A few weeks ago, I noted Businessweek's cover story which asked a simple question: "How much of Obama's mammoth fiscal stimulus will leak' abroad, creating jobs in China, Germany, or Mexico rather than the U.S?" In the age of corporate written trade policies that incentivize outsourcing, this is a key question, as U.S. tax dollars could end up simply heading offshore unless Congress takes action.
The good news is that Congress is taking action, attaching legislation by Rep. Peter Visclosky (D-IN) mandating that stimulus money spent on iron and steel be spent in the United States. The bad news is that Bloomberg News now notes that a corporate lobbying campaign is ramping up to strip those provisions out:
General Electric Co. and Caterpillar Inc. are among U.S. exporters that oppose "Buy American" provisions in the $825 billion stimulus legislation...
The fight presents a dilemma for President Barack Obama, who must balance demands from unions and Democrats to protect American jobs against the threat that the Buy American measure would spark protectionist measures by other countries that might deepen a global recession.
The U.S. Chamber of Commerce, the Emergency Committee for American Trade in Washington and other business groups warned of that possibility in a letter today to congressional leaders such as House Speaker Nancy Pelosi.
The story notes that both GE and Caterpillar generates roughly half of its sales from outside the United States, so their opposition to "Buy American" provisions isn't surprising. And though the names of the U.S. Chamber of Commerce and Emergency Committee for American Trade In Washington include references to the U.S./America, their membership is comprised of corporations whose profit margins have greatly benefited from free trade and procurement policies that encourage them to troll the world for the worst labor, environmental and human rights conditions.
But a spokesman for U.S. Steel has it right. "If American tax dollars are going to be invested, it seems only rational that American products would be favored...The whole intention is to stimulate the creation of American jobs." That's a truism, even if U.S. Steel will benefit from it.
It's not clear whether "Buy American" provisions will survive the U.S. Senate - the house of Congress that traditionally rubber-stamps Corporate America's wishes. And it's not yet clear where the Obama administration is on the issue, especially considering Obama economic aide Larry Summers' recent letter stating - rather perplexingly - that "the incoming Obama Administration has no intention of using any funds to implement an industrial policy" - as if having any industrial policy would be horrific.
That will have to be balanced against Obama's desire to show a real boost in domestic macroeconomic data after the stimulus. Indeed, stripping out Buy American provisions in the short term - and slow-walking fair trade reforms in the long-term - will limit the effectiveness of the stimulus package in boosting those macroeconomic data.
As an anti-spam measure, there is a 24-hour waiting period after registering before new users can comment. blog advertising is good for you
blog advertising is good for you
