68 Dems, 1 Republican Urge Obama Not to Ban "Buy-American" Incentive for Domestic Manufacturing
On Thursday, 68 House Democrats and one Republican sent a letter to President Barack Obama encouraging him to reevaluate part of the Trans-Pacific Partnership deal that would ban “Buy American” incentives that help secure U.S. jobs. The letter says:
We do not believe this approach is in the best interest of U.S. manufacturers and U.S. workers. Of special concern is the prospect that firms established in TPP countries, such as the many Chinese firms in Vietnam, could obtain waivers from Buy American policies. This could result in large sums of U.S. tax dollars being invested to strengthen other countries’ manufacturing sectors, rather than our own. At a time when U.S. manufacturing only employs 11.71 million people, a 40% decline from its peak in 1979 and the lowest since 1941, we simply cannot allow this to happen.
Public interest groups also worry that the same trade policies that could ban Buy American breaks will also prevent the U.S. government from making environmental or public health stipulations in federal contracts. The current language barring preferential treatment for American goods is so broad as to limit government specifications on goods to purely functional aspects. When contracting for paper, for instance, the government could specify that it wants to buy paper of the dimensions 8.5" by 11" -- but it could not require that the paper be composed of recycled materials or use non-toxic dye.
The potential "Buy American" ban also conflicts with a top theme of Obama's re-election campaign -- boosting U.S. manufacturing. In February, the administration proposed fixing a tax loophole that has been exploited by oil and gas companies in order to provide breaks to domestic manufacturers. The tax proposal is not expected to gain any traction during an election year, however, although prospects for the trade agreement are much stronger. Last year, Congress approved three free trade deals initially negotiated by President George W. Bush that Obama had decided to support.
Read more about the potential ban here.