all the poor.. "That might sound reasonable. ――Buy American‖ provision to hurt developing world.." and by threatening to destabilize trade and capital flows. steel production is capital intensive.S. Irwin. because I think. which essentially shut off imports into the U. "it risks turning a global recession into a 1930s-style depression. a professor of economics at the Princeton University. and so the more expensive American steel had to be used.. President Barack Obama signed into law Tuesday. Brazil and over 100 developing economies.S. Trade Representative Carla Hills.S. should learn lessons from the past. to comply with obligations under the WTO's government procurement agreement and under the North American FTA and other U." Gary Shapiro. "Because of the large amount of steel used in the project. "I am very disappointed by ." must avoid he warned. "The promise that the 'Buy American' provisions keep with the letter of WTO commitments is a meaningless gesture -. president of the Consumer Electronics Association said in a statement released last week. he stated. Irwin stated that in rebuilding the San Francisco-Oakland Bay Bridge in the 1990s. agreed that the U. "Most economic historians now conclude that the tariff contributed importantly to the severity of the world-wide Great Depression. which prohibits the purchase of foreign iron. with the exception of transportation. goods from China. the U. Congress passed the Smoot-Hawley Tariff Act. "The thing we know about protectionism is in the end it protects nobody. "The 'Buy American' provision ..it contradicts recent statements by both President Obama and G-20 leaders to avoid protectionism." he added. executive director of the American Institute for International Steel." he said. just as the world economy was sinking. steel and manufactured goods for any stimulus-funded infrastructure project. free trade accords. Burton G.S.S.

3 press conference. The conferees will likely include House and Senate leaders and members of the Senate Appropriations and Finance and House Appropriations and Ways and Means committees. sources said. obligations in the WTO Government Procurement Agreement (GPA) and President Obama would also have authority to waive the Buy American provisions for countries that are signatories to the GPA or for other reasons that made them inconsistent with those obligations.S. They charge that the provisions run counter to the U.S. Switzerland over the weekend. tunnels. steel and manufacturing good in those infra-structure projects. The Senate amendment cosponsored by Baucus with Sens. Nine Republicans voted against the McCain amendment on Feb. railroads. bridges. canals." he said after a Feb. As originally written. John McCain (R-AZ) to strip all Buy American provisions from the bill. multiline mass transit systems. House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-MN) on Feb.S. The Senate is expected to wrap up work on the stimulus bill no later than today (Feb." said Hills.S. Byron Dorgan (DND). harbors. 9 which conferees to appoint." she told Xinhua. jobs.S. 4 White House Press Secretary Robert Gibbs clarified that Obama wants to make sure "that any legislation that passes is The "Buy American" measures were the most heated topic of discussion at the annual World Economic Forum meeting in Davos. took in the GPA. 4 threatened to actively work against the stimulus bill if the "Buy America" language is removed. By early this week. roads. Under the amended language. international obligations because of the exemptions that the U. requiring the use of iron. Already too many countries raised tariffs .S. and piers. Sherrod Brown (D-OH) and Daniel Inouye (D-HI) was introduced after President Barack Obama publicly said he wanted to find a compromise so that the stimulus bill would not run afoul of U. The Senate version of the stimulus goes further. the Buy American section of the Senate stimulus listed several types of projects that fall under the definition of "a public building or public work" project that would be required to use U. I'm not supporting it and I'm bringing a lot of votes with me. „9 (―Business Groups Focused on Killing ‗Buy American‘ Rules in Conference‖ lexis) Despite changes the Senate made to the Buy American provisions of the stimulus package. ambassadors of Canada.S." On Feb. and House and Senate leaders are expected to decide on Feb. It said these terms have the meaning they have under section 1 of the Buy American Act and include airports. Obama told ABC News that it would be "a mistake right now" to include provisions in the stimulus package "that are going to be a violation of World Trade Organization agreements and in other ways signal protection-ism. They are not satisfied with the Senate's approval of an amendment co-sponsored by Finance Committee Chairman Max Baucus (D-MT) that stipulates that Buy American provisions in the stimulus will "be applied in a manner consistent with the United States obligations under international agreements. 4 session of the House Steel Caucus.S. "I am very much against protectionist measures.-produced iron. 4. but is an early effort to exert leverage over the trade policy of the Obama administration. The first direct signal from a senior administration officials was the comments made by Vice President Joe Biden in a Jan.S. The rhetoric over the "Buy American" provision exploded after the the House passed its $819 billion stimulus on Jan. "If it's not in. 6). "This is just the wrong way to go. sparking a global trade battle – even if it doesn‟t the perception of protectionism triggers the impacts Inside US Trade." Buy American transportation investment violates WTO rules. Proponents say the change means little since the "public building or public work" projects that would have been covered in the original language will still be covered in the final bill and those projects are already exempted from U. It replaces it with language stating that the Buy America provisions "shall be applied in a manner consistent with the United States obligations under international agreements." The amendment was aimed at assuaging fears that the provision may violate U.S. obligations or send a signal that the U. House Majority Leader Steny Hoyer (D-MD) said the Buy American provisions debate would be worked out in the conference committee. the projects that would fall under the "Buy American" provisions would simply be defined as "a public building or a public work" without being further defined.. the European Union and Australia were weighing into the debate with arguments that the provisions ran counter to the need to keep the U. 29 interview with CNBC.S. 28 in a 244-188 vote that included a provision that would require the use of iron and steel in infrastructure projects in the package.S. But supporters of the Buy American provisions argue that the business efforts to kill these requirements are not fueled by the substance. pipelines. According to Buy American opponents.. dikes." ." The amendment passed by a voice vote on Feb. The provisions in the Senate bill as originally written did not violate U. But within five days. steel and manufactured goods. the remaining Buy American provisions still pose an obstacle to the international trade cooperation that they say is necessary at this time of global economic crisis. the amendment strikes the definitions of the types of projects that would be covered by the "Buy American" provision.have less money to spend on creating jobs. and regulatory re-strictions. where he refuted claims that the provisions were protectionist. commitment to a G20 pledge in November to "refrain from raising new barriers" to trade in the face of the economic crisis . obligations under the World Trade Organization Government Procurement Agreement or other bilateral agreements. was closing its market. Getting the provisions stripped from the final bill in conference may be hard because the Senate by a strong vote of 65-31 rejected an amendment by Sen. dams. exporters late this week vowed they will work to strike these rules completely in the conference committee. consistent with trade agreements and doesn't signal a change in our overall stance on trade in these economic times. several sources said. major U. He said he saw nothing wrong with including them since package was focused on generating U. 4. trade obligations since the projects outlined were carved out in the U. Specifically. During a Feb.

That's why we work so closely with the AmCham network around the Council of Chief Executives. we don't always see eye-to-eye. more competitive global economy. and to lead by example. 4 interview with BBC World. "[W]hat's the point of America saying 'all steel has to be produced here' if Korea then starts putting bans on U. Chamber is committed to doing so.S. Buy American provisions undermine domestic economic success and hamper international trade – states should be exempt from these provisions States News Service. September 30. But that 's an approach that simply won't work. And yet. Section of the North American Competitiveness Council. The U. it will worsen the global crisis that we're already in. Such provisions would be legal under WTO and NAFTA obligations. or as smartly as we must. is not stepping up on the worldwide stage as boldly. In a Feb.S. according to Peter Julian. it's a testament to the strong ties of friendship between Canadians and Americans that we can speak plainly to each other. argued on the floor of the House of Commons that Canada should include its own "Buy Canadian" provisions within the country's economic stimulus package. 4 statement. These winds have blown away millions of jobs and have left thousands of shop doors closed.S. leader of the New Democratic Party. or plain old tariffs--but it is protectionism nonetheless. but Prime Minister Stephen Harper responded that such provisions could spark a trade war with the U. a parliament member and the international trade critic in the party's shadow cabinet. 4 letter to Obama signed by 125 companies and business groups. motor vehicles. Because of our unique relationship and for other reasons. 2 letter to Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) that the "negative precedent set here in the United States can have repercus-sions around the globe and could provoke debilitating beggar-thy-neighbour policies. One in five American factory .S. or U.-Canada relationship by this new era of "Buy American.S. „9 (US Chamber of Commerce. we must find ways to compete and excel in a changing global economy. Protectionism can come in many forms--in the guise of economic stimulus.S. In the eye of this storm. at least. In a new. the United States. working in partnership with the Canadian It only makes sense that we work together to boost competitiveness and prosperity on both sides of the border. From softwood lumber to country of origin labeling to procurement practices. about the challenge posed to the U. But in my view. 3. autos. Chamber helps lead the U. we North Americans need to expand our engagement with the wider world--not shrink it. That world is changing.market open at a time of economic crisis. Julian said. Canadian and American workers and businesses are facing one of the harshest economic storms in nearly a century. 57 million American workers are already employed by firms that benefit from exports. But there is real reason to be concerned. On Feb. We can start by acknowledging that these commitments are being honored in the breach. according to Public Citizen. Australian Trade Minister Simon Crean said the "Buy American" provisions "invites" retaliation from trading partners. as vigorously. And that has huge implications for Canada. In fact. nearly half the global economy is centered in the Asia-Pacific region. an opposition party in Canada's parliament. ―The US-Canada Relationship in Era of ―Buy American‖‖ lexis) Turning Inward? Today. Today. Canada." Last week in Pittsburgh. For example. the first instinct is often to turn inward and to protect the remaining businesses and jobs. coal and all construction contracts issued by the Departments of Transport within their GPA commitments. Canada has excluded steel.S. "It's that retaliation that will send the world into a downward spiral . our two countries have a special obligation to lead. Together. globe. Most of the time. Public Citizen called criticism from EU and Canadian officials over the "Buy American" provisions "hypocritical" since both Canada and the EU have excluded "broader swaths of their procurement activity" from their GPA commitments than the United States. That's why we are proud to welcome a number of the best Canadian companies as our member. The Case for Open Trade Does this impulse to turn inward make sense for the United States? Trade is a larger share of the Canadian economy than it is for the United States. Canadian Ambassador Michael Wilson said in a Feb. Fierce new competitors and markets of great opportunity--from China to India to Brazil--are rapidly emerging. beef?" Crean asked. in the form of in-country barriers. and possibly even to be angry. And that's why the U." These arguments echoed those made by trade associations and corporations lobbying against the provisions letters sent to Congress and in a Feb. Jack Layton. the United States and 18 other major countries pledged anew to fight protectionism and strengthen the global trading system." In a Feb. which leads the Canadian Section. we are inclined to view that as normal.

Chamber issued a study. About 300. Canadian firms are now being excluded from U. Outside of road building. American companies would like to see American consumers buy their products.just in this sector. The Recovery Act included $7 billion in funding for municipal water and wastewater projects.S. relationship.S. Also. The Chamber helped get them modified so they did not violate our international trade agreements. The New Isolationism and Its Costs Nonetheless. Canada's voice was an important one at that moment as well. Last year. hurt the very workers and industries they are supposed to protect." This month. manufacturers rely on global production chains that integrate components from U. some out of ignorance.jobs depends on exports. entitled Trade Action .or Inaction: The Cost for American Workers and Companies.S.S. and foreign sources. American manufacturers are finding it difficult to comply with "Buy American" rules because it is often impossible to avoid sourcing at least a portion of their content from other countries.-made steel in transportation infrastructure projects has not been a huge shock to the system because similar rules have been around for 30 years. To borrow a phrase from the White House. at least some of the time.U.-Canada Free Trade Agreement entered The U. U. In August.S. this modest portion of the Recovery Act funds could "save or create" more than 200. It's self-defeating.S. and one in every three acres planted on U. But to give you a cast study. freedom. the United States was once again the world's largest exporter. the gains will quickly evaporate if other countries implement "buy national" policies in their own stimulus . Do the math. And the way to do that is through an open trading system where consumers--not the govern-ment--decide what they are going to buy. where we've got a real mess on our hands. in fact. "Buy American" rules were inserted into the economic stimulus package. Bilateral commerce surpassed $600 billion last year -. in labor unions and. and some out of pure self-interest. In February." too. many of which are not constrained by those international agreements. And more than $40 billion in economic growth to boot -. states and municipalities have never been forced to comply with "Buy American" rules in the past. just look at the $130 billion North American water and wastewater sector. And our manufacturing output has risen more than 80% since the U.S. But ninety-five percent of the world's consumers don't live in the United States. Of course.S. It is retarding economic recovery. trillion in exports. you can be sure we'll be hearing more about the cost of "Buy American" rules in those sectors. The "Buy American" requirement for U.000 American jobs -.000 people safely cross our borders every day. However. the U. This amendment resolved many difficulties at the federal level.S.S. The Chamber's Study While this may be true in general.if they weren't tied up in "Buy American" red tape. municipal contracts. This new isolationism threatens to eat away at America's tradition of openness. in the business community. and leadership in the world.S. the Office of Management and Budget has required states and municipalities to comply fully with the Recovery Act's "Buy American" mandates. known as the Recovery Act.that's a staggering $1. That's because many U.000 jobs and an additional $6 billion in economic activity. jobs. with nearly $2 into force. it is not true of "Buy American. The House Transportation and Infrastructure Committee reports that each $1 billion in infrastructure investment creates about 35. The study found that while "Buy American" rules in the Recovery Act will create a limited number of U. after meeting with Prime Minister Harper. This isn't just nativist and jingoistic.S. Recall the context here of economic crisis and a stimulus package that is intended to spend money and create jobs quickly. I'd like to explore this particular protectionist threat in some depth because it is significant implications for the Canada.based manufacturers from bidding on projects. We want them to "Buy American. "Buy American" may be the best illustration of how such policies can sound good--but. These voices reside in both political parties. President Obama said: "We have not seen some sweeping steps toward protectionism. This is unprecedented . This has in no way endangered the billions of dollars of trade taking place between" Canada and the United States. tens of billions of dollars in Recovery Act spending is being channeled to states and municipalities. Some do so out of fear. farms is for hungry consumers abroad. companies. Next month. Nonetheless.-Canada relationship is at the heart of the benefits Americans derive from trade. yes. retaliation by Canadian municipalities could result in billions of dollars in lost business for U. the "Buy American" rules are being interpreted in a way that bars some U. But when the housing and school construction funding starts to move. there are those in the United States who want to turn inward and erect new barriers to our markets .S.5 billion a day in goods. They live somewhere else.

Trade gentlemen. And a constant dripdrip-drip of protectionist measures will slowly but surely erode world trade and its tremendous benefits. . that are definitely facing a crisis of lost sales and potentially large layoffs due to "Buy American" rules. Chamber and many other voices in the American business community have submitted comments to OMB urging it to use that authority to lift the unprecedented burden of "Buy American" mandates from states and municipalities. Canada and the United States are more than neighbors. The U.S. and the economy. we must all be forceful advocates for an open and robust world trading sys-tem. Ladies and cannot let this become an era of protectionism. the net U. or even in Washington. That's a big number.000. Former President Bill Clinton showed that it is possible to be a politically successful Democratic president and be pro-trade. companies out of just one percent of this total spending. At this time of economic hardship for both our nations. The U. We believe the Obama administration will be stuck playing defense against protectionist proposals such as "Buy American" until it devises a forward-looking trade agenda of its own. Chamber of Commerce has expressed support for this proposal in comments to the Office of the U. I'm surviving by selling to Canada.S. At some point in the weeks ahead. and Aqua-Aerobic Systems of Illinois. This is precisely why the Canadian government is seeking this two-step approach -. federal government lacks the authority to negotiate such an agreement on behalf of states and municipalities without their consent. A Call for Leadership The solution to the protectionist threat is stronger trade leadership from the new U. Trade Representative. that seven million American jobs depend entirely on trade with Canada. more than allies. It took courage. we Representative. If foreign governments lock U. and a negotiated agreement later. one important message I have for you here today is: Do not think we Americans have forgotten this. more than friends.S. Chamber has conducted an intense public affairs and lobbying campaign.but not to sit quietly. Continue to make your voices heard. Instead.S. But what would happen if retaliation spiraled beyond "just one percent" to five percent? To ten percent? Beyond the cold statistics. The U. I personally have given hundreds of media interviews on this topic since January. The Canadian embassy and Canadian business groups have also done an excellent job making the case in Washington for relief from these counterproductive rules.programs. I remain optimistic that we will fix this. the American people." We've provided technical and legal advice on how to fix the problem. these problems have a human face as well. job loss could surpass 170. and I would ask our Canadian friends to show some patience and forbearance .S. though the OMB action I described above is our urgent priority. we have profiles of small businesses such as Aquarius Technologies of Wisconsin. A trade war would further destabilize an al-ready shaky world economy. OMB will issue its so called "final guidance" that may reflect that input. president of Wisconsin-based Aquarius Technologies.S. and the news media has done a better and better job getting the story out about the cost of "Buy American. Tom Pokorsky. The . wastewater work this year. the U.S. He has appointed a good man as U. To press for that outcome. As you know. On the Chamber's website. state and provincial. Not everyone in the United States. and municipal levels . Canada has also proposed to the United States that our two nations negotiate a bilateral agreement that would guarantee mutual openness of our procurement markets at the federal. and it paid off for the country. again and again. Such a negotiated agreement could take years.S. and the U. But while he has taken on other controversial issues with enthusiasm. And we're adding our lobbying muscle as well.S. The president has said many of the right things about trade. has said: "Buy American has stopped U.regulatory action now.S. his administration seems to be hesitant and uncertain when it comes to trade. It could fix this problem. Many of us have heard Ambassador Michael Wilson point out.OMB -- White House Office of Management and Budget has the authority to fix this mess. has lost his head in a nativist fever.S. administration. federal system makes it challenging." It's Not Too Late It's not too late. and winning that consent could take months or even years.

Each of the countries argue.S. in their June 1 comments. The provisions on federal procurement require that nearly all infrastructure projects funded by the ARRA use U. The commission highlighted three examples where EU companies have already been impacted by the new provisions : an EU company that claims the Transportation Security Administration has started purchasing from a U." Canada wrote. In their May 29 comments. Japan requested that the final rule include language similar to the Safe.S. Canada claims that the provisions "may cause delays and drive up the cost of projects. that the rule violates the spirit of a G20 pledge made in April not to create protectionist trade measures and could lead to retaliatory actions by U. which allows for a "minimal use" of foreign steel and iron as long as those materials do not exceed one-tenth of 1 percent of the total contract cost for projects funded through the stimulus. interim rule that implemented the "Buy American" provisions for federal procurement in the American Recovery and Reinvestment Act of 2009 . Effi-cient Transportation Equity Act: a Legacy for Users (SAFETEA-LU). supplier over an EU supplier without explanation. in some instances.S. Canada." the commission wrote. or feels it will be forced out of the market. . Accountable.S. and. This. This week. Flexible." Comments are due June 22 on the interim final guidance put out by the Office of Management and Budget on the local purchasing requirements for state and local government under the "Buy American" provisions. Japan.S. In its June 1 comments.S. lead to monopolies and supply bottlenecks in the U.S. according to comments released this week. ―Trading Partners Continue to Lean on US on Buy American Provisions‖ lexis) The European Union. steel. „9 (June 12. Korea. diplomats met with more than 75 members of Congress in a lobbying push to get them to keep "Buy American" provisions out of future legislation.S." "The anticompetitive effects of this shrinking supplier base may raise prices for U. consumers. Similarly. trading partners. some EU companies have been asked to provide documents not required by the provisions and an EU company that claims it must move into the U.Spirit of the Law Plan causes retaliatory trade measures by key allies Inside US Trade. requested a "minimum threshold on the usage of non-American iron. as they have done in the past. Canadian senior U. Japan argues.-produced iron. will ensure that the "Buy American" provisions in the ARRA are not more stringent than similar provisions in the past. In their comments. decrease product quality. the European Commission notes that the implementation instructions are "confusing and complex" and does not clearly identify to federal procurement officers how to apply the "Buy American" provisions. and manufactured goods. South Korea and China have all reiterated complaints on the U. The countries also make new arguments that the rule is too confusing and vague. steel and manufactured goods as long as doing so does not violate international obligations. " This could potentially lead to contracting officials taking what would appear the easiest manner to comply with the new provision by de facto excluding foreign suppliers of any procurement funded either totally or partially with the ARRA funds. market .

whose father and grandfather worked for Republic Steel in Youngstown.S. Brazilian integrated steel producer Gerdau SA (GGB) surged 14%. and Brazil's index shot up more than 8%. Mexico's benchmark closed up more than 5%." said Guillermo Mondino.S.S.68 billion. Equity plays The U. an analyst who covers the steel. Cemex.S.S.S. An exchange-traded fund representing the Mexican market (EWW) also jumped by 7." said Cooper. engineering and other infrastructure companies. But experts such as veteran steel industry analyst Charles Bradford fear a growing "protectionist" sentiment and efforts to restrict spending of billions in federal stimulus dollars targeted for infrastructure improvements in Pittsburgh and across the nation. „9 (Carla. while imports of copper and related products have more than tripled to $4. was sparked late last month when the House of Representatives first included the rule. Census Bureau data. The so-called "Buy American" clause.S. now more than ever I think we need to take an active first step in safeguarding working people. Latin American stocks surged back on Dec. emailed comments. imported more stands. 8.S. Global Investors. Should the clause go through as it one can at least expect "a temporary" pullback in shares of Latin American exporters. President Barack Obama earlier this week said that he didn't want to start a U. since the national highway system was created in the 1950s. Global MegaTrends fund (MEGAX) . a textile. trading partners including Canada. February 6. and use U. Mexico's Cemex SAB (CX) soared 27%. commerce and food-sector more could be at stake should the restrictions lead to a b. "The U. export Corretora in Sao Paulo. And the "Buy American" provisions for textiles could weigh on home-listed shares of Colombian companies that export such materials.S.6 billion worth of copper. mining. is key for Latin American countries. according to Raphael Biderman. A chorus of criticism from U.Retaliation Internal Link Buy American starts a global trade war – key trading partners will retaliate Mozee.-made equipment. a fourth-generation member of the United Steelworkers. pulp and paper industries at Bradesco analyst at Medellin-based InterBolsa. Brazil and the European Union. head of Latin America Research at Barclays Capital in The "Buy American" rules wouldn't be good policy for the U. trade war against its partners.-made textiles.S. the world's largest supplier of steel component iron ore. ―USW ‗Buy American‘ campaign stirs protectionist worries‖ Pittsburgh Tribune Review. It also calls for government employees uniforms to be made of U.S. is a staunch supporter of a growing "Buy American" campaign promoted by the union and some domestic manufacturers.S.S.8% as investors poured money into shares of companies poised to earn a cut from the potential bonanza of federal dollars. Among those leading the gains that day. In 2007. the U.S. already in the stimulus package passed by the House of Representatives last week. Trade war? But much Brazilian steel would be hurt because of U. are among those with extensive production bases in the U. and trade policies in particular. climbed 10% on their home markets.S. Argentine steel tube producer Tenaris SA (TS) . The firm's U. But makers Companhia Siderurgica Nacional (SID) and Usiminas restrictions. The Senate's version also seeks to favor a broader range of manufactured goods made in the U.92 billion between 2002 and 2007. ―What ‗Buy American‘ means for Latin American stocks‖ lexis) A clause in the $900 billion U. obligations under international agreements. of Bloomfield. Ohio. said Jairo Agudelo. by foreign companies. than $8. economic stimulus package. chief investment officer at Cabot Money Management. says the government's big infrastructure projects should rely on U. must be fully aware that whatever it does in policy initiatives. Buy American provisions on transportation infrastructure ignite retaliatory trade wars DaParma.S. climbed nearly 3% as part of that December rally. according to Robb Lutts.S. steel and iron." director of research at mutual-fund company U. iron and steel from Latin America and the Caribbean. according to U.S. Iron and steel imports have more than doubled to $3. and Vale (RIO) .S. Many of these stocks have held onto their December gains so far. as it would bog down trade activity "if you have all these protection measures . The Senate then included a clause stipulating that purchasing provisions will be "applied in a manner consistent with U. The restrictions as they stand now don't invoke goods made in the U. over those that are made overseas. such as Mexico which sells 84% of its goods to the U. and Mexican steel-maker Grupo Simec (SIM) . might mean trouble for some Latin American stocks. Cemex is the largest supplier of cement and ready-mix concrete to the U. they are likely to be emulated [on] the world stage.S.S. That day. „9 (Ron. Gerdau. which could be voted on by the Senate Friday afternoon. It remains unclear whether those companies would be hit by the "Buy American" restrictions." said John Derrick. "With the global crisis we're going through. which focuses on constructing. She was among a group of 20 USW members appearing before Pittsburgh City Council . March 18. such as Coltejer SA and Fabricato-Tejicondor SA. when details started to emerge about the incoming Obama administration's plans to launch the biggest infrastructure program in the U. lexis) Rebecca Cooper.S. as they have production plants within the U.

Already." This week. Steel Corp. that the stimulus is meant to stimulate the American economy and if we spend it offshore. "This is not about protectionism.S. the World Bank forecasts that global trade will . Buy America triggers protectionism – retaliation and tariffs Davis „9 (Bob. Masciantonio. a partnership that includes the union and manufacturing companies whose workers are USW represented. he said. The global turn to stimulus spending also may come wrapped in textile and organized labor are pushing to include strong " Buy protection. they might even hurt some U. highways. companies that rely on materials from other countries to produce their products. Bradford said such efforts could spark similar actions in foreign countries -. which is uniquely capable of creating four to five new jobs for each employed manu-facturing worker. "There is no such thing as free trade.S. executive director of the American Institute for International Steel. the Mexican government imposed tariffs on 90 U.S. He's the union's liaison to the Alliance for American Manufacturing. That has happened in past downturns. "But the concern I have is that these actions are getting a lot of press and sparking a great deal of confusion around the world. congressional Democrats and their allies in steel. Also. Stimulus spending will have only a "modest" impact on the domestic steel industry. Brazilian President Luiz Inacio Lula da Silva warned that countries seeking to help their economies should avoid imposing protectionist polices. in a show of support for a "Buy American" resolution.. January 12.and even trade wars. but we see it as seed corn where we get the economy rolling. To date. which supporters stressed won't violate any existing international trade agreements. and Mayor Luke Ravenstahl predicted that stimulus money may create as many as 10." Trade protection can deepen economic problems and shut off a potential engine of growth at a time when consumer demand and business investment are sagging globally.S. "I worry about the downstream consequences." said Ike Gittlen of the USW. including Canada.. During the 1980s. too. quotas on steel and automobiles because Tokyo's economy was humming. saying their aim is to assure that thousands of American jobs are created and U.wsj.-made products are purchased with stimulus dollars..-made goods. There was even a "Buy Indiana" announcement. America" provisions in a U." City Council yesterday unanimously approved the resolution. we had the same economic problems we have today. director of public policy and government affairs for U. "The language in the resolution will help revitalize the American manufacturing base. After that. the chief executive of steelmaker Nucor Corp." he said. the union has worked to help get the resolution introduced in more than 600 cities. as each country tries to ensure that its industries benefit.com/article/SB123171020324471871.S. stimulus program that would limit spending to firms in the U. Brussels and Washington for import protection. and when it happened then.2 billion is expected to come to Pennsylvania for such things as highway and bridge improvements. "Buy American has been around since the 1980s. Nonetheless." "This is . making it much harder for any government to turn the other cheek. http://online. a Washington trade association that represents steel importers. they said. referring to talk in that state about restricting purchases of steel from other states. More than $1." Gittlen said. Tens of thousands of jobs were lost." said David Phelps.000 jobs in the city. with Pittsburgh among the hardest hit in the 1982 recession. Already European officials are crying foul.. said Bradford." said Daniel DiMicco." said Christopher J. but other countries are saying they may do the same thing. Industries are starting to line up in Beijing. ―Surge in Protectionism Threatens to Deepen World-Wide Crisis‖) A wave of protectionism is swelling around the world that could further damage struggling economies.S. concern overseas already has sparked discussion of similar actions in other countries.yesterday." Bradford said. about using taxpayer dollars to purchase U. There are no clear economic winners now. he said.S. In the U.S. agricultural products and manufactured goods in retaliation for Washington's move to block Mexican trucks from U. but this time the restrictions may bite harder because of the global nature of the problems.html. Japan could afford not to retaliate against U.S. "Some people see this as an issue of protectionism. Wall Street Journal . "All trade is managed. "This is strictly an economic common sense thing. it just doesn't do that. "So far. who is pushing for Buy America measures. China has said they are not going to do anything. towns and states nationwide.S. we do our global buying as we've always done.

firms. Other countries are finding different ways to block imports.S. Mr. That would provide some political cover at home for governments that keep their markets open.S. Retaliation is commonplace.S. Expect a sharp rise in those numbers because the economic crisis deepened in the second half of the year. and Mexico are trying to resolve the controversy. it wouldn't join dumping cases for fear that some of its facilities would be targeted. and most U. which have broad bipartisan appeal The $25 billion auto-loan program approved late last year under the Bush administration was written in a way that largely excludes foreign auto transplants.5% from 25%. dumping cases have become potentially more potent.shrink by 2. If a steel company owns plants in the U.washingtonpost. Canadian provinces threatened to retaliate. House Transportation Committee Chairman James Oberstar.. That prompted a complaint by the head of the European Commission. as protectionist legislation tends to do.S.com/opinions/buy-america-a-self-defeatingprovision/2011/09/15/gIQATEK4lK_story. Some of the conflict was ameliorated by a proviso ensuring that the rule would be enforced consistent with international trade agreements. unveiled an $85 billion infrastructure program that would require the steel. a trade specialist at the Peterson Institute for International Economics. Yes. Indonesia is requiring importers to get special licenses as a way to control imports of clothing. But that‘s a cumbersome and time-consuming process — economic stimulus for lawyers. say. According to the latest WTO survey. It took months to settle this completely unnecessary battle. India raised tariffs on steel. Editorial. yes. ―‗Buy America‘: A self-defeating provision‖. Washington Post only way to head off global protection years. But more was required to settle the issue with Canada. to be labeled by country. contractors can get a waiver if using all-American products would increase the cost of the project by more than 25 percent or if necessary goods aren‘t manufactured or available in the United States. which are often very high. 11 (September 21. Last week. which isn't a WTO member. it imposes prohibitive tariffs. Under World Trade Organization rules. That same steel company can now file complaints in all three countries against a competitor in. Industries are also starting legal procedures at home to block competitors that get certain subsidies from their home government or that "dump" products abroad -. That gives them leeway to boost tariffs without violating WTO rules. it would take years to complete and wouldn't close many WTO loopholes. and state and local governments.S. But. iron and manufactured goods used in the projects to be made in the U. they do little to fend off protection. the president‘s new bill includes another pledge that international treaties will be respected. Mexico threatened to bar some meat imports from the U.hikes up cost Washington Post. not . And. WTO rules don't require government stimulus plans to be open to all bidders. http://www. plus the European Union. said a WTO official. John McCain for opposing restrictions on foreign firms. through an agreement exempting Canada that went into effect in February 2010. a free-trade think tank. has done for purchases by the Pentagon. international trade obligations do not apply when states and municipalities are the procuring entities. Whatever Mr. Ecuador announced in the fall that it was lifting tariffs across the board. compared with 61 investigations the year earlier. political leaders have been urging the completion of the tottering Doha global trade talks. the first decline since 1982.S. have signed on to a WTO code requiring meat imported into the U.. The is a global response.S. Much of the stimulus plan being concocted by President-elect Barack Obama could fall under Buy America provisions that don't violate any WTO obligations. while Russia. The U. increasing the levy on some imported meat to 85. aimed at ensuring that government purchases are open to foreign firms.1% this year. most of the funds will be channeled through state governments. although they haven't made enough concessions to seal a deal. Obama campaigned for a Buy American plan and attacked Republican Sen." said Gary Hufbauer. whose companies are part of a cross-border supply chain serving infrastructure projects that has grown up under the North American Free Trade Agreement.S. Congress is bound to push for explicit Buy America provisions. as was the case with the Recovery Act. the theory went. or how it would deal with foreign governments that exclude U. China to cripple it. Even those that sign the accord can take exceptions.S. Instead. While a pact would be useful. Almost half the complaints targeted China. a Minnesota Democrat. The Obama economic team hasn't said how open it will make the plan to foreign bidders. Obama decides. shoes and electronics. as the U. farmers viewed as retaliation for new rules "The surprising thing is how much room there is within the WTO framework to increase protection without overtly violating the agreement. and then apply lower tariffs. which U. trading partners. India and Brazil.html)KW The Buy America rule also angered U. That's starting to happen now. During the presidential campaign. countries establish formal tariff levels. Only a dozen countries. Global economic integration was expected to make dumping cases obsolete. While global trade deals have greatly reduced tariffs. 16 countries launched 85 new antidumping cases during the first six months of 2008. For Trading partners threaten retaliation due to Buy American. When a government approves a complaint. boosted levies on imported cars.S.meaning they sell at supposedly below-market prices.

since the Obama administration is in the middle of separate talks with Canada on integrating the two countries‘ border security operations and facilitating the safe flow of goods. and they are wondering whether they‘ll have to do the whole thing over. Not surprisingly. Canadian officials are up in arms about this news. . their exemption from the Recovery Act‘s Buy America provision expires at the end of this month. It‘s not the best time for another tiff with our northern neighbors.construction workers.

For its part. And in a final exemption that was added in the last round of negotiations on the draft legislation. the Centre has become a leading broker of knowledge and information on trade policy and sustainable development. Thus. http://ictsd. Korea. 4 February 2009. his first trip outside the US since The Canadian government has already signalled its unease with the domestic-sourcing provisions in the US stimulus bill.WTO Litigation Countries willing to file lawsuits against the US at the WTO ICTSD. as would goods from countries that have signed bilateral trade deals with the US. ICTSD engages a broad range of actors in ongoing dialogue on trade and sustainable development policy. However. ICTSD (International Centre for trade and Sustainable Development) aims to influence the international trade system such that it advances the goal of sustainable development. non-profit. lawmakers added a provision ensuring that the ‗Buy American‘ requirements would ―not apply to least developed countries to the same extent that it does not apply to the parties of…international But that US pledge not to violate its trade commitments provided little comfort for countries such as China and Brazil. products from the EU.‖ Brazilian agreements. or if an agency head deems it ―in the public interest‖ to use foreign materials. have signed the WTO‘s Agreement on Government Procurement. 12 February 2009.‖ the story said. (For background on the bill‘s passage through Congress. A story in the government-run Xinhua news service lambasted the ―potential protectionism embedded in the [domestic sourcing] provisions.‖ ―‘Buy American‘ has become particularly sensitive in a time that the world is facing sagging economy and slumping trade.‖ he added. ―(Going to the WTO) is a real option.net/i/news/bridgesweekly/40503/.) The controversial ‗Buy American‘ provisions require the purchase of US-made iron. The outcry from China was also strident. Japan.‖ Criticism from abroad and at home foreign minister Celso Amorim told a Brazilian television network on Monday. Reuters reported. In a swift and forceful reaction to the new US legislation.‖ Obama spokesman Robert Gibbs told reporters last week. many years. but we‘re doing it. please see Bridges Weekly. . would also be exempted from the ban. The legislation provides roughly US$ 48 billion for transportation projects and another US$ 30 billion in infrastructure improvements and other spending. http://ictsd. It is the dispensing of those funds that would be subject to the ‗Buy American‘ requirements. Switzerland and a handful of other countries that. ―Criticism Grows as ‗Buy American‘ Rules Written into Law‖) ‗Buy American‘ provisions in the US$ 787 billion stimulus bill that was signed into law yesterday by US President Barack Obama have sparked sharp rebukes and threats of legal challenges from US trading partners. Democrats in favour and Republicans opposed. http://ictsd. echoing the Great Depression in the 1930s when a wave of tit-for-tat protectionism chocked global trade and prolonged the economic pain. whose exports would not be protected from discrimination under existing world trade laws. Brazil indicated earlier this week that it may challenge the ‗Buy American‘ rule at the WTO‘s Dispute Settlement Body.‖ Amorim said.net/i/news/bridgesweekly/39776/. and nongovernmental organization. the White House has said that it is confident that measures have struck the right tone. while also ensuring that the language doesn‘t create unnecessary trade disagreements in a time of economic crisis. taking office four weeks ago. like the US. the purchase of foreign products under three scenarios: if US goods are not available in sufficient quantity or quality. In advancing its mission. The Senate and the House of Representatives both approved the final compromise version of the bill late last week. the law allows steel and manufactured goods for all building or public works projects that are funded by the massive spending bill. Moreover. ―It‘s a bad sign…It‘s not positive at a moment when the world economy is trying to revive. if the use of domestic material would increase the cost of a project by more than 25 percent. The new law will no doubt be on the agenda during Obama‘s upcoming visit to Canada on 19 February. „9 (February 18. and Bridges Weekly. products from NAFTA members Canada and Mexico would in theory be safe from the restrictions. though.org/i/news/bridgesweekly/41050/. But Washington maintains that the domestic-sourcing requirements are in line with its international trade commitments and that the measures will create vital manufacturing jobs at home. or GPA. with members of Congress voting largely along party lines. ―I think where we ended up with the ‗Buy American‘ provision is the right compromise that respects the ‗Buy American‘ laws that we have had on our books for many. The legislation also states that the domestic-sourcing provisions must be implemented in a way that does not violate Washington‘s obligations under international trade rules. As an independent. ―It‘s a complex legal analysis.

A2: Won‟t Violate Trade Laws
Even if Buy American doesn‟t technically violate trade laws it still angers key trading partners, causing disputes Washington Post, ‟11 (September 22, ―Their View: The jobs bill‘s self-defeating ‗Buy America‘‖
lexis) The Buy

America rule also angered U.S. trading partners, as protectionist legislation tends to do. Some of the conflict was ameliorated by a proviso ensuring that the rule would be enforced consistent with international trade agreements. But more was required to settle the issue with Canada, whose companies are part of a cross-border supply chain serving infrastructure projects that has grown up under the North American Free Trade Agreement. Canadian provinces threatened to retaliate. It took months to settle this completely unnecessary battle,
through an agreement exempting Canada that went into effect in February 2010. Yes, the president's new bill includes another pledge that international treaties will be respected. But, as was the case with the Recovery Act, most of the funds will be channeled through state governments, and most

U.S. international trade obligations do not apply when states and municipalities are the procuring entities. And, yes, contractors can get a waiver if using all-American products would
increase the cost of the project by more than 25 percent or if necessary goods aren't manufactured or available in the United States. But that's a cumbersome and time-consuming process economic stimulus for lawyers, not construction workers. Not surprisingly, Canadian officials are up in arms about

this news; their exemption from the Recovery Act's Buy America provision expires at the end of this month, and they are wondering whether they'll have to do the whole thing over. It's not the best time for another tiff with our northern neighbors, since the Obama administration is in the middle of separate talks with Canada on integrating the two countries' border security operations and facilitating the safe flow of goods.

A2: Empirically Denied
Past Buy American didn‟t cause trade wars because it was watered down Cohn, „9 (Peter, ―Hoyer: 'Buy American' Language Might Be Watered Down‖ National Journal‘s
Congress Daily, lexis) House Majority Leader Hoyer today suggested that "Buy American" provisions in the stimulus package stipulating the use of U.S.-produced materials in infrastructure projects may be watered down in conference. As currently drafted, the Senate's $884.5 billion version includes language from Sen.Byron Dorgan, D-N.D., that would require the use of U.S. iron, steel and manufactured goods. That is more expansive than the $819.5 billion House version, which applies only to iron and steel as well as the textiles used in making uniforms for airport-security workers. Hoyer said today that he has discussed the matter with Canadian Ambassador Michael Wilson, who said he was "very concerned about the flow of economic activity." Hoyer also said concerns raised by European Union Ambassador John Bruton were "justified." Hoyer stressed that U.S. taxpayers expect the stimulus to benefit domestic companies and workers, but he expressed sympathy for U.S. trading partners who have objected to the "Buy American" provisions: "I think the concerns are relevant. The Senate bill goes much further than the House bill, and I'm sure that will be a matter for discussion after the Senate passes the bill." Senate Finance ChairmanMax Baucussaid today he was "somewhat concerned" about Buy American provisions but that he had not seen the final language.

Canada

it could be a bad omen for trade well beyond North America. the nation's largest industry association. highways. and Canada can't avoid entering into a trade war. "We only have ourselves to blame. Canadian provinces never signed onto the agreement before the deadline." . including one to open state and local government contracts to international bidding. But in the mid-1990s. In addition to ignoring Canadian complaints about "Buy American. "We are operating in such an integrated supply chain." the administration has also failed to resolve a dispute over Mexican truck access to U." said J. lexis) "Buy American" was not specifically intended to ensnare Canadian companies. God only help the rest the world. ―‗Buying American‘ Puts Strain on US Trade with Canada‖ Washington Post. Michael Robinson. „9 (Annys. when this specific agreement was negotiated.S.US-Canada Trade War Internal Link Buy American provisions on transportation infrastructure ignite trade war between the US and Canada that spills over globally Shin.S. it's difficult to restrict one market without hurting another . Canada is getting ready to submit a proposal to the Office of the U. Trade Representative designed to close that particular gap in free trade. And a USTR spokesman said the United States was "open to negotiations." said Jay Myers. Canadians say that if their concerns with "Buy American" are not addressed soon.S. August 11. The provision applies only where it does not violate existing international trade agreements. a trade attorney with the law firm Fasken Martineau Dumoulin in Toronto. chief executive of Canadian Manufacturers and Exporters. " If the U." But it has not always been clear whether addressing the concerns of major trading partners is a priority for the Obama administration.

saying "Buy American" procurement restrictions in the Obama administration's jobs package threaten jobs both in the United States and Canada. President Barack Obama included in his administration‘s jobs bill last month. Jacobson went to great lengths to defend the ―Buy American‖ initiative that U. Feb. Myers said. "You don't create jobs by restricting business opportunities between the world's two largest trading partners. the group said in a news release Wednesday. "Buy American" provisions might also make it more difficult to obtain Republican support for the jobs legislation.S. Here in Canada. October 18.. The Canadian government will raise its concerns with both the Obama administration and U. The CME noted that the language in the jobs bill harks back to provisions in the stimulus package. many U. ‟11 (Mark. . Canada had won an exemption from Buy America provisions in a $900-billion stimulus bill in 2009. applauding Fast for addressing a "serious issue" by quickly launching talks with officials in the United States.S.S. market. 2010).S.com/2011/10/18/%E2%80%98buyamerica%E2%80%99-provision-won%E2%80%99t-harm-%E2%80%98strong%E2%80%99-u-s-canadarelations-diplomat/. Congress "regarding measures that impeded access for Canadian workers and business to the U. Canadian manufacturers supply America's building. Buy American kills US-Canada Relations – no exemption Kennedy. http://business. lexis) Canada will oppose "Buy American" provisions in a jobs package proposed by President Obama. ―Canada opposes ‗Buy American‘ language‖ Metal Bulletin. Financial Post ―‘Buy America‘ provision won‘t harm ‗strong‘ U.S. market.S. and International Trade Minister Ed Fast vowed to press Canada‘s case in Washington against protectionist measures such as this. That agreement is as "relevant and important today" as it was in 2009. Myers added. stimulus package (AMM. "In this fragile economic recovery." Fast said. ‟11 (Michael. Procurement Agree-mentwhich allows Canadian companies to bid on projects that had been off limits due to the "Buy American" clause in the U. but did not get such treatment in Obama‘s second round of stimulus this fall. and state and municipal infrastructure markets and they could be "seriously affected" if new restrictions become law .financialpost. The Americans Jobs Act contains "Buy American" language provisions related to infrastructure funding-provisions that run contrary to the principles of free trade." CME president and chief executive officer Jayson Myers said in the statement." Fast said. known officially as the American Recovery and Reinvestment Act (ARRA) of 2009. "They excluded Canadian manufacturers. September 16.S. Jacobson said this is ―making some folks see coffins among the flowers of the Canada/U. relationship‖.S. suppliers also lost business and jobs because their Canadian customers were shut out of the U. 9.US-Canada Relations Canada will backlash to Buy American provisions for transportation infrastructure investment Cowden." Myers said. Trade Minister Ed Fast said in a statement Wednesday.-Canada relations: diplomat‖) Mr.S. transportation. Canadian Manufacturers & Exporters (CME) echoed Fast's sentiments. but given the inte-grated nature of our supply chains." The United States and Canada last year reached a bilateral trade agreement-the Canada-U. we know history has shown protectionist measures stall growth and kill jobs. "Experience with the ARRA showed us that 'Buy American' procurement restrictions raised the cost and delayed the startup of infrastructure projects in the U. adding there is more to the issue than meets the eye. Canada's trade minister said Wednesday.S. he said. Prime Minister Stephen Harper called it a ―regrettable development‖ that would weigh down economic growth in North America.

Peter Morton Torstar News. LN) Canadian companies hoping to bid on the crumbling road and bridge system in the U. ‟12 (Buy America spectre rises again. "Specifically.S. Senator Sherrod Brown.S. or MAP-21. convinced the Senate to endorse a new and onerous Buy America regulation as part of a sweeping transportation funding bill called Moving Ahead for Progress in the 21st century Act. Pg. mostly steel and iron. But to support his state's struggling steel industry. would prohibit state governments from contracting outside the country if any part of the project receives U. would be subject to Buy America preferences." Although the amendment is mainly at Chinese steel and iron producers . 2012.S. May 10. Both the Senate and the House of Representatives are in complex negotiations to finalize the law. have long butted heads on various Buy America laws dating as far back as 1933. they should be spent on American-made goods. jobs through restrictions on imported construction materials.S. "When taxpayer dollars are invested in highway and infrastructure projects." Brown said earlier this year. if at least one contract for a project receives any federal funding under this act." Shehata said. Brown successfully included a new Buy America provision in the Senate bill that would essentially prevent foreign suppliers of steel and other construction products from bidding on any government contract that includes even the smallest amount of federal funding. said in a letter to the Senate and the House conferees this week. regardless of their funding source.S.Strict „Buy America‟ laws upset Canada. ." Amgad Shehata. Canada and the U. which is also known as the Surface Transportation Reauthorization Bill. The various Buy America provisions try to create U. may find themselves behind yet another "Buy America" law that would prohibit them from bidding on any government-funded construction project even if it has the smallest amount of federal funding. Canada thought it bought some peace in February 2010 when the two governments agreed on reciprocal bidding in each other's countries on infrastructure projects such as bridges and roads after President Barack Obama brought in a $787-billion economic stimulus bill. Hamilton Spectator. government funding. which was accepted by the Senate in March. the CABC feels Canadian bidders would get side-swiped . chair of the Washingtonbased Canadian American Business Council. "The proposed MAP Act includes provisions that represent a significant departure from existing 'Buy America' preferences. A17. Brown's amendment. U. "We leave our manufacturing sector vulnerable when we buy steel and iron from foreign countries. a Democrat from the steel-producing State of Ohio. then all contracts for a project.

We need to ensure everyone understands what is at stake without causing further harm to our linked economies. This is a principle we continue to uphold. 2009 Canadian and U. As border cities. close to 80 per cent goes to the U. further straining the relationship between the two countries.S. to further its own isolationist "buy American" funding is totally detrimental to our export-oriented economy.S. millions of jobs in Canada are supported by the U. tunnels and sewer and water system replacements. how are any of our companies going to continue to grow and succeed? With one of the highest unemployment rates in Canada. as of June 1. Free and open trade between countries will guarantee the most competitive product with the highest level of value is obtained and that secure jobs are created.Canada Economy Buy American provisions hurt the Canadian economy – causes tit-for-tat trade retaliation Boyd. The U. June 12.S. we are not going to help matters by retaliating. Clearly. pledging they will only supply U. and vice versa. any project receiving state or local government assistance has "buy American" funding rules.. worth over $560 billion each year.S. While the provision would not violate any international trade agreements. We have seen time and time again that protectionism does not work. create jobs and grow. The truth is that protectionism will only hurt both countries. Our companies need to compete. Calif. The Windsor-Essex region would be heavily affected--over $1 million in trade revenue crosses the border every minute. and now some reports state that Canadian manufacturers have been presented with affidavits to sign. It is understandable that countries are trying to keep and create jobs. Canada will never grow or get out of the current economic crisis..S. ―Problems presented by ‗buy American‘‖ Windsor Star. Board Chair Windsor-Essex Regional Chamber of Commerce. It is imperative we resist the temptation on this side of the border of promoting "buy Canadian. By shutting ourselves off to those markets. Still. It's only fair because at the end of the day it's taxpayer money that's being spent.S. They used to say that ." Any reaction on the part of the U. Since its inception in 1876. and Canada have the world's largest trade relationship. Windsor and Detroit will be hurt by these restrictions. By limiting our trade. to eliminate the "buy American" funding policy that exists today. Canadian pipefittings were ripped out of the ground and replaced with American-made fittings at a construction project at Camp Pendleton. Blocking other countries from bidding on Canadian projects will result in those other countries opting for their own protectionist measures. The town of Peru.-made materials. the Windsor-Essex Regional Chamber of Commerce has been opposed to protectionist measures. bridges. The stimulus funding on both sides of the border offers billions of dollars for building infrastructure such as roads. all iron and steel materials used to build new projects with stimulus money must be U. Already Canada is feeling the pinch from these protectionist measures. ‗9 (Lindsay. yet we can see this border thickening in numerous ways over the past few months. Thanks to open trade. Out of 100 per cent of goods exported in Canada. This is hurting Canadian firms that are now shut out of many new contracts on which they would otherwise have the ability to bid. What we have to do is work through our federal and provincial governments and our chamber network. and Canada have the world's largest undefended border. including the U. President Obama pledged to reject protectionist measures. Ind.S. travellers are required to present a passport or the enhanced drivers' licence that Ontario and Michigan have agreed upon when crossing the border. Whoever is most competitive on either side of the border should be getting that work. Windsor cannot afford to lose more of its trade-dependent business. lexis) The U.S. Chamber of Commerce. Besides the "buy American" provision. recently rejected sewage pumps from their usual Canadian supplier.S. We definitely do not want to see any new barriers to our trade relationships. so protectionist measures may look tempting.-made. In February.

"To enhance our countries' collective competitiveness.S." Although the amendment is aimed mainly at Chinese steel and iron producers. ." said Shehata. In 2010. 2012. said this week at the first of what is expected to be a number of House-Senate meetings. have the largest bilateral trade relationship in the world. can get into the game. the CABC feels Canadian bidders get side-swiped. "We leave our manufacturing sector vulnerable when we buy steel and iron from foreign countries. Sen. The CABC. not economic growth in both the U.when the U.S. "When taxpayer dollars are invested in highway and infrastructure projects. and Canada given the integrated nature of our two countries' economies. „Buy America‟ provisions hurt Canadian growth – also turns the case. a Democrat from California.8 million American jobs. May 10. "'Buy America' provisions applied to Canadian companies will inhibit . The Toronto Star. and Canada work together. Sen. Canada gets a cold. vice-president of the delivery service UPS. it is important to reduce barriers to trade and investment and transition away from outdated 'Buy America' provisions that fail to recognize the integration of our economies." Brown said earlier this year. eight million American jobs are linked to trade with Canada. called for both the House and the Senate members to consider a special exemption for Canada so that "purchases of goods from Canada (have not been) deemed to violate this agreement.S. they should be spent on American-made goods. too. when the U. Barbara Boxer.S. Brown successfully included a new Buy America provision in the Senate bill. it was $527 billion. create. We should be saying.S. LN) To support his state's struggling steel industry. the rest of the world wonders how they. sneezes. that the Senate version of the bill would create as many as 1. in a letter to the conference committee. Canada and the U." Neither the Senate nor the House politicians have responded yet.-Canada agreement. As well. ‟12 (Bill aimed at Chinese steel and iron could side-swipe U.

Other .

a "Buy America" mindset in Washington stands in the way of meeting core objectives and may lead to policies that disadvantage the overall U.S. Of the U. http://www. in helping solve America's energy challenges. which is 34. These companies employ a large segment of the American workforce: over 5. says U. job creation.Economy Buy America hurts our economy – leadership Organization for International Investment „9 (November 30. foreign direct investment in the United States by Insourcing Companies remained strong and reached $325. "Achieving U. However. government leadership is essential to address America's energy challenges.the hightest amount ever. 4. a per-worker average of $73.11. A main component of finding solutions will come from initiating full partnerships between the government and private-sector companies.6 billion. "The Obama Administration. Insourcing Companies. This Administration has the ability to directly affect decisions to invest and generate jobs in the U.S.S. which have a direct bearing on foreign investment and U. . ―‘Buy America‘ Mindset in Government Programs could Impact the U.S.‖ Washington. private-sector non-residential investment and total compensation at Insourcing Companies in $403. Insourcing Companies have long been integrated into the U. employees of Insourcing Companies 12.html.S.2 percent.C.org/newsroom/ofii-press-releases/110-qbuy-americaq-mindset-in-government-programs-could-impact-us. compared with the union-represented share of employement of all U. The report.3 billion . economy.– The Organization for International Investment (OFII) today released a new paper highlighting the many contributions of U. Nancy McLernon. businesses of just 8. i.2% of total U.S." by Dartmouth Professor Matthew Slaughter.ofii. said.290.. has an ideal opportunity to eliminate uncertainty which has been created from the implementation of a government energy program that restricts the inclusion of Insourcing Companies. As such. D.S.6 percent of total private-industry employment. economy. particularly going into Copenhagen's global climate summit next week.7 percent above the average for the rest of the private sector of $54.124.S.S.5 million Americans work for Insourcing Companies.S. by setting policy that encourages the full participation of Insourcing Companies. OFII President and CEO.e. the paper warns against government policies that severely limit the participation of the millions of Americas working for these firms.4 percent are covered by a union collective-bargaining agreement." "An isolationist approach in one goverment program has generated uncertainty on eligibility for all government programs.S. Energy Goals: How Americas at Insourcing Companies are Already on the Job." McLernon stated. operations of foreign companies. They deploy $183 billion in capital investment . Even during the recession year of 2008.

17. are facing delays due to the law's procurement rules. states.7 billion House version of the SRF reauthorization bill. ―Senate urged to drop ‗Buy American‘ rules from Water SRF funding bill‖ lexis) Industry and state officials are pushing to keep "Buy American" procurement provisions out of the Senate's pending bill to reauthorize EPA's clean water and drinking water state revolving funds (SRFs). approved last month. . this would be a death knell" to the water treatment industry. according to a Congressional Research Service report. the day President Barack Obama signed the stimulus law (see related story). Delays to and problems with to the stimulus SRF funding could pose difficulties for stakeholders. 2008 and before Feb. or were funded prior to the start of the current fiscal year last October. The push comes as the stimulus law's "Buy American" provisions are already causing delays to proposed water infra-structure stimulus projects amidst uncertainty over how far the provisions will reach. fearing the broad scope of the requirements could frustrate future water infrastructure projects.which the House-passed SRF reauthorization bill mirrors -. „9 (April 13. leading to fear over the consequences of the issue not being quickly resolved. At a recent water treatment industry conference. "In the worst case scenario. Relevant documents are available on InsideEPA. though it only applies to eligible projects for which debt was incurred on or after Oct. which would inhibit a slew of projects.com. The White House Office of Management & Budget (OMB) April 3 released additional guidance that offers some flexibility from the requirements." and EPA is slated to soon issue a definitive guidance for the SRF program. Another obstacle in terms of the stimulus law's "Buy American" provision is its relatively high threshold for waiving it for increased costs. State. But congressional staff are telling stakeholders to prepare for "Buy American" language in any future authorization and appropriations bill. EPA recently waived the "Buy American" requirements to allow some already-funded water infrastructure projects to refinance loans to access the more attractive financing options the stimulus law provides.is written so broadly as to jeopardize potential future water infrastructure projects. But as the season turns from fall to winter.Water Infrastructure Buy American undermines the effectiveness of water infrastructure projects – difficult to acquire domestic material Water Policy Report. an industry source says. 1. 2009. construction will become more difficult. sources say. industry and EPA sources say if "Buy American" provisions are applied in the broadest possible way. for instance permitting foreign components to be used in American-made "manufactured goods. The 6 percent difference is usually compared for each domestic product against other foreign products but in some cases an aggregate cost increase among products is considered. it would prohibit the use of a product containing any components made by a foreign manufacturer. While "Buy American" provisions have been included in various bills over the years. sources say the stimulus law lan-guage -. The industry source says that only 5 percent of water treatment equipment would be considered a manufactured good produced in the United States under that broad definition. participants said the "best case" scenario would be for stimulus projects to begin in the third quarter of fiscal year 2009. The $18. because many components of water treatment systems are not available domestically. steel and manufactured goods produced in the United States. EPA and law-makers who have all stated their desire to use the results of the funding as evidence for future baseline increases. includes such a provision that mirrors the stimulus laws' strict requirements that projects funded through the law use iron. A Democratic aide says that similar provisions in the past generally set the "cost premium" that allows "Buy American" to be waived at six percent. Some projects that have not yet been funded.

Answers To .

insisting on a strict "Buy America" approach to U." Perl says.changing.including Munich-based Siemens.200 employees supporting rail manufacturing in the United States. that would be 100% Buy America." speed rail. So that means some subcomponents could then be imported. "But they're Until this thing becomes a permanent. "But if we want true high-speed rail. Without the technological knowhow and institutional knowledge. Siemens is "rather confident that we would be able to fulfill either requirement. high-speed rail "is the equivalent of Bangladesh saying we're going to develop a space program with entirely indigenous experience and technology.S. NASA existed. but there was a diving board to leap from. The Buy American requirement of the act generally requires that grant recipients use iron. because we don't make them." Hauck adds." Kunz says. Lack of clarity for Buy America compliance prevents rapid program implementation GAO. recipients report that guidance on the Buy American requirement was difficult to understand and ever." "If you take the current "Buy America" requirement that is being talked about in Congress for [high-speed rail] projects because they have stimulus money or federal money in them." Perl says. though. Siemens plans to hire an additional 250 people at its U." Kunz says. ―Mixed Signals‖ Industry Week. understandably.S." says Perl.S. Kunz notes that most of the major players in high-speed rail -.S. want to see their tax dollars directed toward American manufacturers for public projects such as high- are no U. but only to the first level of the bill of materials. content. ―Opportunities ot Improve Management and Strengthen Accountability Over States‘ and Localities‘ Uses of Funds‖ lexis) Regarding Buy American requirements. none of these companies are going to invest a dime here. who is director of the Urban Studies Program at Simon Fraser University in Vancouver. "so two levels down the bill of materials. content. it's a moot point. some recipients found that it was unclear how to comply with the Buy American requirements in a reasonable way and that the guidance was lacking or difficult to understand.-based manufacturers of high-speed trains. to build 70 electric locomotives for Amtrak as part of a $466 million light-rail contract awarded in October. consistent program with money every year.already have light-rail manufacturing facilities in the United States. Paris-based Alstom and Montreal-based Bombardier -. The Amtrak contract includes a "Buy America" clause mandating 50% U. ‟10 (Government Accountability Office. "All of these companies have said they will scale up and start producing [high-speed trains] here in America once they see a bunch of orders. I grew up here. June 1." Perl is convinced that the lack of domestic manufacturing capacity is the biggest obstacle to high-speed rail gaining traction in the United States. Until a majority of U.S. and manufactured goods produced in the United States on all Recovery Act-funded projects. steel. Colorado Springs officials said that DOE did not have a list ." Hauck points out. ‟11 (Josh.S. and there were scientists and engineers and all these people [to support the effort]. content or 100% U. Siemens' Hauck estimates that his company has 1. I care about my country. September 20. For example.A2: Project Efficiency Buy America hurts program efficiency – US lacks the material and capability which takes out political support for the program Cable. "I'm American. rail facilities over the next year or so. lexis) WILL 'BUY AMERICA' DERAIL THE PLAN? As the political and public debate over high-speed rail rages on. "It's like stepping on the brake and putting on the gas at the same time. However. "It was a big leap for them to take. And I don't want to see all of our jobs exported all over the world. we're going to have to buy the trains from the people who are making them.S." Consequently. And therein lies the conundrum. "When President Kennedy stood up and said we're going to send a man to the moon. "but that content is measured all the way down to the subcomponent level. We don't have a diving board. But there Americans." he says. author and professor Anthony Perl believes the push for "Buy America" provisions in high-speed-rail procurement is only muddling the process. it's difficult "to move [high-speed rail] forward in a way that inspires confidence across political lines." not going to spend millions of dollars opening a factory for two train sets or four train sets and then the orders stop. lawmakers hop on board the high-speed-rail movement." Regardless of whether a high-speed-rail plan requires 50% U. "To me that is the biggest self-inflicted wound that the United States is struggling with.

"The investigation to date. it was difficult to determine the source of some components of a product and therefore whether the product could be used. Elkins' office is currently investigating several other cases. DOE officials said that DOE cannot recommend specific products. Hayward Baker's steel pipes were needed in the construction phase of the cleanup. DOE officials did note that they were concerned about providing lists of vendors because that might be viewed as an endorsement of particular vendors at the potential exclusion of other eligible vendors. In recent months.1 million has been seized and additional seizures are expected. which has received $3." Elkins told lawmakers. including guidance e-mailed to all recipients in May. ―EPA: Superfund contractor to pay $120K in 'Buy American' case‖ Greenwire.S.[Footnote 103] For Berks County. May 23.of eligible vendors and that trying to ensure compliance with the Buy American requirement delayed their light emitting diode (LED) street lighting. due to the large number of eligible products and because of the potential ethical and liability concerns associated with a federal agency recommending specific manufacturers. DOE has made numerous attempts to help recipients understand Buy American requirements. a webinar in June. officials. including one where a foreign-based manufacturer and its U." . in part.5 million in stimulus funds to help contain and treat acid rock drainage from a former gold mining operation. The company helps in ditch grouting and lining work aimed at reducing water contamination. including the execution of a search warrant. ‟11 (Emily. "Equipment valued in excess of $1. has determined that the equipment did not meet the substantial transformation requirements. subsidiary falsely certified that their equipment met the Buy American provision to get several stimulusfunded contracts. E&E Reporter. Pennsylvania. and subsequent notice to recipients regarding the guidance. Aff still links – Buy American provisions incentivize companies lying about compliance to receive federal funding Yehle. lexis) Hayward Baker is a subcontractor at the Gilt Edge site.replacement projects by at least 4 months. NASEO representatives said that DOE's guidance did not provide sufficient detail to enable officials to determine the types of brands or goods they could purchase and that recipients did not have the expertise to trace the supply chain of manufactured goods to determine origin.

" Vicente Wright. while "Buy American" would allow steel finished domestically‖"although melted and poured overseas "to qualify. president and chief executive officer of the Fontana. . "With our imported slabs. 2-27-‘12 (Anne. we cannot supply (these projects) and we‘re totally against that. making its California-finished products unusable in most federal projects. CSI sent a letter to customers in September urging them to contact their congressmen to use "Buy American" language in the reauthorization of the federal surface transportation bill (AMM. it should be a substantial transformation." " Buy America" is intended to bolster U. Oct. Calif. job creation. "Buy America. cold-rolled and galvanized sheet from domestic slab. ―CSI seeking more lenient ―Buy America‖™ language‖ Metal Bulletin Weekly. they should adopt a ―Buy American‖(TM) principle. Although CSI produces a portion of its hot-rolled.A2: Steel Steel industry hurt by Buy American – forces them to melt down imports before construction Riley." the language included in the most recent House transportation bill. lexis) California Steel Industries Inc. Calif. Instead of melted and poured.-based steel producer and slab converter. requires that steel used in govern-ment-funded infrastructure projects be melted domestically.S. told attendees at the Metals Service Center Institute (MSCI) Carbon Products Conference in Carlsbad. (CSI) continues to push for a more lenient interpretation of "Buy America" as it seeks to qualify its flat-rolled steel produced from imported slab for use in federally funded infrastructure projects. 3). We don‘t think that‘s fair. but according to Wright "Buy American" would have just as positive an impact on the employment rate." Wright said. "We think the government is assigning winners and losers. We serve the West Coast. much of its semi-finished feedstock comes from international suppliers." Wright said. "CSI has jobs. "Instead of the ―Buy America‖(TM) principle.

Politics .

28). ‟11 (November 11. With respect to spending. the bill would have set aside $50 billion for a variety of highway. Those provisions are opposed by the Canadian government. but garnered only 55 votes in favor (Inside U.Senate Minority Leader Mitch McConnell in a Nov. the White House has tried to move components of that bill as separate pieces of legislation. . Sens. Merkley's amendment required 60 votes to succeed. which has repeatedly communicated its objections to the Obama administration 1769). Oct. Trade. Another area is the congressional appropriations process. known as the Rebuild America Jobs Act (S. 1769 represented the largest infrastructure component of the jobs bill that President Obama introduced in September. Sen. which also included the Buy American requirements. 3. despite the rejection of S.S. rail and aviation projects and allocated $10 billion in seed money to establish a national infrastructure bank.S. 1769. On Nov. Trade.One Canadian industry source argued that. this source said. falling short of the 60 affirmative votes needed to move the bill forward. After the Senate rejected the president's jobs bill as a whole. Ben (Inside U. this source noted. For instance.Buy American Unpopular – Republicans Republicans oppose Buy American – seen as harming trade relations Inside US Trade. the Senate voted 51 to 49 in favor of the bill.7 percent income tax on individuals with income over $1 million. 3 statement.S. ―Senate Rejects Infrastructure Spending Bill With ‗Buy American‘ Rules‖ lexis) The Senate last week rejected along party lines a $60 billion infrastructure spending bill supported by the Obama administration that contained a "Buy American" clause requiring materials used in those projects to be produced in the United States. 1769 in part because it would have paid for the infrastructure spending through an additional 0. 3 floor statement urged his colleagues to oppose S. Buy American opponents should remain vigilant because these provisions could still pop up in other legislative or executive branch initiatives. 21). In a Nov. all Senate Democrats other than Nelson supported the bill. President Obama blasted Senate Republicans for blocking S. 1769. Oct. Jeff Merkley (D-OR) last month tabled an amendment to an appropriations bill that would have expanded Buy American provisions to the freight and rail sectors. This source warned that one potential area where Buy American provisions could surface is in the context of the White House's expected announcements of executive measures aimed at advancing some aspects of Obama's jobs plan. Nelson (D-NE) and Joe Lieberman (I-CT) joined all 47 Senate Republicans in voting against consideration of the bill.

Counterplan .

Buy America Counterplan .

.2NC Overview The aff is required to comply with current Buy American requirements that ensure all federal investment in transportation infrastructure uses only steel. The counterplan repeals current Buy American requirements which allows for foreign producers to compete for bids to complete contracts for transportation infrastructure projects. iron. There‟s no solvency deficit – only difference between the plan and the counterplan is that we don‟t mandate that all investment be in United States products. and products produced in the United States.

shows the jobs that would be needed to produce all inputs domestically in the United States.7 billion in expenditures. they are no longer increasing investment in the United States but instead are increasing investment in foreign contractors. Rail and Transit Industry: Investments and Job Creation.‖ in contrast. and another 9.org/system/files/Reviving-the-US-Rail-and-Transit-Industry. A slight majority (56 percent) of the jobs are created directly in the railroad rolling stock industry. Table 11 illustrates the direct and indirect impacts † on industry employment under the three investment scenarios described above. A substantial increase in U. About 70 percent of all jobs created by this investment would be in . http://www.worldwatch.S. the ―current domestic content‖ estimate yields 21. Reviving the U.S.A2: Permutation Permutation severs – resolution requires the aff to increase “investment in the United States” – extend Elkins – investment in the United States requires using products that are produced in the United States – if the aff breaks US Code and allows for the use of foreign contractors. 2 The estimate ―with current domestic content‖ does not count the jobs used to make inputs that are imported into the United States. The estimate ―with full domestic content.098 jobs. al 10 – professor of law and public policy at Northeastern University (Joan. Under the Business-as-Usual scenario of $2. investment in new passenger rail vehicles would primarily affect the railroad rolling stock manufacturing industry (NAICS 3365). In the United States means domestic content requirements Fitzgerald et. using two different estimates of employment.pdf) 9/10.217 are indirect jobs in other industries.

Aff .

States CP .

firms are given the work whenever permissible under existing trade obligations. At a time when unemployment is still over 8 percent. U. the current GOP presidential frontrunner. Mitt Romney. and Pete Stark).S. ―We are not helpless.gov/documents/organization/9359.S. legislation to provide preferences for American steel and manufactured goods in state-level procurement. ADF errs in asserting that the federal government coerced Virginia in its procurement for the Springfield Interchange Project. assistant legal adviser for international claims and investment disputes. states are currently considering.pdf.S.‖ Paul explains that the U. We must build high speed rail. including nearly $500 billion worth in California alone. ―No more Bay Bridge fiascos. John Garamendi. ‟12 (March 26.‘ Demands Accountability on U. Department of State. Chief NAFTA arbitration division. and U. has said he would bar procurement from China unless it provides reciprocal access for American products.S.S.R.S. And last week.3533) to strengthen Buy America requirements for transportation and infrastructure projects. Late last year. Said Paul. Momentum is already building for the Should Be Made in America campaign. U. the domestic-content specifications at issue fall within Article 1108‘s exception for ―procurement by a Party‖ regardless of whether Virginia voluntarily adopted the 1982 Buy America Act restrictions or was compelled to adopt them. including six from California (with three Members representing the Bay Area: George Miller. needs to repair trillions of dollars in crumbling infrastructure over the next decade. ―In the arbitration under Chapter 11 of the NAFTA and the ICSID arbitration rules between ADF Group Inc. To the contrary. the federal Highways Code expressly provides as follows: [th]e authorization of the appropriation of Federal funds or their availability for expenditure under this chapter shall in no way infringe on the sovereign rights of the States to . Representative Nick Rahall (D-WV) introduced the Invest in American Jobs Act of 2011 (H. or have recently passed. California Governor Jerry Brown signed legislation last year to permit local transit agencies to require 100 percent domestic content in purchases of transit equipment. economy would be to ensure that U. of America‖. Buy America Clodfelter and Legam. The Should Be Made in America campaign will argue that the most effective boost to the U. Senate unanimously adopted an amendment to improve the effectiveness of existing Buy America preferences for transportation projects while also closing loopholes. But we must make it in America.state. we can't afford to ship more manufacturing jobs to China at taxpayer expense. States may receive federal incentive for abiding by. and it is longstanding and sound policy for the federal government and some states. the U.S. Buy America is popular with voters.States Buy American 21 states have buy America provisions – completely bipartisan American Manufacturing. As a preliminary matter. New York Governor Andrew Cuomo's (D-NY) administration has asked construction firms bidding on the new Tappan Zee Bridge across the Hudson River to adhere to Buy America requirements. DOA: 7/14/12) Contrary to ADF‘s suggestion. Twenty U. In a 180-degree reversal of former Governor Arnold Schwarzenegger's decision to outsource Bay Bridge steel to China. ‗Should Be Made in America. The bipartisan bill currently has 41 co-sponsors. Infrastructure Spending‖ "It's time for our politicians to believe in American workers." said Paul. ADF‘s contention that the provisions of the NAFTA in question here were intended to promote the rights of state or provincial governments vis à vis those of national governments is without support in the NAFTA‘s text or its object and purpose. „2 (Mark and Barton. ―New national Campaign.S. We must rebuild our nation's crumbling infrastructure.S. and legislation to enhance Buy America preferences at both the federal and state levels is garnering broad support. http://www. No federal requirement obligates Virginia or any other state to apply Buy America provisions in its procurement.

The provisions of this chapter provide for a federally assisted State program. Virginia was free either to accept such assistance and apply the provisions. As is clear. the language of Article 1108 belies any such purported purpose – it does not Reply 28. And. ADF‘s argument rests on the false assumption that preserving and promoting states‘ and provincial rights is one of the NAFTA‘s objectives . ADF is thus incorrect when it states that the Buy America provisions in the 1982 Act amount to a federal requirement that the states are forced to administer. does the NAFTA suggest differentiate between procurement by different levels of the government of the Party in its exclusion of all ―procurement by a Party.‖ . the existence and extent of sub-central governments‘ policy-making independence from the NAFTA Parties‘ central governments is not a concern of the NAFTA. See as an object and purpose a desire that the NAFTA Parties‘ federal governments refrain from encouraging sub-central governments to adopt policies deemed to be in the national interest. Indeed. it would be odd for the NAFTA Parties to enter into an international agreement for the purpose of effecting changes to the relationships between their own central and sub-central governments. Virginia voluntarily chose to apply the Buy America provisions in exchange for obtaining federal funding for the Project.determine which projects shall be federally financed. or reject the assistance and procure goods without regard to the 1982 Act‘s Buy America provisions. 64. 107. Nowhere. most importantly. Contrary to ADF‘s contentions. however.

Politics .

3 billion project to replace a 2..S.) stimulus bill introduced yesterday in the House of Representatives replicates the Buy American restrictions included in the first package.Buy American Popular – Democrats Democrats support tightening restrictions on Buy America provisions Szakonyi. will ensure that all future bridges and similar transportation and infrastructure projects financed by U. not overseas. Key members of Congress . and Peter DeFazio.2-mile span of the San Francisco-Oakland Bay Bridge in July." said Jayson Myers. The two sides are still trying to work out a comprehensive deal to ease foreign restrictions on local and state purchasing before all the stimulus money is spent.V. It is entirely appropriate that this language be included in any upcoming job-creation measure. and will create and sustain good-paying jobs in our local communities &ndash.S. it is clear that these provisions would equate to greater investment.S. . „9 (Barrie. D-W. "While some would argue that Buy American is nothing more than a trade protectionist label. bridges." The strong protectionist sentiment in Congress is one of the reasons Ottawa has struggled to negotiate any easing of the U.sourced construction materials would be expanded from 60 percent to 100 percent by fiscal 2016.000 jobs for the Chinese instead of U. The bill allows exemptions to the Buy American provisions if there is an insufficient supply of the needed materials or using U.S.. Some House members want broader Buy American restrictions in second US stimulus package‖ Globe and Mail. president of Canadian Manufacturers & Exporters. One proposal under discussion would extend Buy American restrictions to purchases of machinery and equipment. lexis) Even as the Harper government tries to negotiate better Canadian access to U. Democrats pointed to how Chinese steel was used in the $6." said Rep. the requirement for U. "It's a perfect example of the restrictions winding up in other appropriations bills. The bill &quot. chair of the House highways subcommittee .including Mike Michaud.S workers. and greater job-creation. which set off a storm of protest among Canadian manufacturers because it blocked foreign-made products from being used on roads.are pushing for even stricter curbs on foreign bidders in a new round. December 1. materials would increase the cost of the project bymore than 25 percent. The prospect of a perpetuation of Buy American rules in any new round of spending sends a dangerous signal. The original bill only covered public works projects. A $75-billion (U." . taxpayers will be stamped 'Made in America' crafted with American workmanship. Under the proposal." Mr. such as firefighting equipment. ‟11 (Mark. stimulus projects. sewers and other infrastructure projects. ―Democrats push tougher protectionism. Nick Rahall. December 17. who is sponsoring the bill. curbs on government purchases.' Democrats want tighter Buy American requirements to protect American jobs McKenna.S. ―mocrats Push Tighter 'Buy American' Infrastructure Rules. "We have an obligation to create jobs in America. creating about 3.S. Michaud of Maine and fellow Democrat Bruce Braley of Iowa said in a recent letter to Senate and House leaders. Democrats in Con-gress are vowing to impose tougher Buy American restrictions in a new jobs bill.. They quipped it should be stamped 'Made in America but paid for by U. according to business groups in both countries. taxpayers. within the U.S. House Democrats want to expand provision from 60 percent to 100 percent‖ Journal of Commerce. countering a Republican plan to tie expanded energy production to transport funding. lexis) House Democrats proposed a transportation bill on Thursday that tightens 'Buy American' provisions on materials used in infrastructure projects. head of the House of Representatives trade working group. It's a smaller version of the earlier $787-billion stimulus bill. "It underlines the need to negotiate around Buy American.S.

John Garamendi.S.S. Representative Nick Rahall (D-WV) introduced the Invest in American Jobs Act of 2011 (H. ―We are not helpless. including nearly $500 billion worth in California alone. ‟12 (March 26. ―No more Bay Bridge fiascos. the U. ―New national Campaign.Buy American Popular – States 21 states have buy America provisions – completely bipartisan American Manufacturing. U. New York Governor Andrew Cuomo's (D-NY) administration has asked construction firms bidding on the new Tappan Zee Bridge across the Hudson River to adhere to Buy America requirements. At a time when unemployment is still over 8 percent. firms are given the work whenever permissible under existing trade obligations. Twenty U.S." said Paul. The bipartisan bill currently has 41 co-sponsors. and legislation to enhance Buy America preferences at both the federal and state levels is garnering broad support. has said he would bar procurement from China unless it provides reciprocal access for American products. and Pete Stark). Mitt Romney.S. states are currently considering. We must rebuild our nation's crumbling infrastructure.3533) to strengthen Buy America requirements for transportation and infrastructure projects.‘ Demands Accountability on U. needs to repair trillions of dollars in crumbling infrastructure over the next decade. the current GOP presidential frontrunner. In a 180-degree reversal of former Governor Arnold Schwarzenegger's decision to outsource Bay Bridge steel to China. we can't afford to ship more manufacturing jobs to China at taxpayer expense. Late last year. including six from California (with three Members representing the Bay Area: George Miller. And last week. Momentum is already building for the Should Be Made in America campaign. We must build high speed rail. Senate unanimously adopted an amendment to improve the effectiveness of existing Buy America preferences for transportation projects while also closing loopholes. and it is longstanding and sound policy for the federal government and some states. California Governor Jerry Brown signed legislation last year to permit local transit agencies to require 100 percent domestic content in purchases of transit equipment.S. Said Paul.‖ Paul explains that the U. The Should Be Made in America campaign will argue that the most effective boost to the U.R. ‗Should Be Made in America. economy would be to ensure that U.S. But we must make it in America. Infrastructure Spending‖ "It's time for our politicians to believe in American workers. Buy America is popular with voters.S.‖ . legislation to provide preferences for American steel and manufactured goods in state-level procurement. or have recently passed.

Uniqueness .

based on a survey of 229 banks in 110 countries.6 percent. but slowed down towards the end of the year. they can still cause irreparable damage to the trade finance industry. Euro zone export volumes fell 5. "Left unattended. These financial problems have diminished but have not disappeared.com/article/topNews/idAFJOE84G04F20120517) LONDON (Reuters) . Growth for all of 2011 was 6.2 percent this year and by 7. to expand by 5. . The International Chamber of Commerce said it expected trade.Global trade growth will slow this year and volumes are unlikely to regain their pre-crisis trend for at least another four years. After the collapse of Lehman Brothers in September 2008. global trade suffered the steepest slump since the Great Depression of the 1930s as banks pulled in their horns. according to a survey released on Thursday. driven by emerging markets.Trade Low Global trade low now Reuters 12 (May 27.reuters. the ICC warned. said. http://af. ―Global trade well below pre-crisis trend: survey‖. the life blood of the global economy.9 percent in 2011.2 percent in 2013." the report.

such as segmentation of contracts and projects. 5-29-‘12 (Mike. . loopholes have allowed the manufacturing of major transportation projects to be sent abroad.house.S. and manufactured goods used to construct federal highway projects are produced in the U. iron..gov/pressrelease/michaud-urges-buy-american-provisions-transportation-reauthorization) Despite current statutory ―Buy America‖ requirements mandating that all steel. The Senate-passed surface transportation reauthorization included an amendment to address these loopholes and would require the Department of Transportation (DOT) to make the Buy America process more transparent and prevent practices to circumvent Buy America standards. ―MICHAUD URGES BUY AMERICA PROVISIONS IN TRANSPORTATION REAUTHORIZATION‖ http://michaud. Maine Congressional Representative.No Buy American Now – Loopholes Loopholes currently prevent infrastructure investment from being Buy American now Michaud.

Link Answers .

Exceptions Solve Buy American exceptions must be submitted. it will be even more important that contracting agencies assess the availability of domestic iron and steel products during the design stage of a project so that unanticipated delays will not take place once construction starts domestic material is available. notification system to receive a notice regarding current waiver requests We have established an internet Web page titled: "Notice of Buy America Waiver Request" (http://www.fhwa. ―Action: Revised Policy for the Approval http://www.fhwa.dot. Dwight A. Federal Highway Administration. We encourage interested parties to subscribe to this .dot.cfm) to provide notification and the opportunity for public comment for every Buy America waiver.gov/construction/contracts/080313.gov/construction/contracts/waivers. contracting agencies should recognize that coordination activities following the comment period may result in a waiver decision more than 15 days after the initial posting.. While the statute provides for a minimum 15-day comment period.available when domestic resources are unavailable Horne.cfm) of Buy America Waivers‖. Please inform your respective State DOTs and local public agencies that waiver requests that are based on an adverse impact to a contractor's construction schedule will not be accepted when With the implementation of this system. 2008 (March 13. FHWA's policy provides for the consideration of a Buy America waiver when it is consistent with the public interest or when satisfactory quality domestic steel and iron products are not sufficiently available. it is necessary for all waiver requests to be submitted to this office for review. Due to the statutory requirement for the Secretary of Transportation to implement an informal public notice and comment opportunity for each waiver. . Director of Program Administration.

Fred Klose. These areas must be set aside for warehouse jobs related to international trade. the TWIC program has caused great pain for our hard working American citizens. "There are going to be a lot of costs that come up that nobody really was expecting. The ILWU supports SAFETEA-LU reauthorization. International Longshore and Warehouse Union. Sea Ports Ready for the Challenge?‖. Recently. Accessed through Lexis Nexis. there are no barge operators who have committed to this service. agriculture shippers have not committed to using the service. and Global Competitiveness Hearing.S. The ILWU argues the same can be said regarding the spending on port security projects. Customs. the Department of Transportation awarded the inland ports of Stockton and Sacramento with $30 million dollars of stimulus funds for the purpose of carrying agricultural products on barges from these ports to the Port of Oakland. No operator is currently talking to us about making this service a reality. seaports and surrounding areas to improve the movement of goods.projects that are certain to create good jobs and move our cargo efficiently. Doubling U.S. As far as we know. and bridge replacements .Aff Solves Trade Transportation infrastructure prerequisite to effective international trade Sundet. The ILWU represents longshoremen in British Columbia and though it is not our intention to take any work from them. and mitigate environmental damage caused by the movement of goods. In the context of that legislation. Coast Committeeman. The harbor maintenance tax sur-pluses should not be used to mask the federal deficit but should be dedicated to projects that will help provide the ca-pacity to double our exports over the next 5 years." The Department of Transportation is making an investment in cranes and docks for ports even though the "short sea shipping" project will not work in the long term. This is $30 million that could be spent on rail separation projects. The Corps of Engineers civil works budget should be fully funded to complete critical port maintenance and deep dredging projects. Furthermore. The ILWU is in full agreement with the Port of Portland regarding the need to keep industrial property around ports from being taken over by condos and apartments or other types of non-trade related development. particularly with the growing need for channels to accommodate a new generation of vessels that require deeper drafts. Due to in-competence. ―Senate Finance Subcommittee on International Trade. Of course the attention turned to security after the attacks on our country. This is important for job . Please see the attached article concerning a longshoreman from Portland who suffered at the hands of the TSA.S. Creating fast corridors to move exports and imports that benefit the entire nation as well as workers engaged in international trade became a top priority. according to ILWU officers who have decades of experience in the industry. How many new fences and cameras are really necessary? Is it an impediment to efficient trade to spend countless millions of dollars to radiate 100 percent of containers for export? Do we need to screen a sufficient number of containers that would create the same barrier? The TWIC program is a hugely expensive program that provides very minimal security benefits. we support a dedicated funding mechanism for infrastructure projects at U. executive director of the California Agricultural Export Council said. Congressional Documents and Publications. The ILWU testified before the House Transportation and Infrastructure Committee on the need to make investments in rail and offered ideas on space management at ports for the purpose of alleviating congestion and more efficiently moving cargo. and lack of concern by TSA employees. we do want U. fast corridors. policy to have the effect of moving and expanding port and trade related jobs away from the United States.S. Prior to 9/11. Exports: Are U. there was a great deal of attention given to the infrastructure necessary to relieve congestion in and out of our ports. delays. Any fees or taxes levied should not have the effect of diverting cargo to Mexico or Canada. ‟10 (Leal. but it is now time to prioritize the building of our infrastructure . These projects are essential to keep American ports competitive. DOA: 7-15-12) The ILWU provides skilled labor to handle containers for operators involved in loading and unloading containers on barges or ships.

The ILWU is in a constant battle with developers who want to encroach upon our ports. Thank you for inviting us to testify today on this important subject. Recently. we won these battles against developers in San Diego and Sacramento but we should not be in a position of constantly fighting development at the expense of port and trade related jobs.creation and the efficient movement of our exports and imports. .

Buy America Good .

2722. Lipinski said. "Because of these Chinese-made parts and Bombardier's quality-control failures.'" In addition." As part of his effort to require the federal government to Buy American whenever possible. the amendment failed in the Republican-dominated Transportation and Infrastructure Committee. The congressman also coauthored an amendment to the House Republican transportation bill to achieve the same goal. which I helped introduce last year. Rep. This is just another example of why it is so important that we do so. The first 54 of the train cars were delivered and most were briefly placed in service last year before CTA inspectors detected the flawed parts. Lipinski said. 3533 to the House transportation reauthorization bill last month." Rep. would require that trains and related equipment bought with federal money be entirely 'Made in U. Rep. Rep. it's even worse. Congressman Dan Lipinski today urged Congress to pass legislation requiring trains purchased with federal money to be 100 percent made in America. Currently. Lipinski helped push for an amendment that would have added language similar to H. Lipinski Urges Passage of Bills to Close Loopholes in Buy America Laws. Lipinski has introduced the Buy American Improvement Act." Rep. . Unfortunately.R. I've been working to close loopholes in Buy America laws to make sure that our tax dollars purchase American-made products that support American jobs.were seriously defective.with which the CTA has a $1.Project Efficiency Buy American key to project efficiency – defective foreign parts delay construction US House of Representatives. H. The Chicago Tribune reported this week that critical steel parts supplied by a foundry in China to Bombardier Transportation of Canada .R.R. Most of the funding was supplied by the Federal Transit Administration. 3533. Buy America laws only require that 60 percent of the cost of train components purchased with federal money be made in America. Bombardier is currently replacing the parts at the CTA's insistence.S. For years. H. "It's bad enough when taxpayer dollars are used to purchase foreignmade products and take away jobs from American workers. and could have wreaked havoc had they failed. to close numerous loopholes in Buy America laws and stop the practice of spending taxpayer dollars on foreign-made products. "Strengthening Buy America laws is critical to preventing something like this from happening again and to keeping our tax dollars here in the United States. before any breakdowns could occur CTA inspectors discovered the flaws and removed the cars from service. lexis) Citing a report that new train cars purchased by the CTA had to be recalled because faulty parts made in China could have caused serious safety problems. Daniel Lipinski (D-IL) News Release‖ Congressional Documents and Publications. CTA riders continue to put up with worn-out old train cars that require frequent and expensive maintenance and should have been retired long ago. Fortunately. 3-12-‘12 (―Citing Defective Chinese-Made Parts Supplied to CTA.14 billion contract for 706 rail cars .A. " When those products are also faulty. The Invest in American Jobs Act.

. cable strands. I guess we could have had a cheaper Golden Gate Bridge in 1937 if we had just brought over a led and organized. Fellow at the Commonweal Institute and Board of Directors member for Media Transparency. A new campaign launching Monday is going to use billboards to make this point to local officials who might outsource these projects. which meant: loss of state and federal tax revenue from taxes on the wages and taxes of the workers and taxes on the companies that employed them. contributing to pollution. will be done by Americans. Huge deck segments were shipped overseas from Shanghai.5 million man-hours). But construction of the bridge decks and the materials that went into them are a Made in China affair." Paul said. In that trying time. It actually costs taxpayers more to "save money" by outsourcing then it saves because of the "safety net" costs from lost jobs and factories. The Larger Costs the new facilities for them. and the pouring of the concrete road surface. I mean.Economy Failure to Buy American for transportation infrastructure has a rippling effect throughout the economy Johnson. the bridge. and landmark tower for the single anchor suspension bridge set to open in 2013." The SF Bay Bridge Under Governor Arnold Schwarzenegger California turned to The argument for purchasing Chinese steel was that it would "save money. [.. "Any of our leaders willing to outsource jobs to China could find one of our billboards next to their shiny new project. and we need to do it with steel and supplies that are made in America. etc. Chandra Brown. .S. The Chinese company that was selected to to California's battered economy and 12 % unemployment rate. This campaign will also use online activism to urge the use of American-made components for infrastructure projects financed with U. Our taxpayer dollars built is also the cost in our own morale and confidence in our abilities. California officials say the state saved hundreds of millions of dollars by turning to China. and a strengthening of Buy America rules in federal procurement . New Campaign To Fight For Buy American When Using Tax Dollars Yesterday the Alliance for American Manufacturing (AAM) and the National Steel Bridge Alliance (NSBA) held a press conference to announce a campaign to hold elected officials and procurement decision-makers accountable when they buy supplies and steel for taxpayer-funded infrastructure from outside the country. there is a competitive cost when taxpayer dollars are used to purchase major components of infrastructure projects. the "ripple effect" economic costs of all these lost jobs -. lexis) We need to rebuild our country. the state of California got around these requirements by refusing federal funding and financing the project with state funds. They are also calling for "Buy American" rules in state procurement policies. Clyde Prestowitz asks.lost sales at stores. The new national "Should Be Made In America" campaign will begin placing billboards wherever politicians are willing to outsource projects to China and other countries. and now they can bid against American companies for more projects! There provide the steel for the Bay Bridge did not yet have the manufacturing ability to make the components. restaurants. The assembly work in California. I attended the launch event. and delivering another blow In addition to "safety net" cost and loss of tax revenue. loss of worker training and in-country manufacturing infrastructure. was a symbol of hope because it demonstrated that Americans could still do great things when properly I can count way over $400 million in unemployment costs pretty quickly and that's without even considering the downward pressure on all wages in the United States that arises from the import of these low wage products in the midst of high unemployment. then the world's longest suspension bridge. cost of resulting foreclosures. VP of Oregon Iron Works said at the press conference. Although the federal government has "Buy America" preferences requiring American-made materials in procurement. From the NY Times last June: China for the steel in the new Bay Bridge between San Francisco and Oakland. 3-29-‘12 (Dave. tax dollars. gas stations.from cheap toys to Apple iPads to commercial jetliners . How much will San Francisco's Chinese bridge really cost? I am old enough to remember the pride my parents took in telling me of the completion in the middle of the Great Depression of the Golden Gate Bridge. "We could be celebrating "We Built That!" In the same vein. Bridge Comes to San Francisco With a Made-in-China Label. ―Should Be Made In America!‖ California Progress Report. The project is part of China's continual move up the global economic value chain . food stamps and other "safety net" programs. The "Should Be Made In America" campaign launches with two large billboards stationed near the Bay Bridge that feature the flag of the People's Republic of China inscribed with "The Bay Bridge/100% Foreign Steel." "If you are willing to outsource projects overseas. Several thousand Chinese workers spent five years fabricating the steel used to construct the roadbeds. say critics. But the project is sparking outrage among groups who argue the work should have stayed here. This outsourcing cost of thousands of American manufacturing jobs (3. we're willing to put up a billboard in your neighborhood telling taxpayers you did just that. almost entirely made in America.as it aims to become the world's civil engineer. the costs to taxpayers are much more than the savings. outgoing cost of unemployment benefits." but when the costs to other state and federal government agencies as well as to the larger economy are added up.] . Fox: San Francisco-Oakland Bay Bridge Controversially Made in China.

But that would have defeated States funding not subject to Buy American requirements Johnson. lexis) Although the federal government has "Buy America" preferences requiring American-made materials in procurement.S. 3-29-‘12 (Dave. the state of California got around these requirements by refusing federal funding and financing the project with state funds. ―Should Be Made In America!‖ California Progress Report. bunch of Chinese workers to do the job. .the purpose of building the bridge which was a major project in the effort to cut U. Fellow at the Commonweal Institute and Board of Directors member for Media Transparency. unemployment in the midst of the Depression.

Strong domestic content standards and improvements to Buy America laws will ensure that investments in our nation‘s transportation infrastructure will sustain domestic manufacturing and the millions of jobs the sector supports. Administrative actions can only go so far. it makes sense that we use American-made steel. For instance. As part of this effort. iron and manufactured goods. United Streetcar in Clackamas. In addition. Existing Buy America requirements are specific to each agency. Transportation and . and Congress must act to strengthen existing laws. In the House of Representatives.org/index. weaknesses in our Buy America laws too often prevent federal investment from reaching its full potential. port and maritime systems will help put millions to work while improving a national infrastructure system that the World Economic Forum recently ranked an embarrassing 16th best in the world. DOT has recently offered improvements to current law that would increase the transparency of the waiver process and increase the waiver standards for rail cars and transit vehicles. but it will also ensure that we have a robust manufacturing sector able to supply the products needed by private and public transportation sectors. TTD has consistently advocated for the inclusion of strong Buy America policies in federal transportation and infrastructure investments.Manufacturing Strengthening Buy America provisions on infrastructure investment key to jobs and the domestic economy – ensures project efficiency** TTD. it is sound economic policy to make substantial investments in our nation‘s infrastructure. however. This is just one example of how Buy America laws can help grow U.S. Buy America policies have a proven track record of creating jobs and growing our nation‘s manufacturing base. highway. Particularly at a time when our economy continues to struggle and unemployment remains high. aviation. They not only create jobs for union employees in Oregon.asp?Type=B_PR&SEC=%7B628A0512-CBEA-4830-9070A5DFCBE65B80%7D&DE=%7B9286A899-4BDF-4774-BD79-2290FF5DAA70%7D) As policy makers explore making significant investments in our nation‘s transportation and infrastructure.ttd. To maximize the impact of these investments. it is critical that federal expenditures are leveraged to achieve the greatest possible economic impact and job growth. DOT has created a Buy America website that shows waiver applications and helps American businesses identify opportunities to fill government procurement needs. Despite success stories like United Streetcar. From high speed rail to economic stimulus legislation. manufacturing jobs along the entire supply chain and maximize the economic impact of federal investment. Oregon. bridge. not just the portions being built with federal funds. creating a myriad of policies that are inconsistently applied to various modes of transportation. rail. in 2009. AZ. rolled out the first U. 3-11-‘12 (Transportation Trades Department AFL-CIO. Current law also does not prevent grant recipients from segmenting projects that receive federal funds in order to bypass Buy America requirements. OR. Repairing our deteriorating transit. they also help support over 200 vendors of streetcar parts in 20 states. This will not only increase the number of jobs created by federal investments. ―Transportation Buy America Laws Must Be Strengthened‖ http://www. These projects were funded in part by the federal government and comply with the Federal Transit Administration‘s Buy America laws. These policies too often include broadly applied waiver provisions which lack accountability and decrease the effectiveness of Buy America requirements. TTD‘s Executive Committee has developed a long record of policy embracing the principle that a strong transportation system and a strong manufacturing sector are intrinsically linked. The Obama Administration‘s Department of Transportation (DOT) should be applauded for its aggressive enforcement of existing Buy America standards and for consistently rejecting meritless waivers and other attempts to evade these rules.-made modern streetcar in nearly 60 years as part of a system expansion in Portland. The company is also producing six additional streetcars for the City of Portland and seven streetcars for the City of Tucson. The proposal also includes language that would prevent segmentation by applying Buy America requirements to the entire scope of a project.S.

R. and provide the American public an opportunity to comment prior to taking effect. It is critical that a strong Buy America statute be at the heart of any federal transportation investment and that DOT continue its insistence that expenditures on transportation projects will be used to purchase U. The Invest in American Jobs Act (H. this bill removes the ambiguity of agency-specific requirements and creates a clear and consistent Buy America law for federal investment in transportation. Federal Emergency Management Agency grants and Economic Development Administration grants.S. 3533 also expands Buy America requirements to other federal investment programs. harmonizes and appropriately expands existing Buy America provisions to ensure that American dollars are supporting American jobs. including rail infrastructure grants. create American jobs and help rebuild our domestic manufacturing sector. This bill strengthens the waiver provisions to ensure that they are awarded only when truly warranted and with full transparency. As Congress continues to debate a multi-year surface transportation bill and considers future investments to improve our transportation network. . It requires Federal agencies to post any proposed waiver online. By applying Buy America to all transportation agencies and expanding the reach of these laws to other federal investment programs. job growth.made goods and equipment. 3533) strengthens. Agencies will also be required to publish annual reports which include justifications for waivers issued. Clean Water State Revolving Fund grants.R. the American people need a commitment that taxpayer dollars will be used to create the greatest possible economic impact and support U.S. loans and loan guarantees. Annual reports will make the Buy America waiver process more accountable and help identify areas where we can strengthen our domestic manufacturing sector. and an employment impact analysis of the cumulative effect of waivers issued in the previous year. provide a detailed justification for the waiver. comparisons of the amount of funds used on both domestic and foreign manufactured goods.Infrastructure Committee Ranking Member Nick Rahall (D-WV) has introduced the strongest and most comprehensive Buy America legislation to date. H.

Jobs are a nice side benefit. they argued. the Bay Area Rapid Transit agency voted to award a $2. Public officials charged . Metropolitan Transportation Authority voted to award an $890-million contract for 235 light rail cars to Kinkisharyo International. temporary job be counted Measure R would create more than 500. California lost the opportunity to create more than 2. employment plan" that emphasized the creation of permanent living-wage jobs and training opportunities for unskilled people. Last year. and final assembly must occur in the U. They included language in the request for proposals that required all bidders on the rail car contract to create a "U. County Economic Development Corp.100 direct fulltime equivalent U. County voters adopted Measure R — the primary source of funding for the purchase of these rail cars — precisely because public officials promised that the tax revenue would be invested in desperately needed job creation and traffic reduction.000 good American jobs building rail cars for our transit systems. according to our analysis.S. creating good middleclass jobs for local workers should not be given second billing. Alliance for a New Economy. a Japanese firm that will build a significant portion of the cars in Osaka. But the MTA staff didn't follow its own criteria.0. jobs to be created can be legally considered by public officials in a manner equal to the consideration of things like cost and performance. poor neighborhood? These are questions that the MTA failed to address in its procurement decision. In the recent L. I disagree.latimes. Yet research shows that the same as a full-time job with extensive training opportunities? Is the creation of a temporary facility as valuable as the construction of a permanent manufacturing facility in a building permanent. Now we need to create a process in which the quality and number of U. but they are secondary in the contracting process.com/news/opinion/commentary/la-oe-janisjobs-rail-los-angeles-20120529. employment plan language.S. community and business leaders who supported the losing bidders. ―L." but it failed to answer the fundamental question of why Kinkisharyo wasn't required to fully comply with the sensible requirements of the U. including 33.S.A. In fact. jobs in favor of Kinkisharyo's plan. That argument was made clearly and repeatedly by a broad-based coalition of labor. that would have created 1. With the awarding of these two contracts.A. commissioned by the MTA to support the tax. and I think that in both of these cases.Jobs Condition the plan on contracts being given to American firms – key to domestic jobs Janis.S. than their competitors. The federal Buy America law. This means that at least 60% of the rail car components must be made in America. I'd go further: It's critically important that we build consensus among public officials across the country in the years ahead that job creation should be considered one of the primary criteria in the purchase of equipment for public use. The transit agencies said that when giving out a contract for rail cars. But not everyone agreed that creating jobs should be a top priority in awarding a contract. the most important thing is building the best possible rail cars at the best possible price. Measure R itself stated that one of the purposes of the half-cent sales tax increase was to "stimulate the local economy [and] create jobs. the transit agencies made a mistake. 5-29-‘12 (Madeline. On April 30.A.S. In 2008.000 manufacturing positions. And they promised to conduct a "trade-off analysis" in which the value of the jobs plan could be deducted from the proposed cost of the rail cars. rather than in California.A.. environmentally sound manufacturing facilities in poor neighborhoods can breathe life into those communities and into the larger regional economy. taxpayers will be spending billions of dollars over the next decade building and retooling their 21st century transportation system.S. It rejected a proposal from Siemens Industry Inc.S. Kinkisharyo made vague promises to work with local nonprofit groups and to build a temporary facility somewhere in the U. The MTA staff claimed to have chosen Kinkisharyo because of a 5% lower cost and "better expected performance. While Siemens proposed to spend $5 million on workforce training and to build a rail car factory in East Los Angeles. http://www. rail car procurement process. National Policy Director L. Should a part-time. projected that Even once everyone agrees on the importance of job creation in the procurement process. We are already part of the way there. L.5915293. requires that all transit-related goods and equipment purchased with federal dollars need to be substantially made in America. which will create 438 direct FTE jobs. That's an important start.5-billion contract for the manufacture of 775 rail cars to a Canadian firm that will build many of the car components in Mexico. on May 9.'s lost opportunity for job creation‖ LA Times." A 2008 study by the L.A. Japan. MTA officials started out on the right path.story#tugs_story_display) the L. Just a week later.A. in effect since 1983. In Los Angeles. the California Legislature went further and allowed local transit agencies to give extra points to bidders that commit to building more of their rail cars in the U.000 jobs. transit agencies will still need to establish clear procedures on how to value jobs and job creation.

8 billion in bus purchases. ‟12 (Leigh Ann. Policy and society Program Northeastern university.S. an organization made up of Cities have a lot of purchasing power. ―Reviving the U. He's among the public officials who have helped launch Mayors for America. Michigan. The city of Lansing is allowed to spend up to 5 percent more on local purchases than the amount of the lowest bid they receive from outside the area. ―We want everyone to participate. We know what happens when jobs are outsourced. Senior researcher at the Worldwatch Institute. And an ―International Competitiveness‖ scenario would invest $24. respectively. A ―Business-as-Usual‖ scenario would invest $2. believes they should. and the ―International Competitiveness‖ scenario would yield 252.com/news/state/gov-should-cities-buylocal. it's a point that has become all the more salient in the wake of the recession.pdf.S. Mayors for . Director.governing. Buy American First" purchasing protocol. regardless of whether they are local.manufacturing Renzulli. We‘re in the trenches. we‘re on the front lines. manufacturing is to experience a serious revival that produces morethan fragmented showcase projects and scattered jobs. according to the latest mayors and other municipal leaders encouraging cities to adopt ―Buy Local. Law. it would help the battered manufacturing sector and cities that rely on it. this week. The unemployment rate there peaked at 16.563 jobs in U.‖ Bernero said. ―It‘s not like we‘re saying if your state dictates your policies you can‘t sign the pledge.8 billion. Cities across the country have different procurement policies. also had buy American provisions attached.‖ His organization's goal is to get other cities to sign on and provide a list of products and services from local businesses that other members of the group can utilize. rail car and bus manufacturing and their supplier industries.S.2 billion and $4. "I believe that what made this country great was the great GDP.Jobs Fitzgerald et al. Lisa Granquist. Ishwar Khatiwada Senior Research Analyst in Labor Market Studies at Northeastern University. His organization's slogan: "Mayors helping Other Mayors Promote Domestic Buying. Pledge to work within your state‘s policy as much as you can. Professor of Economics and Director of the Center for Labor Market Studies at Northeastern University.C. The number of jobs would increase significantly if more than the required 60 percent of inputs (as specified by the Buy America provision) were produced domestically. federal figures. http://www. Michael Renner. http://www. suffered a surge in unemployment in the wake of the recession. toward these purchases. ―Should Cities Buy Local‖) Should municipalities spend more money on products that are made in America? Virg Bernero. but also to other clean-technology industries that will be growing dramatically over the coming decades. In Lansing‘s case. all the time.org/system/files/Reviving-the-US-Rail-and-Transit-Industry. a manufacturing center.7 billion in rail vehicles and $2.8 billion. D. For nearly 80 years the federal government has had a policy that requires the feds to have a preference for U. Still. Joe McLaughlin Senior Associate at KPMG a global network of professional firms providing advisory services.4 million jobs over the last decade.‖ Bernero said. ‟10 (Joan. his group reasons.made products in situations when it's possible (though there is room for exceptions). Though that number has improved. and if they make more of an effort to buy American-made products.S. An ―Increased DomesticInvestment‖ scenario would invest $7.343 jobs. and the stimulus.html. the city's unemployment rate today is still 50 percent higher than it was a decade ago. ―This is about what mayors can do when they leverage their tools. Even with Buy America econ increases -." said Bernero at an event in Washington. Buy American creates local jobs -. Such analysis does not apply just to transit vehicles. June 14. and then maybe consider trying to change that legislation. These jobs would stimulate thousands more jobs in other sectors of the economy. September. the mayor of Lansing." Lansing. "I believe that we put the P in GDP (when) we made things here in America. Bernero admitted that not all cities were going to be able to commit to buying all local. according to figures from the Bureau of Labor Statistics. and Midwestern mayors in cities that relied on manufacturing aren't above asking for a little help from their friends in other communities." It's not a novel idea -politicians and industry leaders have been urging the country to "buy American" for decades .4 billion and $12. which sent billions in aid to states and localities.with expending precious tax dollars on equipment need to select companies that manufacture their products in the United States. If U. Andrew Sum.9 percent in the summer of 2009.The ―Increased DomesticInvestment‖ scenario would support 79. respectively—a level that is comparable to China‘s investment in rail and bus vehicles.213 jobs. The ―Business-as-Usual‖ scenario yields 34. Rail and Transit Industry: Investments and Job Creation‖) This report uses three scenarios to estimate the job creation potential from increased federal investment in rail and transit.worldwatch. thefederal government needs to take much bolder policy action that creates demand and supports research and development in key industries. some of which are dictated by state law that require contracts to the lowest bidder. The manufacturing sector lost about 3. businesses are only considered ―local‖ if they are actually in the city limits.

http://www. it has sparked international friction among consumer groups and environmental activists who worry that terms demanded by the Obama administration will eliminate important public protections. has received relatively little media attention in the United States. Current deal attempts to ban Buy America. If approved in its current form. Senior Political Economy Reporter at Huffington Post. citing what they believe is an inadequate response from the federal government. the county.com/2012/05/03/obama-trade-congress-buy-american_n_1475277.S. Domestically. jobs. the deal's primary source of political tension is from a portion that could ban "Buy American" provisions -. the pact would effectively ban "Buy American" policies in government contracting. Although the deal. and the country as Advocates for the policy say municipalities should come together to revitalize manufacturing. .huffingtonpost.html) A group of 68 House Democrats and one Republican sent a letter to President Barack Obama on Thursday urging him to reconsider an element of the controversial free trade agreement currently being negotiated by the administration. 12 (Zach.America‘s ultimate goal is for cities to have tiered systems where ―local‖ can include the city. the state. ―Congress Revolts On Obama Plan That Would Ban 'Buy American'‖ Huffington Post.a restriction that opponents emphasize would crimp U.Kills US jobs Carter. May 3. a whole. however. known as the Trans-Pacific Partnership.

it will be the hard work and ingenuity of our workers which will get it done . steel production. the 'segmentation' loophole is a tactic utilized to avoid the 'Buy America' preference. Taiwan." Thomas J. Cravaack's defense of 'Buy America' here. President and CEO of the American Iron and Steel Institute (AISI) said. Specifically.2 percent. "The Congressman's 'Buy America' amendment will create private sector jobs for Minnesota workers. Before the International Trade Commission. 7-6-‘12 (―Cravaack: ‗Buy America‘ to put economy back on track‖ Congressional Documents and Publications.S. and ensure that more American steel is used in federal transportation construction projects. Congressman Cravaack's amendment ensures future roads and bridges will be made with top-quality American steel and by skilled American workers. and more debt. which was most notoriously used on the San Francisco-Oakland Bay Bridge to effectively export thousands of high-value jobs overseas.S. Rep. taxpayer financed projects. and Ukraine (Inv. Romania. Netherlands. the importing of cheap and inferior Chinese and Brazilian steel for federal transportation construction projects hurts working families." said Kraig Grivette. and not overseas. the Cravaack 'Buy America' steel amendment attached to the recent highway reauthorization bill will create U. In fact. to the detriment of U. "Congressman Cravaack's 'Buy America' amendment will greatly benefit the Iron Range. the amendment closes the 'segmentation' loophole by ensuring that highway and bridge projects receiving federal aid cannot be 'segmented' to evade 'Buy America' preferences. but all domestic products when available . Gibson. "Today we witness historic debt and a historic real unemployment rate of 14. which measures the percentage of able Americans working or looking for work. the labor force participation rate. At a time when other countries give massive subsidies to their steel makers. Closing loopholes to import cheap foreign steel and requiring that highways and bridges are built with American steel will increase jobs here in Minnesota. Kazakhstan. American-paid tax dollars are being used for these projects. which directly supports steel jobs. Cravaack was forced to defend 'Buy America' from attempts to gut two-thirds of existing 'Buy America' requirements and kill the jobs of the 3900 people directly employed by iron ore operations on Minnesota's Iron Range. Thailand. Steel key to hegemony Buyer. "This amendment will end the practice of 'segmentation' of U.R." he added. which indicates the unemployment rate for June was unchanged at 8.Steel Buy American key to steel industry – provides critical jobs and investment US House of Representatives. "The American steel industry thanks Congressman Cravaack for his leadership on the 'Buy America' amendment to H. secure U. South Africa.S. After 41 straight months of unemployment above 8 percent. Importantly." said U. 7-31-7 (Steve. I believe government projects for highway and bridge construction should use not only domestic steel. another dismal jobs report reinforces what we already know: economic growth has stalled and millions are jobless. China. Maintenance Reliability Technician at United Taconite (Cliffs Natural Resources) and Member of USW Local 6860. the U. Member of the House of Representatives.S.not more spending. 701-TA-404-408 and 731-TA-898-908)) . Currently. After all. workers and iron ore producers. we should at the very least give our steel producers the first opportunity to supply steel for our bridge and highway projects.S. Nos." said Steve Biondich. Representative Chip Cravaack (MN). Regarding the five-year sunset review on Certain Hot-Rolled Carbon Steel Flat Products from Argentina. Indonesia. India. remained near a 30-year low in June." he added. Previously. "If the economy is going to turn around. 4348. Unfortunately. Department of Labor'sBureau of Labor Statistics released its latest jobs report. lexis) Today. Millwright at Arcelormittal Minorca Mine and Treasurer of USW Local 6115. Watch Rep.S. more taxes.9 percent. We have bridges and roads in desperate need of repair in Minnesota. jobs.

investment in research and development. steel would be high on that list. are all made of steel. Both of those elements are vital ingredients to a nation's ability to develop and maintain an adequate defense. We cannot become dependent on foreign sources for this material so vital to our national defense. ―2012 Public Policy Agenda‖ http://www. The efficient low-cost producers that comprise the membership of our domestic steel market can compete effectively against any foreign producer in the global economy. the competitive nature of this market is unfairly influenced by steel dumping or by illegal subsidies given to foreign producers by their governments or other entities. I think it is apparent that we cannot accept a situation in which we are reliant on the kindness of strangers to meet our security-related steel needs. Companies like Nucor of Crawfordsville and Steel Dynamics of Pittsboro contribute substantially to the ensuring a healthy local economy and thereby contribute to a stable and healthy national economy. HUMMVEES. tanks. Our aircraft carriers.S. However.A robust steel industry is fundamental to the security and economic viability of this nation. trade laws that lend to a skewed market and undercut the ability for fair competition to flourish in the global economy. Since 2000. These producers are heavily concentrated in northwest Indiana and at the end of 2006 they employed over 19. to recognize those instances in which anti-dumping and countervailing duties are no longer required to safeguard our economic and security interests. The United States is the only superpower in the world. In those instances. That competitive edge lends itself to economic security and stability here at home. Steel key to economy. 5.S.steel. faA group of 68 House Democrats and one Republican sent a letter to President Barack Obama on Thursday urging him to reconsider an element of the controversial free trade agreement currently being negotiated by the administration. To ensure that our nation's defense remains adequate and capable. Please take this under consideration while contemplating your decision in this matter . the domestic market loses its ability to effectively compete with its global rivals. we must be cognizant.S. The economic stability of the steel industry here at home. In either instance. it has sparked international friction among consumer groups and environmental activists who worry that terms demanded by the Obama administration will eliminate important public protections. the steel industry has invested billions of dollars in modernizing if itself while simultaneously improving environmental compliance. I believe we must remain vigilant to protect ourselves from a future without a steelmaking infrastructure sufficient to meet our national defense needs. A fruitful domestic steel industry maintains its viability by being adaptive. To ensure their stature. critical materials for our national defense. cruisers.org/en/~/media/Files/AISI/Public%20Policy/Agenda/AISI2012PublicPolicyAgenda%2 0_%20Final%20020212. manufacturing jobs have been lost .000 Americans in that region. has received relatively little media attention in the United States. jobs. It is in our national interest to maintain a vigorous steel industry. If you were to contemplate the ten resources considered essential to the successful establishment of a nation. We need to ensure that companies like Nucor and Steel Dynamics have the opportunity to modernize and grow to adequately meet the demands of the global market without the fear of sustaining financial damage from unfair or illegal trade practices. including burdensome tax rates. since they have requirements of their own for steel. If approved in its current form.6 million U. The nation's annual production of over 100 million tons of steel. Simply put. the deal's primary source of political tension is from a portion that could ban "Buy American" provisions -. Depending on trusted friends and allies may not be wise. directly impacts our national security. national defense has dominated public attention. and take appropriate action. Although the deal. technologically savvy. inadequate investment in infrastructure. however.a vital instrument of our national security lies in your hands.cing significant challenges to its international competitiveness due to a host of factors.a restriction that opponents emphasize would crimp U. When that occurs. and high value exports. we cannot allow to go unchallenged the continuous violations of international and U. 2001. Simultaneously. 2012 (Feb 2. Yet manufacturing in North America is in crisis. of which Indiana is the second-largest producer among the states. and our ability to remain competitive abroad. the integrity of the domestic and global market is jeopardized. known as the Trans-Pacific Partnership. including good-paying jobs. In the years that have followed the tragic events of September 11. without the ability to move people and equipment quickly. keeps this country at the top of the worldwide steel industry. the pact would effectively ban "Buy American" policies in government contracting. A strong manufacturing sector creates significant benefits for society. When contemplating the tumultuous nature of this global war against terror in which we are immersed. Domestically. It has learned the hard way the benefit of cutting-edge technology.ashx) Steel and other manufacturing industries are the backbone of our economy. and flexible so that it can maintain its competitive edge in the world market. the defense of our nation depends on steel. The preservation of the economic integrity of our domestic steel industry is fundamental to our ability to protect our very existence as a nation .without it several impacts occur American Iron and Steel Institute. it negatively impacts the economic stability of our domestic steel industry which in turn threatens our national security. We cannot project our force around the globe. we must continue to enable mechanisms that will influence other countries to play by the rules. increasing regulatory burdens and foreign unfair trade practices . which from time to time is necessary. energy costs.

the U. Russia and Ukraine together accounted for around 74% of total global consumption of coking coal in 2006. Steel is critical to renewable energy production WCI 7 (World Coal Institute. As a major raw material fed into the blast furnace. manufacturers are able to compete in today‘s global economy. coking coals must be of high quality to support the charge of a blast furnace with as little degradation as possible. Japan. the demand for products and services has fuelled an almost insatiable demand for steel. reaching 1. Although most of this was from China. China continues to drive production developments in the global steel sector – producing some 423Mt of crude steel in 2006 – while other Asian economies exhibit much more modest growth (see China case study on page 12). Steel is a vital building block for development – facilitating economic growth and poverty alleviation. Steel Demand & Trade Global steel demand increased by 9% in 2006. http://www. Some coke is exported from OECD countries – mainly Australia. supported by the consumer boom which is spreading to cars and houses. The remainder is produced using electricity – often generated using affordable and reliable coal. military and our civilian national security agencies would lose their principal source of strategic materials and our nation would become dangerously dependent upon foreign sources of supply. new capacity of 54Mt per year is expected by the end of 2008. the importance of steel to our daily lives. A similar exponential growth in steel demand is expected in India . housing. with some 34Mt per year planned in Brazil alone. and modern communication systems all depend on steel. Major developed and developing economies are able to utilise large indigenous coal reserves. Transport links must be expanded to meet the geographical growth of urban and peri-urban areas. with world trade at 222Mt in 2006 – representing 27% of global hard coal trade. In 2006 global steel trade was up 13% to 283Mt (excluding EU internal trade). accounting for around 55% of world exports in 2006. Steel is a man-made alloy of iron and carbon – carbon is found in coal. India. Coking coals must also be low in sulphur. In 2006. also referred to as coking coal. Japan. other countries and regions have been experiencing a resurgence in demand for steel. transport systems – cars. phosphorus and alkalis . accounting for 34% of global steel production in 2006. housing. In addition. the North American steel industry strongly supports the implementation of a national pro-manufacturing agenda to ensure U. water and electricity are urgently required and transport and communication links have to expand. Coking coal has particular physical properties that on heating to over 1000°C (in the absence of air) causes the coal to soften. as demand for infrastructure. millions of additional jobs would be lost and our economic strength as a nation would be further damaged.such as sodium and potassium. This is set to continue as India is projected to eclipse China in population size by 2025 and the two countries will account for around 36% of the global population. China. at 121Mt. Increasing Demand for Steel Over the last 35 years steel production worldwide has almost doubled. The largest coking coal importers are countries with strong steel demand but lacking in domestic coking coal reserves. production. Coking coal exports to Asia-Pacific are estimated to have reached 132Mt in 2006.worldcoal. Carbon capture and storage used directly in the process. trains and ships.2 billion tonnes in 2006. The period 2000-2006 has seen unprecedented growth. The remainder is produced by recycling scrap steel (itself originally produced directly using coal) using electricity – often generated using affordable and reliable steam coal. known as ‗coke‘.1 billion tonnes. better transport systems. liquefy. Australia remains the world‘s largest coking coal exporter. from less than 600 million tonnes (Mt) in 1970 to around 1. improved agricultural practices. The availability and reliability of modern communication systems also becomes ever more important as urban economies become more sophisticated. clean water and access to reliable and affordable energy.the Indian government has already planned some $350bn investments in infrastructure development during its Eleventh Five Year Plan (2007-2012). Much of the demand for steel is being driven by the strong and rapid economic growth of China and India. also referred to as coking coal. The United States cannot continue to lose its manufacturing base due to market distorting foreign competition or government policies that discourage domestic investment in productive capacity. Steel is a man-made alloy of iron and carbon – and that carbon usually comes from coal. better transport networks. energy. describes manufacturing processes and considers options to reduce environmental impacts. including China. around 40% of total global crude steel consumption. Coal is a direct input in the production of steel – almost 70% of the steel produced today uses coal. sanitation and healthcare.pdf) steel production is reliant on coal.9 billion people are expected to be urban-dwellers by 2030 . goods and services that growing economies demand. telecommunications. while China became the world‘s largest exporter of steel products. ―Coal Global & Steel‖ August. providing high thermal efficiency and metal reduction. Steel is critical in the energy sector – it is used for fuel exploration. A concerted pro-manufacturing policy agenda is needed to reverse this troubling trend. Key Messages Metallurgical coal. although some is also used in the power sector. Consolidation in the Iron & Steel Sector Consolidation in the iron and steel sector is a .org/assets_cm/files/PDF/coal_steel_final. Should this happen.3 billion in China. growth and rapid urbanisation is driving demand for steel electric arc furnaces. In China. China and India together consumed over 445Mt of steel in 2006. To meet these critical goals. This will place huge pressure on existing Coal will continue to play a major part in the manufacture of the world‘s steel for the foreseeable future.because of the lack of aggressive policies to promote manufacturing here in America. Almost 70% of the steel produced today relies directly on metallurgical coal. Several innovative solutions are being developed to further reduce.S. Russia has seen strong growth in steel demand. Significant increases in steel production are usually the result of strong economic growth. The well-supplied world market means that metallurgical coal can be delivered worldwide. Rapid urbanisation worldwide is driving demand still further – as cities grow. water and electricity are urgently required. communications networks. Steel is essential to modern societies: food production and preparation. with global figures rising over 47%. healthcare. Having shown a remarkable four-fold increase between 1996 and 2006. – Strong population – as cities develop. Steel is a fundamental material for modern life. such as Japan. Major efficiency gains have been achieved in the integrated iron and steel sector. strong economic growth has fuelled recent increases in steel production and consumption. Steel Production Steel is produced and used worldwide. Around 4. while coal is also available from a wide variety of sources in a well-supplied worldwide market. Around 70% of coke is imported by major steel producers in the OECD. electricity generation and various forms of supply infrastructure. South Korea and India. In Coal & Steel. purification and delivery. Coking Coal Trade There is a sizeable market in coking coal. The report looks at the demand and supply of coal and steel. The impact public policies have on manufacturers must be carefully considered to ensure both economic growth and our national security . is a vital ingredient in the steel making process. as well as at the power stations generating electricity for Steel is a vital building block for development it facilitates economic growth and poverty alleviation and is a major element in improving quality of life. Czech Republic. water collection. Previous sharp declines in North America were reversed in 2006.60% of the world‘s population. including carbon capture and storage. Almost all coking coal produced globally is transformed into coke in a coke oven and used in blast furnaces for the production of pig iron for the steel alloy. facilitating the manufacture of steels which will ultimately deliver the infrastructure and create significant demand for housing. Russia and the Ukraine. China continues to dominate steel production and demand. Steel making capacity is expected to increase over coming years. and almost 1. could reduce sector emissions to the atmosphere to near zero. In Europe. Coking Coal Demand & Supply World demand for coking coal increased from 635Mt in 2005 to 706Mt in 2006. products and services. The largest producers of coking coal are China and Australia. Poland and the USA.S. and transportation systems increases. with the USA producing around 100Mt of steel to help meet its domestic demand. The manufacture of steels ultimately delivers the goods and services that growing economies demand – healthcare. Countries with significant coking coal reserves may choose to transform the coal domestically and export the coke product. then resolidify into hard but porous lumps. Coal is an essential input in the production of steel. With a population of over 1 billion in India. economic growth rates in those countries were 11% and 9% respectively. manage and control emissions from the process. About 65% of world coke exports originate in nonOECD countries. the World Coal Institute provides an overview of coal‘s role in the iron and steel sector. affordable and geographically well-distributed. Coal is abundant. The Middle East and Latin America are also expected to significantly increase capacity. as well as the replacement of ageing infrastructure.

Medium and high carbon steels (0. and renewable energy systems are all dependent on steel. Adding other elements to the hot metal provides a wide range of alloy steels.35% carbon) is commonly used for drinks or food cans but can also be converted into a wide range of alloys. enabling a variety of uses. versatile. Transmission and distribution systems also rely on steel. which is composed simply of iron and carbon. and can achieve operating efficiencies of greater than 45%. ArcelorMittal. USC plant require specialist steels in order to withstand these conditions. There are currently 1. completed for the East China (Jiangsu) Power Transmission Project and funded by the World Bank. bridges. to resist corrosion. Stainless steels All of these types of steel are produced using coal. electricity generation Mines. often combined with nickel. Some 21 million new housing units are needed each year to meet present growth in developing countries. These new plants are being built worldwide but continuing materials research is being undertaken to improve the steels available. steel is therefore vital to economic development and alleviating poverty. offshore platforms. The largest steel company. hydroelectric dams and power plants. Wind turbines. Steel is critical in the energy sector – it is used for fuel exploration. While energy systems themselves are not sufficient to eradicate extreme poverty. Ultra-supercritical (USC) coalfired power plant operate at higher temperatures and pressures than conventional pulverised coal plant.recent trend. Society‘s need for housing is great and increasing. durability. . Other advanced technologies such as Integrated Gasification Combined Cycle (IGCC) depend on the use of improved steel materials to achieve larger commercial capacities. Buildings & Construction Steel is a universal building material contain a minimum of 10% chromium. The world‘s tallest suspension tower. production. they are necessary to create the conditions for economic growth and improved social equality. Low-carbon steel (up to 0. In 2006 the top five steel producers accounted for 19% of world production. raising quality of life and alleviating poverty – is therefore also reliant on coal. helping in the drive to significantly reduce carbon dioxide (CO2) emissions from the sector. Consolidation has been occurring in most regions (except China) and is likely to continue. such as engineering steels and tool steels. Around 1.35%-over 1%) may also be used for a wide range of applications. The towers. are supported by steel towers which are typically constructed using corrosion resistant steel. such as stainless steel. form part of the 500kV transmission line project from Yan Cheng Power Station in Shanxi Provence in the north of China to Dou Shan Substation in Jiangsu Province in the south of China. Energy Systems and in supply infrastructure. versatility and affordability. high-rise apartments and commercial buildings and offices are built with steel.1 billion people live in inadequate housing conditions in urban areas alone. allows power transmission lines to cross the Yangtze River in China. The superstructures of skyscrapers. Given its role in helping to produce and distribute electricity.5m high and the project was built with 4300t of steel. Even renewable energy systems are dependent on steel (and therefore coal) for their infrastructure needs. for example. matching those of the current conventional thermal power stations. Steel is an ideal material to help meet this growing need – it is long-lasting. including surgical steels. earthquake resistant and 100% recyclable. due to its strength. The most common is carbon steel. now accounts for around 10% of the total market. The development impact these goods and services have on communities – through growing economies. Changing the amount of carbon in the steel affects the hardness of the alloy. thermal and nuclear power plants. with several mergers within the generally fragmented industry. Each tower is 346. New forms of steel will enable power generation to reach higher levels of efficiency. for example.6 billion people without access to electricity. as well as to distribute that energy to users. with moves to maintain basic production near to raw materials but increasingly producing finished steel near to the major consuming markets There are thousands of types of steel – each providing different characteristics due to the specific combination of elements in the alloy.

and it has specifically excluded federal funds for mass transit and highway projects from all agreements to which it is a party. for example. the United States has already negotiated with trading partners to maintain the right to attach domestic sourcing restrictions to funds for many public projects.S. Senior Policy Analyst at BlueGreen Alliance. . ―Buy America: One Element of the Solution to Our Job Crisis‖ States News Service.* The U. lexis) Is Buy America consistent with the United States' obligations under international treaties? Buy America policies are consistent with the US trade agreements. August 19. Parties to these agreements have negotiated over the extent of their obligations. is party to a number of such agreements that contain procurement obligations. The U.. and various bilateral and regional free trade agreements. including state procurement financed with federal funds. which covers 39 countries in addition to the United States). what goods and services are covered. NAFTA. ‟11 (Brian. did not subject any state level procurement actions to NAFTA.A2: Trade Conflict Buy America provisions consistent with international trade obligations Lombardozzi. and monetary thresholds for covered contracts. including the World Trade Organization Agreement on Government Procurement (the GPA. including which government entities are subject to the agreement.S.** Thus.

is considering a new levy on cargo entering the U.Canada relations and was introduced as a political compromise to persuade Congress to pass a jobs bill that helps economies in both countries. Financial Post ―‘Buy America‘ provision won‘t harm ‗strong‘ U.S. But in the last few weeks three unrelated events have gotten a lot of attention. ‟11 (Mark. from British Columbia.S. October 18. according to a written text of the remarks. says the American ambassador to Canada. http://business. have tried to draw the conclusion — sometimes without resort to the facts — that somehow there‘s a funeral in our future. ―The relationship between our two countries is probably the strongest it has been in generations. David Jacobson delivered the message Tuesday in a speech designed to correct some misconceptions on this and two other developing issues: suggestions the U.S.‖ said Mr.S. and the impact on people with dual citizenship of a new U.S. Jacobson.-Canada relations: diplomat‖) OTTAWA — The Obama administration‘s recent ―Buy America‖ provision will not harm U. plan to crack down on people who create tax havens.com/2011/10/18/%E2%80%98buyamerica%E2%80%99-provision-won%E2%80%99t-harm-%E2%80%98strong%E2%80%99-u-s-canadarelations-diplomat/.financialpost. And some among us. on both sides of the border.A2: US-Canada Relations US Canada relations strong now Kennedy. perhaps ever. ―I am here to tell you that the United States is unbelievably lucky to have Canada as our neighbour.‖ .

We saved Algoma as a worker-owned company in the early '90s. has a long history of helping the steel industry. American producers would be able to do the same in Canada This could be win-win for Canadian and American workers. We believe that "Buy American" rules that exempt Canada. http://business. Current debate in U. would be the best-case scenario. Steel trade between our two countries is quite balanced and production is integrated (a steel slab poured in the U. Canada should be making these arguments. in fact. ‟11 (Mark. If the "Buy American" policy works and puts more Ameri-cans back to work and strengthens the American economy. existing trade obligations with Canada on other goods would pre-empt an expanded "Buy American" program. The "Buy American" provisions as currently written apply only to federally financed infrastructure projects that are not covered by existing domestic procurement requirements. may be shipped to Canada for rolling. Financial Post ―‘Buy America‘ provision won‘t harm ‗strong‘ U.-Canada relations: diplomat‖) ―A small part of the bill relates to repairs of infrastructure and rebuilding of schools.S.com/2011/10/18/%E2%80%98buy- america%E2%80%99-provision-won%E2%80%99t-harm-%E2%80%98strong%E2%80%99-u-s-canadarelations-diplomat/. the rules will have to be consistent with current trade obligations. Highways.S. There is no procurement requirement at all for most goods.‖ Mr. steel mills. Conversely.a co-ordinated approach to managing domestic procurement and a stronger manufacturing sector in both the U.S.financialpost. Canadian producers would be able to sell into the American market with less competition from corporations operating in countries with poor labour.S. that may make it easier for some steel companies to shift other work to Canadian operations. have signed the WTO Agreement on Government Procurement.S. The United Steelworkers union.S. even if a disproportionate amount of the additional steel orders go to U.‖ And that is the purpose of Mr. ―'Buy American' policies not all bad news for Canada. Buy America barely touches Canada Kennedy. and Canada.A2: Canada Economy Canadian economy not harmed by Buy American infrastructure – job benefits outweigh Toronto Star. October 18. in Canada and the United States. that will be good for Canadian manufacturers who make products consumed by Americans. He had to introduce a bill that had . But there is a bigger prize that Canadians should keep their eyes on . human rights. and then shipped back to the U. Jacobson said that. it‘s not so easy for him to get things through Congress. Canada and the U. Although NAFTA specifically excludes certain domestic infrastructure projects. In addition. airports and transit projects already have these requirements.S. there is room to argue that these limited procurement rules should not apply to Canadian-made steel. And. The same possibilities exist for American manufacturers with respect to the Canadian economy. the ―single most important‖ thing the U. Obama‘s jobs bill. most of these expenditures on infrastructure and schools would be for things like land and labour which Canada couldn‘t supply anyway. Even so. of course. and we helped rescue Stelco about five years ago. It is true there is talk about expanding the "Buy American" provisions beyond federal infrastructure. should be seen as opportunity for Canada to create jobs at home‖ lexis) Accusations of protectionism and claims that this program will seriously harm Canada are overstated . can do to help the Canadian economy ―is to get our own economy back on track. „9 (February 10. or some new form of integrated "buy North American" rules. and environmental standards. Since there is cross-border ownership in the steel industry.). but if that happens. ―And in case you haven‘t noticed. It was to these parts — and these parts alone — to which Buy America applied. So he had to make a tough call.S. which will impact how the "Buy American" provisions apply to Canadian products.

S.‖ people to contrast the minimal consequences of the Buy American provision on Canadian commerce with the ―vast benefits‖ to the Canadian economy if the bill is passed. Hence the Buy America Provision.‖ Mr. ―With the benefits to the Canadian economy of the bill as a whole I suspect the vast majority of economists in Canada would say they‘d take the bad with the good.―If the bill doesn‘t pass. the U. economy — and the Canadian economy with it — continue to suffer. Jacobson also noted that the provisions in the bill will be interpreted in accordance with international trade obligations. ―No two countries on Earth have a better track record of working out our trade differences than the United States and Canada. such as NAFTA and the World Trade Organization.‖ Mr. Jacobson urged some chance of passing.‖ .

a significant exporter and by far the world‘s largest steel producer – has disrupted world markets by continuing to expand production of steel and steel-containing products. economic downturn.stops reliance on foreign markets American Iron and Steel Institute. Enforcement of our trade remedy laws is not ―protectionism. China – a non-market economy (NME). and preserve and strengthen our manufacturing base. 2009.S.More Needed New policies are needed for effective buy American policy. but some of our trading partners do not. U. Industry Position. China continues to protect and increase its exports by manipulating its currency. and investment restrictions to protect their markets and expand their exports . The United States plays by the rules and adheres to its WTO obligations. Steel and other U. antidumping (AD) and countervailing duty (CVD) laws provide critical discipline against unfair trade. trade remedy laws have been weakened through previous trade agreements and erroneous WTO dispute settlement decisions. even during the recent global governments. but they cannot compete against Strong U.ashx) Background. Similarly. level the playing field. raw material markets and border measures for steel and steel-containing goods.S.S. India and other major offshore steel producers also continue to use subsidies. China‘s steel and steel-intensive industries remain government-owned and controlled and heavily subsidized. tax and trade policies. After nearly tripling in 2010 vs.‖ Key efforts should be to: . The United States needs a new. Situation. U.org/en/~/media/Files/AISI/Public%20Policy/Agenda/AISI2012PublicPolicyAgenda%2 0_%20Final%20020212. 2012 (Feb 2. more effective trade policy to combat these unfair practices. manufacturers are facing significant trade challenges. Strong and strictly enforced laws against unfair trade must be the cornerstone of any pro-manufacturing agenda for the United States. China‘s net exports of finished steel products increased again by almost 30 percent in 2011. ―International Trade‖ http://www.steel.S. manufacturers and their workers can compete with anyone in the world on a level playing field.