Europe is rankled by ‘Buy American’ provision in US stimulus bill

30th January 2009, Comments 0 comments

The provision, which bars infrastructure projects funded by the bill from using foreign iron and steel, raises questions of protectionism.

Washington -- The mega US economic stimulus bill passed by the House of Representatives Wednesday contains a "Buy American" provision that is raising hackles in Europe.

The controversial amendment would prohibit most purchases of foreign iron and steel used in infrastructure projects to be funded by the 819 billion dollar stimulus.

The bill, which hopes to create millions of jobs with a package of tax cuts and spending, has moved to the Senate, where lawmakers are working on their own version of the plan.

Obama took office last week after campaigning for the renegotiation of international US trade agreements. He has already raised concerns in the US and abroad that the world's biggest economy, mired in recession for more than a year, would construct trade barriers to help protect jobs.

The European Union's trade commissioner, Catherine Ashton, preemptively voiced concern about the American measure.

"We are looking into the situation,” Ashton's spokesman, Peter Power, said in Brussels. “Before we have the final text ... it would be premature to take a stance on it. However, the one thing we can be absolutely certain about is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore."

The provision bars spending the funds made available by the legislation on any infrastructure project "unless all of the iron and steel used in the project is produced in the United States."

Exceptions would be made if the head of the federal department or agency determines that applying the provision is inconsistent with the public interest; there is an insufficient quantity American iron and steel of satisfactory quality; or the inclusion of American iron and steel would increase the cost of the overall project by more than 25 percent.


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