Obama's "Buy American" clause stirring global concern

I have been hearing much in the Canadian news about a part of the stimulus bill that states:

There is unsettling news for Canada in U.S. President Barack Obama's economic stimulus bill, or at least in the version approved Wednesday night by the House of Representatives.

It says that steel used in public projects under the $819-billion US plan must be made in the United States, an idea likely to cause trade disputes and block sales by Canadian mills.

As passed by the House, Section 1110 of the American Recovery and Reinvestment Act of 2009 says, "None of the funds appropriated or otherwise made available by this act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron and steel used in the project is produced in the United States."

www.cbc.ca...

This has stirred the concerns of not only Canadians, but all G20 members. Prime Minister Harper is quoted in the same article above as saying:

“I know that countries around the world are expressing grave concern about some of these measures that go against, not just the obligations of the United States but, frankly, the spirit of our G20 discussions,” Harper said

What also struck me was the reaction by the Canadian Chamber of Commerce President who said:

It's bad for Canada, it's bad for the U.S., it's bad for the global economy," he said. "When you see people engaging in protectionism at the time of a recession, the fear is that other countries will retaliate as well."

It would leave U.S. taxpayers paying higher prices for public works and could spark "tit for tat" in trade policies, he said.

"The temptation will always be there for someone to say, 'Look, somebody has put up a barrier against us; we will put up a barrier against them,' and everybody loses as a result," he said.

It reminded me, just yesterday as I perused my local grocery weekly flyer for produce, that about 8 of 10 of the items found had a "Made in the USA" logo.

I believe we (Canada) need to diversify our export partner portfolio, as we have put all of our eggs in one basket, or a majority at least. I equally believe that the US taxpayers funding the stimulus should be the ones getting the jobs and benefit from said package.

I am no economist, so I ask you. Is this protectionism? Or it it tax payer funds being used to stimulate the american economy, and as such, should benefit domestically only?

If this bill in not amended to include Canada and Mexico, does that mean that NAFTA is open for renegotiation?

Are trade wars imminent?

www.cbc.ca...

Edited for typos!




[edit on 1-2-2009 by helpmefindtheway]

[edit on 1-2-2009 by helpmefindtheway]

It's a good bill, America has to seriously start cleaning up its economy. I got
good hopes for Barack Obama, the free market has to be tied down and put
on a short leash from now on. The free market has caused global poverty on
a scale too massive to be allowed to continue existing.

Governments have to start controlling their markets, taking away the power
of major companies, who have been abusing it in total disrespect for human
rights. It's time the illusion that a free market is beneficial, is torn down.

Originally posted by Wehali
It's a good bill, America has to seriously start cleaning up its economy. I got
good hopes for Barack Obama, the free market has to be tied down and put
on a short leash from now on. The free market has caused global poverty on
a scale too massive to be allowed to continue existing.

Governments have to start controlling their markets, taking away the power
of major companies, who have been abusing it in total disrespect for human
rights. It's time the illusion that a free market is beneficial, is torn down.

Look, I'm all for free markets and yet I detest to this day corporations who offshore their operations to other countries because of cost savings.

The problem is, if it wasn't for free markets, the big three would still be the dominant car makers in America and the American people who be paying hefty prices for those cars in order to pay for the wage hikes and benefits that the unions impose on those auto corporations. If it weren't for foreign competition and fair, free markets, giving Americans choices, we would all be paying much higher prices on everything.

The down side to all of that is you can argue that if you don't have a job you cannot afford anything, no matter what the cost is.

I can see why Obama is doing this, but I agree he must be careful. Protectionism can be really dangerous.

honestly

the world needs to know

and know it well

that if we just worked and bought american only

we would not need u

or honestly we wouldn't really have to entertain u

so think about that for a minute

we're nice people but if the world doesn't like us they need to fear us

The United Steel Workers union should be jumping for joy...

However, just mentioning steel does not go far enough, as there are many materials that are used in construction. Copper/aluminum wire; petroleum products, eg. to fuel vehicles and asphalt; various lumber products; wallboard; glass and porcelain products...etc. go into construction.

The US needs to increase domestic production in all of these commodity areas.

Shipping the jobs and technology abroad is what started this mess in the first place...and it was done to get away from UNIONS!

UNIONS, gotta love 'em!

You mean that the man who is going to make the world love us more is already ticking them off?

Seriously, the bill is a Congress thing and they feel it is important to buy in America to keep American jobs alive. If you notice, it has a price limit. If a project calls for more than that then I am sure they will get it from cheaper suppliers outside of our country. I really think it is only to give Americans the illusion that Congress is trying to save their jobs.

In order to "Buy American" the goods need to be manufactured in America, by American workers, who then reap the rewards and pay taxes into the economy.
Buying American "brand" goods made abroad only enriches the boardroom boys and the execs, who also have clever tax lawyers who enable them to offshore tax liabilities. Great isn't it?
It's the same here too as we have seen so much manufacturing moved abroad to countries with cheaper labour costs and lower environmental and worker safety rules.

If all the skilled manufacturing jobs have been sent abroad, and the workforce made to take lower paying jobs, then they can't be the good little consumers that the governments want us to be because we simply cannot afford it.

reply to post by jam321





Is not the definition of "tough" love?

"gonna do it lika dis, an' if'n ya don' like it...TOUGH!"

I think this is good for us.We need to start bringing manufacturing back to this country. We have been getting inferior steel from China which will be used for the infrastructure and that will not be good for us. Manufacturing here means jobs here.

www.kiplinger.com...

[edit on 2/2/2009 by CaptGizmo]

I believe this is a great bill as well; the funds are U.S. taxpayer dollars, i.e. we should get a say in where we want them spent. If the problem has been that we've been importing too many of our goods and people are in agreement....then why should the complaints of other countries bother us.

It's not like we're cutting off our treaties with them, are tearing up our trade agreements, etc., the programs in this bill will just be under said guidelines. I know many people within various industries that will jump at the chance to return to 'Buying American Made', creating the new jobs that were exported and items that we need but instead imported inferior quality junk.

This to me is a form of 'self preservation' not protectionism, we want to use our funds to preserve our way of life, what we decide to import we import, if we don't want to we don't...it's our money or at least it was.

We really need to close our outposts/bases and bring everyone home, recreate our Country and ensure our defenses are in place. Let the world deal with it's own issues, open the borders when were back up to par again.

You will not normally read me saying this...But screw the rest of the world. Just this once. We are in hot water right now because we produce nothing here and we borrow all of our wealth. This is not sound policy for ANY country, especially not ours.

So. For the time being I'm giving the world the finger on this one.

The steel has to be made in America? Well .. what part of the steel? I thought we partially made it .. then shipped it over to Japan .. then back to the USA. Isn't there some long ignorant process like that ?? Pretty sure there is.

As long as PART of the steel process is in the USA, then it can wear the 'made in USA' label. Betchya ...

reply to post by sos37


Don't confuse free-trade with free-markets.
Free markets have controls free trade does not. The free market enforces monopoly laws, tariffs imports and fosters competition here in the US by offering competitive wages, better products, and consistent growth.

Free-trade is a cost cutting profit mechanism that is actually anti-free market as huge monopolies, regional, national, and global corner markets, stifle competition and by design wages and production(which go hand in hand in a true free-market system).

Never confuse the two. The fascist elite in this country have done a good job of confusing the meaning behind both concepts. But they are not created equal.

Originally posted by projectvxn
reply to post by sos37

 

Don't confuse free-trade with free-markets.
Free markets have controls free trade does not. The free market enforces monopoly laws, tariffs imports and fosters competition here in the US by offering competitive wages, better products, and consistent growth.

Free-trade is a cost cutting profit mechanism that is actually anti-free market as huge monopolies, regional, national, and global corner markets, stifle competition and by design wages and production(which go hand in hand in a true free-market system).

Never confuse the two. The fascist elite in this country have done a good job of confusing the meaning behind both concepts. But they are not created equal.

Well, let's say that America could produce and manufacture everything it needs. Does Obama outlaw the purchase of foreign-made goods or just impose huge tariffs on them? And then what about the costs tacked onto our American-made goods because of unions driving up the cost factor to pay for their inflated wages (thinking Big Three on that one)?

I agree with "Buy American", but time and again, American consumers disagree with their dollars by always buying the cheapest available. In normal economic times I would scoff at that, but you have to admit these are far from usual economic times.

I agree that this is not a normal time in American economics. But that is no excuse for what the government is doing.

Imposing tariffs is not a bad thing. The US government would be able to pay for income tax cuts with high enough tariffs. If we have consistent production then wages can increase with that production. That drives up consumption levels and makes companies expand and create jobs and increase wages as the American buying power increases. This is standard free-market.

When you flood the market with cheap imported goods then what you do is stifle national competition, huge conglomerates take over and corner markets by producing abroad and importing to US consumers. And for a while this is good until the wages start slipping far behind any production, and then production starts slipping due to lack of wages, and we wind up like we are now. The government plays a huge role in this as they continually inflate bubbles in the economy that create a false sense of wealth.

Free-trade is good for share values ONLY, and only in the sort term. Along with Fed manipulation of market bubbles they can make this short term strategy last for decades, but sooner or later they come crashing down and we have a depression. So long as we keep practicing lopsided-Keynesian/socialist economics, we will never be able to move forward. Every 20 to 30 years or so we will be dealt a major shock, and occasionally major depressions will occur. Every time in history that we have chosen this path we have been met with major recessions, shocks, depressions, inflation, and all manner of economic disparities. We keep blaming free-market capitalism for the problems we have now, and that is just not true. The American way of doing business, especially at the corporate/conglomerate level is the most ANTI free-market practice I have ever seen.

[edit on 2-2-2009 by projectvxn]

[edit on 2-2-2009 by projectvxn]

That is one part of the bill that is benificial to the U.S. Congress or the President wouldn't have to pass import tarriff laws.If the people would demand and actually buy American goods.For years the people bought import clothes,cars,electronics.At first mostly because they were cheaper,never giving a thought as to what that would do to American production.Now it has come home to roost! We not only manufacture a very small percentage of what we consume,it would take years to gear up to even begin to manufacture enough goods here to make a difference.

We can all thank our Government for the loss of manufacturing jobs.
Buy American where you can.Even if it costs a little more.At least those dollars stay here for a short while longer.

If we all agreed to buy American and make American we would be putting one of the largest corporations ( and biggest destroyer of American businesses ) out of business.....WALMART!!

Hey, I'm all for it!! Who's with me?

Sam Walton was all for products made in American, but, sadly, his dream died with him!

Give us back our jobs!

I made this thread:
www.abovetopsecret.com...

Of course everyone is in an uproar over this. Buy American means less imports from other countries and gets us back to producing at least a small amount of things we can for just as cheap. Many countries are upset because if we do this it will cut into "their" export business. Which is understandable, but America cant continue being a full blown importer of pretty much everything while our people lose their jobs homes and everything they own. It really stinks for alot of countries who rely on us to prop up their export business's. But we cant keep it up anymore we must get back to making some of our own products and that is just the facts of the matter.

Originally posted by Shystargazer

If we all agreed to buy American and make American we would be putting one of the largest corporations ( and biggest destroyer of American businesses ) out of business.....WALMART!!

Hey, I'm all for it!! Who's with me?

Sam Walton was all for products made in American, but, sadly, his dream died with him!

Give us back our jobs!

We cam blame Wal-Mart, but the truth is "Made in China" is everywhere. In order to make "Buy American" work Americans would have to agree to boycott all products made anywhere but the U.S. - this movement would be extremely difficult at first because it means you don't get to shop at the most convenient places and finding what you CAN buy while sticking to the movement would be really tough also. That would give the opportunity for several startups supplying only American-made products, and as time went on more and more American manufacturers of goods might come online. The question is, how long would it take and how patient can people be?