The attack by corporations and their media mouthpieces on the Buy American provision in the economic recovery package illustrates just how far removed Big Business is from the needs of U.S. workers—and, ultimately, from what will benefit the nation.
Last night on the PBS “NewsHour with Jim Lehrer,” AFL-CIO international economist Thea Lee honed in on the false arguments pushed by corporate interests who mutter darkly about how Buy American provisions will lead to “trade wars.” The Buy American provision mandates that only U.S.-made goods be used in projects funded by the bill—and requires that these steps are taken in a manner consistent with U.S. international trade obligations. So screams of “protectionism” are a red-herring.
I think we have to make a distinction between protectionism in a sense of raising tariff barriers…and stopping trade and government procurement decisions, where governments choose to spend their own tax dollars in a way which is targeted towards creation of good jobs at home. And it’s actually a rational step for governments to take in a time where we don’t have the coordination of fiscal stimulus.
U.S. taxpayers are going into debt to pay for the nation’s economic recovery—shouldn’t those dollars create jobs for Americans? As Lee notes, the U.S. taxpayer wants to
stimulate the U.S. economy, not the global economy…to create good jobs at home in their own communities. They want their tax dollars spent that way. And other countries may not step up to the plate and do the appropriate level of fiscal stimulus, if they think they can free ride off of what the United States has done.
Take the example of Canada. As the Economic Policy Institute (EPI) points out, the United States and Canada are both parties to the World Trade Organization (WTO) Agreement on Government Procurement (GPA), which was signed by 37 other governments, including the European community, Hong Kong, Japan and Korea, but not mainland China, Brazil or Russia. In addition, the North American Free Trade Agreement (NAFTA) also contains further, bilateral commitments on government procurement requirements.
The GPA and NAFTA specify which government agencies are subject to the agreement, the types of goods and services that are covered, and monetary thresholds that determine when the agreements come into force. So the governments of both countries have already conducted very detailed negotiations that have specified exactly which purchases are covered by Buy American provisions and which are exempt.
Trade agreements are created for a reason. And as Lee says:
as long as we are observing our international obligations, there’s no reason for any other country to complain.
So, U.S. corporations have no reason to oppose U.S. job creation through the Buy American provision. Except for greed.