January 30, 2009

Stimulus "Buy American" Restrictions Called "Catastrophic"

Foreign leaders are decidedly puckered by the "buy American" restrictions in the Obama so-called "stimulus" plan, aka Porkzilla. A rider in the scheme blocks "the use of foreign-made iron, steel, textiles and manufactured products."

As China, India and the European Union warned that protectionist barriers would hinder world trade, Prime Minister Stephen Harper said Canada expects the United States to respect its free trade commitments as it moves to build new roads, railways, bridges, airports and housing. [...]

"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."

Liberal foreign affairs critic Bob Rae said bluntly the position taken by the U.S. Congress is illegal.

"A country cannot bring in a measure that restricts international commerce and international activity in this way," he said.

Officials claim that Porkzilla's restrictions on trade are contrary to the North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) legal obligations. Also, according to International Trade Minister Stockwell Day,
"History shows clearly that you can't fall back into protectionist measures. That happened in the 1930s and what could have been a bad one- or two-year recession turned into, as we know, the Great Depression. So we want to curtail that."
It's also feared that protectionism by the U.S. will trigger similar measures internationally.

Based upon the reported international nervousness regarding the "stimulus" scheme, one could contend that nobody in the Obama administration nor Congress has actually read the proposal in its entirety or that those who are familiar with Porkzilla lack a workable familiarity with economics, history and international treaties.


By Mike Pechar at January 30, 2009 02:56 PM | | l digg this