Archive for the ‘buy American’ Category

Trade Barriers Could Threaten Global Economy

March 18, 2009

At least 17 of the 20 major nations that vowed at a November summit to avoid protectionist steps that could spark a global trade war have violated that promise, with countries from Russia to the United States to China enacting measures aimed at limiting the flow of imported goods, according to a World Bank report unveiled yesterday. 

By Anthony Faiola
Washington Post Staff Writer

The report underscores a “worrying” trend toward protectionism as countries rush to shield their ailing domestic industries during the global economic crisis. It comes one day after Mexico vowed to slap new restrictions on 90 U.S. products. That action is being taken in retaliation against Washington for canceling a program that allowed Mexican truck drivers the right to transport goods across the United States, illustrating the tit-for-tat responses that experts fear could grow in coming months.

The report comes ahead of an April 2 summit in London in which the heads of state from those 20 industrialized and developing economies will seek to shape a coordinated response to the economic crisis. Their inability to keep their November promises is another indication of how difficult it will be to implement any agreement reached next month on a global scale.

Read the rest:
http://www.washingtonpost.com/wp-dy
n/content/article/2009/03/17/AR200
9031703218.html?hpid=topnews

Stimulus: “Buy American” Retained; Sure To Anger International Partners

February 14, 2009

Congress approved protectionist measures in a $789 billion stimulus bill Friday that U.S. trading partners have warned could spark a trade war.

Associated Press

The bill, however, left the Obama administration some room to maneuver to appease other countries who say it will benefit U.S. companies unfairly.

The stimulus bill was approved by the House Friday afternoon and by the Senate later in the evening. It now goes to President Barack Obama who is expected to sign into law quickly.

Major partners, including the European Union and Canada, say the legislation favoring U.S. steel, iron and manufactured goods for government projects could undermine pledges by the leaders of major economies not to resort to perfectionism during the world economic downturn.

Requirements known as “Buy American” were softened as the bill progressed through Congress and after strong criticism from abroad. Senate and House negotiators agreed to a version that would require the government not to violate trade agreements when implementing the law.

The bill also allows the Obama administration and state governments to waive requirements to favor U.S. companies if they deem it in the U.S. public interest and if they publish a justification.

The dispute has put Obama in a difficult position. While campaigning last year, he raised questions whether U.S. trade agreements contained sufficient protection for labor and environmental standards. He has warned recently, however, about antagonizing trading partners and has made clear that passage of the overall stimulus bill is needed urgently to mend the U.S. economy.

In several television interviews last week, he said the stimulus package should not include protectionist language that could trigger a trade war. But now that it does, he is likely to sign it anyway. The measures appear, however, to give the administration discretion about how to implement spending decisions, given the requirement of meeting trade obligations.

Read the rest:
http://www.foxnews.com/politics/elections/2009/
02/13/congress-approves-protectionist-measure-
spark-trade-war/

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President Obama visited the Caterpillar factory in East Peoria, Illinois this last week.

Caterpillar says it pays $100,000 in tariffs on each piece of heavy equipment it exports to Columbia, because the U.S. Congresss has failed to pass the free trade agreement….

Now with this “buy American” provision in the stimulus it is likely the U.S. will find trouble with other trading partners…

Related:
 Pastor Obama Continues With Holy Stimulus, But The Congregation Isn’t Buying

Why Europe No Longer In Obama Camp Over Stimulus
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China’s leader Hu Jintao cautioned President Obama about the “buy American” provision in the economic stimulus plan during a phone conversation.

Related:
CNN:
http://edition.cnn.com/2009/POLITIC
S/02/05/senate.buy.american/index.html

 “Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

 Dallas Federal Reserve Chief, China, Germany All Call Protectionism “Death”

China announced that President Hu Jintao, seen here in 2008, ...
President Hu Jintao of China (AFP/File/Louisa Gouliamaki)

Made in china.jpg

Why Europe No Longer In Obama Camp Over Stimulus

February 5, 2009

Europe’s euphoria over Barack Obama is fading fast. As Congress wrangles over the President’s $819 billion stimulus package, a “buy American” clause has the European Union threatening legal action and retaliatory sanctions and opening up the prospect of an explosive trade war.

Just weeks after hailing Obama’s election, E.U. officials are now howling that his plans are putting a global economic recovery at risk. They want Obama to resist any retreat into protectionism, warning that it could turn the recession into a 1930s-style slump.

The “buy American” clause in the President’s economic stimulus package states that only U.S. iron, steel and manufactured goods can be used in construction projects funded by the bill. The package has already been approved by the House of Representatives, and the Senate is currently debating an $888 billion version of the bill.

Time Magazine

The provisions might protect U.S. jobs in the short term, but the E.U. says they would hobble global trade, a key motor for the world economy. John Bruton, the E.U. ambassador in Washington, has described the measures as “setting a dangerous precedent, and “neither the right or effective response to the situation.” German Chancellor Angela Merkel has said that “past world economic crises showed protectionism would be the completely wrong answer.”

Similar measures to “buy American” have been adopted or considered in Argentina, China, Indonesia, Ecuador, India, Russia and Vietnam. Pascal Lamy, director-general of the World Trade Organization, warned on Feb. 2 that any go-it-alone route would foster a spiral of retaliation. “Today we run the risk of sliding down a slippery slope of tit-for-tat measures. It was Mahatma Gandhi who said ‘An eye for an eye makes the whole world blind,’ ” Lamy said.

The E.U.’s alarm is partly a reflection of its own precarious situation in the face of a widespread backlash against globalization. The commission is now scrutinizing the E.U.’s own stimulus schemes for potential discrimination against foreigners. In focus are plans such as France‘s $10 billion move to bail out its car industry by requiring firms to source car parts from local suppliers.

“In this climate, many people resent seeing billions of tax dollars leak outside the country. But if this ‘buy American’ clause is adopted, it will make it harder for those in Europe in arguing for markets to stay open,” says Simon Tilford, chief economist at the London-based Centre for European Reform (CER) think tank. “Also, after Europe’s huge expectations for Obama, there is bound to be a huge disillusion with him if the U.S. goes down this road.”

“Buy American” is highly popular among Congressional Democrats and trade unions. Obama supported it during his White House campaign, even distributing campaign buttons and flyers with a special emblem.

But the move is opposed by most Republicans, and Senate minority leader Mitch McConnell has demanded that it be stripped from the bill. Major U.S. companies like General Electric and Caterpillar have also opposed the provision, saying it will hurt their ability to win contracts abroad – and impose layers of bureaucracy on what is already likely to be a cumbersome contracting process.

Read the rest:
http://news.yahoo.com/s/time/08
599187716200

Related:
Senate Votes “Softened” “Buy American” Section in Stimulus

“Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

Senate Votes “Softened” “Buy American” Section in Stimulus

February 5, 2009

A “Buy American” provision in the stimulus bill crafted by the House of Representatives may have sounded like good economic thinking that would keep money flowing to U.S. workers — but it violates international trade agreements and could have sparked a trade war with America’s overseas allies and friends.

Last night, the U.S. Senated voted to soften the “Buy American” part of the stimulus so that it won’t violate the United States’ existing trade treaties.

Senator John McCain wanted the entire “Buy American” pledge removed from the bill but he was overruled.

There was intese pressure to remove the “Buy American” language directed at the U.S. from China, Germany, Britain and other trade partners.

China’s leader Hu Jintao cautioned President Obama about the “buy American” provision in the economic stimulus plan during a phone conversation.

Related:
CNN:
http://edition.cnn.com/2009/POLITIC
S/02/05/senate.buy.american/index.html

 “Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

China announced that President Hu Jintao, seen here in 2008, ... 
President Hu Jintao of China (AFP/File/Louisa Gouliamaki)

“Buy American” Sounds Good; Carries An Unbearable Down Side

February 4, 2009

American tax dollars directed at America’s ailing economy should be spent only on American products. That sounds logical – and compassionate to US workers, who can use all the lovin’ they can get. But the “Buy American” provision of the megastimulus package winding through Congress makes little sense. Neither is it kind.

Christian Science Monitor, Editorial

Last week, the House passed an $819 billion economic recovery plan with the stipulation that all public projects funded by the bill (read highways, airports, mass transit, etc.) use only iron and steel produced in the U.S. of A. The Senate version goes further, to include all manufactured products.

The lawmakers’ thinking on this is understandable. They’re sensitive to the outrage that would come when it’s discovered that some federal monies will inevitably go to foreign goods, supporting foreign jobs. With an economy this bad, better take care of our own, they reason.

Related:
 Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

But the gain in US jobs will not be worth the ultimate cost.

For starters, the number of jobs generated by the House version will be tiny – about 1,000 steel jobs, according to a study this week by the Peterson Institute for International Economics. If the Senate’s broader version is adopted, about 9,000 US manufacturing jobs would be gained, according to the institute.

Now look at the loss side of the ledger. A “Buy American” provision is sure to generate retaliation abroad (threats loom already). If trading partners strike back on steel, the US industry could lose exports equal to or greater than the number generated by the stimulus.

If other countries choose to shut out only a small percent of American manufactured goods from their own government-funded projects, the US would lose 6,500 jobs. More extreme measures could cost 65,000 jobs.

Meanwhile, cutting foreign products from the stimulus bill means less price competition, more expensive public-works projects, and thus fewer of them to go around.

Further, the Buy American provisions violate US trade obligations (though one wonders whether auto bailouts and other rescue measures around the world will end up being legally challenged).

Read the rest:
http://www.csmonitor.com/2009/
0204/p08s01-comv.html

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

February 4, 2009

Since he became President of the united States, what world leader gave Barack Obama real substantive advice?  Arguably, Hu Jintao of China, who cuationed the president about the “buy American” provision in the economic stimulus plan.

Buy American sounds good to many voters, as they watch jobs go away, local industries close and Wal Mart fill with foreign made good that used to be “made in America.”

But to President Hu in China and Angela Merkel in Germany and a host of other world leaders, “buy American” is protectionism, a hinderance to world trade and a violation of just about every international free trade agreement.

Nancy Pelosi and her House colleagues put buy American into the stimulus, and judging from radio call in shows most Americans buy it.

So President Obama will have yet one more challenge to ecplain why “buy American” is not good for the U.S. and the world…

Related:
Obama cuts ‘Buy American’ plan after EU trade war threat

 Dallas Federal Reserve Chief, China, Germany All Call Protectionism “Death”

 Economy Sparking Protectionism, Global Trade Disputes?

“Buy American” Sounds Good; Carries An Unbearable Down Side

 Obama Forced to Rethink “Buy American” in Stimulus After Hits from China, Germany, Others

 China, Germany Both Pressure Obama on Protectionism

Obama cuts ‘Buy American’ plan after EU trade war threat

February 4, 2009

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

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

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

From The Times (UK)

Read the rest:
http://www.timesonline.co.uk/tol/ne
ws/world/europe/article5655115.ece

Barack Obama: Credibility Lost?

February 2, 2009

In two weeks as president, Barack Obama has thrown away his credibility and destroyed trust — more than any other President of the United States in the History of the Republic.

Let’s just say that for the sake of argument.

This is now like bleeding from a thousand cuts.

Related on FEB 3 about 1 PM Eastern:
Daschle Out; Major Obama Setback

Nothing like Bill Clinton’s early-going gays in the military effort or Hillary’s closed door try at revising the American medical system in the dawning days of Bill’s presidency….

But Barack Obama’s preaching about “bipartisanship” was not matched with actions as Nancy Pelosi and other Democrats crafted the economic stimulus package without taking into account Republican viewpoints.

Maybe if Barack had been in the Senate longer he’d know more about bipartisanship….

“We won” Republicans were told, when they objected to certain stimulus package goodies like funding to fight bird flu.

That only saves jobs if workers don’t die at work….

The Treasury Secretary admitted to tax evasion.  Ditto the president’s nominee for HHS, Tom Daschle.

Psst: This is what transparency gets us.  The right thing to do when things like this come up is to ask the guy to withdraw, not ask for an ‘exception.”

Nancy Killefer, who failed for a year and a half to pay employment taxes on household help, has withdrawn her President Obama nomination to be the first chief performance officer for the federal government, the White House said Tuesday.

Chief Performance Officer Nancy Killefer
Nancy Killefer
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Robert Gibbs
 
White House spokesman Gibbs said, “Nobody’s perfect.”  Did he mean Daschle?

The nominee for Deputy Secretary of Defense used to be a lobbyist.  He’s still in the running, despite the president’s vows against lobbyists and for ethics.

On al-Arabiya TV the president made a plea to Muslims.  So Iran demanded an apology for American wrongs.

Just 11% of U.S. voters think America should apologize to Iran for “crimes” against the Islamic country.

The stimulus bill written by Democrats has a “buy American provision.”  China, Germany and others objected.

Canada hopes U.S. officials will exempt America’s top trading partner from “Buy American” provisions in the economic stimulus bill before Barack Obama arrives in Canada this month for his first foreign trip as president.

The stimulus, meant to create jobs, contained at least two two questionable items  — $75 million for smoking cessation programs and $400 million to slow the spread of HIV and other sexually transmitted disease.  Both  have already been dropped from the most recent draft of the measure.  You can recall others like the sod for the Mall in Washington DC….

Nearly half of U.S. voters (49%) say Barack Obama is politically more liberal than they are.

The president promised to close Gitmo and pull out of Iraq.  He has done neither: but has angered some militay people.

He has cut defense by 10% and started to discontinue the term “war on terror.”

The president has opened an exchange of words with radio personality Rush Limbaugh….

The number of voters saying Obama is more liberal than they thought on election day is growing…..

Tough two weeks.  Even with a dedicated Democratic House and Senate the public can lose trust and confidence …..

John E. Carey
Peace and Freedom

Related:
Mullen: Cash crunch threatens US security, Defense Spending

Obama Orders U.S. Defense Cut 10%

Under Obama, `war on terror’ catchphrase fading

 Obama Team Wants Pentagon Budget Focused More on Current War, Less on Future Programs

Obama Told His Actions On Gitmo Could “jeopardize those who are fighting the war on terror”

Troubling Obama Trends Seen By Some In Military? Why Die For “Limited Goals” In Afghanistan?

Obama’s Unnecessary Muslim Apologia; Misguided on al-Qaeda

US President Barack Obama, seen here on January 29, 2009, sits ... 
US President Barack Obama, seen here on January 29, 2009, sits alongside Treasury Secretary Timothy Geithner

CNN:
http://www.cnn.com/2009/POLITICS
/02/02/campbell.brown.transparenc
y/index.html

The New York Times also has an editorial on Tuesday suggesting that Mr. Daschle should withdraw his name too.

Bill Richardson withdrew after being nominated as Commerce Secretary as a grand jury was at work investigating portions of his state government.

Dallas Federal Reserve Chief, China, Germany All Call Protectionism “Death”

February 2, 2009

Dallas Federal Reserve President Richard Fisher cautioned Monday that protectionist tendencies are dangerous, calling them the “crack cocaine” of economics.

Speaking on C-Span, Fisher addressed a proposed congressional fiscal stimulus law that would offer “Buy America” provisions in an effort to encourage the purchase of domestic goods. However, such provisions are dangerous, Fisher warned. “Protectionism is the crack cocaine of economics … (it) leads to economic death,” he said.

“We just cannot afford to go down that path,” Fisher added.

The Dallas Fed President just concluded his term as a voting member of the Federal Open Market Committee. Known as one of the most ardent inflation hawks in the nation’s policymaking body, Fisher added in his comments that failure to remove added liquidity from the system in a timely manner could result in serious price inflation.

The Federal Reserve needs to be cautious that their excessive lending and record low interest rates, set at a target range between zero and 0.25 percent, Fisher said, warning that an inflation problem could be “baked” into the country’s economic outlook.

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LONDON  — Visiting Chinese Premier Wen Jiabao on Sunday warned against protectionism in face of lingering global financial crisis.

Speaking at a meeting with former British Prime Minister Tony Blair, Wen said as international financial crisis is spreading, his visit to London was to send a message of confidence for Britain and China to join hands in overcoming current difficulties.

He noted that the two sides should further explore the potential for cooperation, and guard against trade protectionism, in particular.

Read the rest from China Daily:
http://www.chinadaily.com.cn/china/2009-02/02/conte
nt_7435205.htm

Related:
Economy Sparking Protectionism, Global Trade Disputes?

 Obama Forced to Rethink “Buy American” in Stimulus After Hits from China, Germany, Others

Global Economy Sparks Protests; Governments Fear Greater “Social Unrest”

January 31, 2009

Americans just started a new presidency but in China, Russia, France, Iceland and Britain, some leaders already fear that the worsening global economy will result in calls for new governments with new leaders and ideas.

Protesters in Rusia’s eastern most industrial hub and seaport, Vladivostok, called this week for new government leaders because of the economic down turn.

Opposition groups led by Communists protested the economic policies of the Russian government in the eastern city of Vladivostok on Saturday.
James Hill for The New York Times

The protest was peaceful; but more protests are planned.  And previous protests like this one in Russia ended in violence and the police making dozens of arrests. 

The crowd called for the replacement of Dmitri Medvedev and Vladimir Putin, Russia’s top leaders, for mismanaging the economy.

On Saturday protesters held demonstrations throughout Russia, offering largely subdued, but pointed criticism of the government’s economic policies as the country continues to sink deeper into an economic morass, the New York Times said.

In Britain, Prime Minister Gordon Brown is under fire.  He is currently taking heat for a jobs and rights protest that stems from his pledge that “British jobs need to be British.”
.
Thousands of workers across Britain have walked off their jobs following protests over the use of foreigners at a Lincolnshire oil refinery.

On Saturday, the number of strikers multiplied, with hundreds of energy workers across the UK protesting — and with lines of police around them.

And millions of Chinese have gone home for the Spring Festival or New Year and told not to return to their jobs.  China is so worried about domestic unrest that it has started its largest anti-democracy crackdown ever: specifically targeting the media and Internet.

“People have this psychology of crisis,” said Victor Yuan, chairman of Beijing-based consultant Horizon Research Consultancy Group, which does polling for the private sector and the government.

Horizon’s latest survey showed consumer confidence at its lowest since the outbreak of severe acute respiratory syndrome, or SARS, in 2003.

“The real, real winter for the Chinese economy hasn’t come yet,” said Chen Jian, chairman of Hangzhou Hengwei Investment Co., which has business in restaurants, real estate and trading.

In France, President Sarkozy can’t get away from the jeers and shouts of protestors when he makes public appearances.  He has taken to firing public officials that  don’t keep protesters far away from the President’s ears.

A crowd of 300,000 protested in Paris this week in the largest protest in 10 years, some said.

null 
Paris this week

Countries such as France and Greece have been hit by riots and strikes as militant unions demand protectionist measures to keep out foreign rivals.

And both Germany and China expressed fears of American protectionism this week.  Angela Merkel of German told audiences at the economic conference in Davos that the U.S. auto bailout hurts the global economy and spells a new era of protectionism from the U.S.  China’s Hu Juntao told President Barack Obama that the “buy American” provision in the stimulus was rank protectionism and needed to be scuttled.

The economy has made the entire world more tense.

The French Finance Minister Christine Lagarde said, “We’re facing two major risks: one is social unrest and the second is protectionism.”

“We need to restore confidence in the systems and confidence at large,” she added.

Christine Lagarde
Lagarde

Former U.N. Secretary-General Kofi Annan says the world body needs to be reorganized in view of the economic crisis.

“The current architecture of managing global affairs is broken and needs to be fixed,” Annan said.

The worldwide economic recession has exposed a “crisis of global governance” that can only be addressed by the radical reform of the United Nations, said Mr. Annan.

And Britain’s Prime Minister Gordon Brown has called on world leaders to set about reforming international financial institutions to prevent a repeat of the circumstances that led to the current financial crisis.

“We’ve got to be far bolder and far more imaginative,” Brown said. “We want to create a global society. But we need to have global institutions that work and the problem is the institutions we built 60 years ago are out of date.”

By John E. Carey
Wakefield Chapel, Virginia

The BBC on Russian Protests:
http://news.bbc.co.uk/2/hi/europe/7862370.stm

Related:
Britain:
 Oil refinery strikes: Protests over foreign workers

France’s Sarkozy Getting Testy Amid Public Disapporval, Fires Public Servants

China, Germany Both Pressure Obama on Protectionism

Kofi Annan: Global Economy Tells Us, New forms of government needed

From CNN:
http://www.cnn.com/2009/BUSINESS/0
1/31/davos.wef.brown/index.html

http://www.cnn.com/2009/BUSINESS/0
1/30/britain.refinery.strikes/index.html

Paris:
http://www.belfasttelegraph.co.uk/news/
world-news/300000-protest-in-paris-14
162666.html?r=RSS