Great op-ed in New York Times today on the effects of the “Buy American” provision included in the stimulus. Turns out Obama’s assurances that these provisions wouldn’t start a trade war aren’t quite holding up. As the article points out:
“But as states and municipalities start spending stimulus money, the idea is starting to look as counterproductive as it should have looked from the beginning. It is sparking conflict with American allies and, rather than supporting employment at home, the “Buy American” effort could ultimately cost American jobs…
Meanwhile, representatives of Australia, Brazil, Canada, the European Union, Japan and Mexico have been consulting about how to respond to the United States’ protectionist drive. After Canadian companies were barred from bidding for American business, news reports say that some 12 Canadian cities passed ordinances against buying American. And the Federation of Canadian Municipalities is expected to discuss a possible coordinated response at its meeting this month.”
Now that the Administration and Democrats in Washington are consumed with implementing bad health care and energy policies, free trade has been put on the backburner, only to the detriment of the economy. At a time of global economic uncertainty, now is not the time to violate our commitments to the World Trade Organization and offend our key trading allies. The retaliation by foreign countries implementing their own protectionist policies would halt US exports and hurt the very same workers and businesses this spending package is attempting to benefit.