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Obama Will Review Buy American Provision in Stimulus (Update1)
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By Roger Runningen and Hans Nichols
Jan. 30 (Bloomberg) -- President Barack Obama’s administration will examine a “buy American” requirement in economic stimulus legislation that has raised concern among U.S. trading partners, White House press secretary Robert Gibbs said.
The administration “will review that particular provision,” Gibbs said today at his regular briefing. The president’s advisers understand “all of the concerns that have been heard, not only in this room, but in newspapers produced both up north and down south.”
He refused to say whether the administration supported or opposed keeping that part of the legislation intact. Nor did he say what the president would do if the provision remains once the bill clears the House and the Senate.
The issue may cloud Obama’s trip to Canada on Feb. 19, his first journey outside U.S. borders as president. Officials in Canada, the top U.S. trade partner, are criticizing a part of legislation that passed the U.S. House of Representatives Jan. 28 that requires the use of U.S.-made iron and steel in infrastructure projects.
“U.S. protectionism is about to make Canada’s recession a lot worse,” Ralph Goodale, house leader for the opposition Liberal Party, said today in Parliament.
‘Serious Matter’
Prime Minister Stephen Harper said yesterday that he will complain to U.S. officials over the “buy American” measure. “This is obviously a serious matter,” he said.
The provision also is opposed by U.S. companies with significant sales overseas such as General Electric Co. and Caterpillar Inc., which warn it may spark other countries to retaliate by restricting U.S. products.
The Senate is working on its own version of the stimulus legislation.
The U.S. provision is “clearly against trade agreements,” and Canada would be able to file a complaint under either the North American Free Trade Agreement or with the World Trade Organization, said Simon Potter, an international trade lawyer with McCarthy Tetrault in Montreal.
Harper is proposing a C$40 billion ($32.6 billion) plan to boost Canada’s economy, which like the U.S. is being gripped by a recession. Canada ships about three-quarters of its goods to the U.S. and is being squeezed by plunging demand here.
“I don’t think there’s any doubt that trade is going to be on an agenda for a bilateral meeting between the United States and Canada,” Gibbs said.
To contact the reporters on this story: Roger Runningen in Washington at
rrunningen@bloomberg.netHans Nichols in Washington at
Hnichols2@bloomberg.net
Last Updated: January 30, 2009 15:52 EST
