BEIJING, Feb. 16 (Xinhua) -- The mammoth
787-billion-U.S. dollar stimulus package was finally passed by the U.S. Congress
last Friday, a crucial step forward in Washington's ambition to revive the
The asserted benefit of the bill, however, was
overshadowed by the "Buy American" provisions it included, which barred the use
of foreign iron, steel, and manufactured goods in public works projects funded
by the plan. The clause easily invited deep concern outside and inside the
United States, raising fears of a recurring of protectionism.
"Buy American" has become particularly sensitive in a
time that the world is facing sagging economy and slumping trade, echoing the
Great Depression in the 1930s when a wave of tit-for-tat protectionism choked
global trade and prolonged the economic pain.
WORLD CONCERNED ABOUT
The United States has alleged that the implementation
of the bill will strictly abide by its international trade obligations. Analysts
pointed out that according to the international government procurement
agreement, Canada, the European Union (EU),Japan and a few other countries might
be exempted from the provisions. Even so, potential protectionism embedded in
the provisions still touched the nerves of these nations and blocs.
Canada, with about 40 percent of its steel export
going to its southern neighbor the U.S., has repeatedly expressed its deep
The country's Prime Minister Stephen Harper said on
Feb. 3 that the clause could contravene the North American Free Trade Agreement
(NAFTA) and backtrack on Washington's "international obligations" to break down
global trade barriers.
Harper spoke out again last Friday, after the bill
was approved by the Congress, that "there were some improvements as this went
through the congressional process but obviously all of us remain concerned, and
I think (U.S.) President (Barack) Obama himself has said that he wants to ensure
that the stimulus packages do not lead to protectionist measures in the United
States or anywhere else."
On Feb. 4, the U.S. Senate voted to retain the "Buy
American" provisions in the bill. At the same time, Washington's major trade
partner Japan joined in to lobby against the clause.
Japanese Prime Minister Taro Aso described the
provisions as "ridiculous" and a "breach of WTO (norms) of the current age," and
chief cabinet secretary Takeo Kawamura said protectionism might lead the world
economy to "atrophy".
The EU did not refrain from giving tough criticism,
neither. John Bruton, European Commissions' ambassador in Washington, said last
Thursday that "in the previous administration we had the experience of American
unilateralism in the military sphere. The risk now is that we might be
experiencing American unilateralism in the economic sphere."
The ambassador said such clause would counteract
efforts to avoid protectionism, despite Washington's promise not to violate any
international trade agreements.
China, that also adopted massive stimulus package to
spur its economy, said "no" to a similar plan that bans foreign products in its
domestic stimulus projects.
"We won't practice 'Buy China'," said Chinese Vice
Commerce Minister Jiang Zengwei last Monday, "We'll treat domestic and foreign
products equally as long as they are needed."
Despite international doubts, "Buy American"
provisions in the stimulus bill managed to strike its way through the Congress.
Final approval of the plan coincided with the G7 meeting in Rome last Friday,
raising deeper worry from G7 participants about widespread protectionism.
In the meeting, finance ministers and central bank
governors of the leading industrialized countries pledged to prevent the
snowball from getting rolling by voicing unanimous opposition against trade
barriers and advocating open trade and free market.
British Financial Minister Alistair Darling said
protectionism "is very damaging and will hold up the recovery."
Meanwhile, German Financial Minister Peer Steinbrueck
called for full efforts to "ensure history does not repeat itself," referring to
the spread of protectionism during the Great Depression.
Amid such collective concern, new U.S. finance
minister TimothyGeithner tried to ease the worry at the G7 meeting by
reaffirming Washington's determination to comply with international trade
obligations and President Barack Obama's commitment to open trade.
Apart from criticism from abroad, the provisions
gained no easy passes at home. During the heated discussion of the bill in the
Congress, Republican Senator John McCain, Obama's rival in the presidential
election, had proposed to wipe off the protectionist measures, saying that
"should we enact such a provision, it will only be a matter of time before we
face an array of similar protectionism from other countries -- from 'Buy
European' to 'Buy Japanese' and more."
Although his proposal was rejected, the Senate did
make amendments by adding languages requiring the implementation of the bill to
honor international trade commitments.
A study conducted by Gary Hufbauer and Jeffrey
Schott, both economists at the Peterson Institute for International Economics,
said "the negative job impact of foreign retaliation against 'Buy American'
provisions could easily outweigh the positive effect of the measures on jobs in
the U.S. iron and steel sector and other industries."
Moreover, one day after the stimulus packaged was
passed by the Congress, the U.S. Consumer Electronics Association issued a
statement warning "the 'Buy American' provisions in the stimulus bill will
signal to our trading partners around the world that the U.S. is returning to
the bad old days of protectionism and economic nationalism."
"Rather than stimulate the American economy, these
provisions will lead to retaliation from abroad and cost precious jobs in the
United States," said Gary Shapiro, president of the association, who also
dismissed the promise of keeping with the letter of WTO commitments as "a
Such mounting criticism has put President Obama in a
tough position. In his election campaign, Obama emphasized his determination to
protect and create domestic job opportunities, and even touched upon questions
weather the U.S. trade pacts were protective enough for the national industries.
However, amid strong pressure from the international
society, the formidable challenge for Obama now is to strike a balance between
ensuring domestic job opportunities and strictly respecting trade obligations.
WASHINGTON, Feb. 13 (Xinhua) -- The U.S. Consumer
Electronics Association (CEA) warned on Friday the "Buy American" provisions in
the economic stimulus package would hurt the U.S. economy and lead to a trade
"The 'Buy American' provisions in the stimulus bill
will signal to our trading partners around the world that the United States is
returning to the bad old days of protectionism and economic nationalism," CEA
President and CEO Gary Shapiro said in a statement. Full story
Feb. 13 (Xinhua) -- Canada remains concerned about the "Buy American" provision
in the U.S. stimulus package, which was approved by the U.S. Congress on Friday,
Prime Minister Stephen Harper said.
"There were some improvements as this went through the
congressional process but obviously all of us remain concerned, and I think
(U.S.) President (Barack) Obama himself has said that he wants to ensure that
the stimulus packages do not lead to protectionist measures in the United States
or anywhere else," Harper told a televised news conference in Montreal on
Friday. Full story
BEIJING, Feb. 12 --
The U.S. trade deficit dropped markedly in November as imports from the rest of
the world plunged in reaction to the global recession.
U.S. imports from China and Japan declined at
double-digit rates, and in response to this, U.S. lawmakers are scrambling to
find strategies that will re-ignite global trade, and in their desperation to
find a panacea it is clear that some of them are grasping at straws. Full story
OTTAWA, Feb. 5 (Xinhua) -- Canada has made "great
headway" in the battle to scrap the "Buy American" provision in the U.S.
stimulus package, International Trade Minister Stockwell Day said on Thursday.
"It's not finished yet ...we are keeping on this
full-court press, 24/7 to work with our American counterparts to see this
through to what we hope will be a successful conclusion," Day said in a speech
to the Toronto Board of Trade.Full story
WASHINGTON, Feb. 4 (Xinhua) -- The U.S. Senate on
Wednesday chose to retain "Buy American" provision in its roughly
900-billion-dollar economic stimulus plan despite of criticism from the nation's
major trade partners and warnings of an international trade war.
With a vote of 65-31, the Senate rejected an
amendment by Republican Senator John McCain which would have stripped the
stimulus package of the provision. Full story
WASHINGTON, Feb. 3 (Xinhua) -- The "Buy American"
provisions approved by the House together with the 819-billion-dollar stimulus
package would violate U.S. trade obligations and damage its reputation, with
very little impact on jobs, a new study said on Tuesday.
"The negative job impact of foreign retaliation
against Buy American provisions could easily outweigh the positive effect of the
measures on jobs in the U.S. iron and steel sector and other industries," said
the study conducted by Gary Hufbauer and Jeffrey Schott, both economists at the
Peterson Institute for International Economics. Full story
OTTAWA, Feb. 2 (Xinhua) -- Canada is greatly worried
about a pending U.S. policy barring foreign steel in public projects covered by
a stimulus package and officials have been vigorously lobbying their U. S.
counterparts to change it.
International Trade Minister Stockwell Day said
Monday that the United States had promised to consider Canada's concerns but
there is no guarantee the result would be in Canada's favor. Full story
WASHINGTON, Feb. 4 (Xinhua) -- The Obama administration on
Wednesday imposed a pay cap of 500,000 U.S. dollars for top executives at
companies that receive the government bailout money to weather the current
The new rule came out amid rising public fury about
huge pay packages for executives at financial companies being propped up by
federal tax dollars. Full story
LOS ANGELES, Feb. 3 (Xinhua) -- California Governor Arnold
Schwarzenegger joined 18 other governors on Tuesday in voicing support for the
American Recovery and Reinvestment Act.
"We are writing to express our support for the
American Recovery and Reinvestment Act (ARRA), which passed last week in the
House and is under consideration currently in the Senate," the governors said in
a letter to President Barak Obama. Full story
WASHINGTON, Feb. 3 (Xinhua) -- U.S. President Barack Obama
worked hard to push his massive stimulus plan forward on Tuesday as the Senate
continued the debate on the over 800 billion U.S. dollar spending bill.
One day after expressing optimism that action on the
massive plan will be finalized soon, Obama Tuesday accepted interviews with all
five major U.S. television news outlets -- ABC, CBS, NBC, CNN and Fox News, a
move to seek public support. Full story
WASHINGTON, Feb. 3 (Xinhua) -- U.S. President Barack
Obama on Tuesday nominated Republican Senator Judd Gregg as commerce secretary
in his cabinet.
If confirmed, Gregg, a senator from New Hampshire in
his third term, will become the third Republican Obama enrolled in his cabinet,
following Defense Secretary Robert Gates and Transportation Secretary Ray
LaHood. Full story
WASHINGTON, Jan. 28 (Xinhua) -- The
Democratic-controlled U.S. House of Representatives on Wednesday approved
President Barack Obama's 819-billion-dollar economic stimulus plan, which melds
new spending and tax cuts to jump-start the economy.
The House measure combines roughly 275 billion
dollars in temporary tax cuts for both individuals and businesses along with
about 544 billion dollars for job-creating investment projects, health industry
improvements, expanded aid for the poor and unemployed, and improving
education. Full story