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Buy American Is About Building Jobs, Not Protectionism |
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The attack by corporations and their media mouthpieces on the Buy American provision in the economic recovery package illustrates just how far removed Big Business is from the needs of U.S. workers—and, ultimately, from what will benefit the nation.
Last night on the PBS “NewsHour with Jim Lehrer,” AFL-CIO international economist Thea Lee honed in on the false arguments pushed by corporate interests who mutter darkly about how Buy American provisions will lead to “trade wars.” The Buy American provision mandates that only U.S.-made goods be used in projects funded by the bill—and requires that these steps are taken in a manner consistent with U.S. international trade obligations. So screams of “protectionism” are a red-herring.
Says Lee:
I think we have to make a distinction between protectionism in a sense of raising tariff barriers…and stopping trade and government procurement decisions, where governments choose to spend their own tax dollars in a way which is targeted towards creation of good jobs at home. And it’s actually a rational step for governments to take in a time where we don’t have the coordination of fiscal stimulus.
U.S. taxpayers are going into debt to pay for the nation’s economic recovery—shouldn’t those dollars create jobs for Americans? As Lee notes, the U.S. taxpayer wants to
stimulate the U.S. economy, not the global economy…to create good jobs at home in their own communities. They want their tax dollars spent that way. And other countries may not step up to the plate and do the appropriate level of fiscal stimulus, if they think they can free ride off of what the United States has done.
Take the example of Canada. As the Economic Policy Institute (EPI) points out, the United States and Canada are both parties to the World Trade Organization (WTO) Agreement on Government Procurement (GPA), which was signed by 37 other governments, including the European community, Hong Kong, Japan and Korea, but not mainland China, Brazil or Russia. In addition, the North American Free Trade Agreement (NAFTA) also contains further, bilateral commitments on government procurement requirements.
The GPA and NAFTA specify which government agencies are subject to the agreement, the types of goods and services that are covered, and monetary thresholds that determine when the agreements come into force. So the governments of both countries have already conducted very detailed negotiations that have specified exactly which purchases are covered by Buy American provisions and which are exempt.
Trade agreements are created for a reason. And as Lee says:
as long as we are observing our international obligations, there’s no reason for any other country to complain.
So, U.S. corporations have no reason to oppose U.S. job creation through the Buy American provision. Except for greed.
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The perception globally is that “Buy American” is in fact the start of a new protectionism. The protectionism advocated by labor organizations of Germany and Britain have also taken taken on an “anti-immigrant” and racist aspect.
For example:
German union seeks to divide European and North American GM workers
The reactionary politics of economic nationalism
20 February 2009
Ulrich Rippert
On Tuesday, General Motors announced plans to cut its workforce world-wide by 47,000, with 26,000 jobs to be slashed in Europe alone. The main German engineering union, IG Metall, and its shop stewards organized in works councils at GM’s German subsidiary Opel, reacted to the announcement by rejecting any joint struggle by GM workers in Europe and North America.
The joint works council at Opel is instead demanding the separation of GM’s European factories from the parent company headquartered in Detroit, while it collaborates with Opel management and the German government to impose massive concessions on Opel workers.
…”
Read the full story here:
http://www.wsws.org/articles/2009/feb2009/pers-f20.shtml
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Trade unions extend nationalist campaign to defend “British jobs”
By Robert Stevens
18 February 2009
http://www.wsws.org/articles/2009/feb2009/brit-f18.shtml
Recent unofficial strikes, which began at the Lindsey oil refinery in Lincolnshire, England, and spread to power stations and oil refineries across the UK were conducted based on the demand “British Jobs for British workers.”
…
Denunciations of globalisation and demands for a “Britons first” employment policy translate into a protectionist strategy that can only have the most devastating consequences for all workers, regardless of nationality.
Global corporations are indeed involved in a bitter struggle for markets and in order to maintain profitability and survive. But sowing national divisions amongst workers facilitates this process by pitting each against all and asserting shared interests between workers and corporations based in “their” nation. The logic of economic nationalism is war, with workers sent to kill each other on behalf of various national capitalist cliques.
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No use to go-off like the responders above. If the countries are
adhering to already negotiated agreements, then what’s the panic ? Those negotiations can always be renegotiated with nations’ mutual interests affirmed. Trade wars leading to shooting wars ? That’s a stretch. The folly of that was learned by all by the end of the 20th Century. Only corporate imperialism
threatens the peace today.
I agree. ‘Buy American’ would create jobs. And if putting Americans back to work is protectionism then maybe it’s time we practiced it! Without good paying jobs for LEGAL American workers this country will not survive. Personally I want my grandchildren, great-grandchildren and my descendants on down the line to have it better than I’ve had it. And I’ve had it pretty damned good.
E-Verify also helps put LEGAL Americans to work. Shamefully, it was stripped from the sitmulus package. Our politicians are cowards! They bow to the likes of the unAmerican US Chamber of Commerce and other lobbyist groups who claim E-Verify is ‘racist’ and doesn’t work. But, truth be known, E-Verify is about 99.9% effective. And unlike some claims it does NOT cost the employers undue time or money to use. It’s a FREE service. E-Verify is set to expire March 6th. Please join with me in contacting our elected officials to urge them to renew, or better yet make permanent and mandatory, this important ‘job aid’ for LEGAL American workers!
Where is the AFL-CIO on the issue of keeping jobs for AMERICANS. Oh yea, thats right they SUPPORT amnesty for illegal aliens. They truly are part of the problem and NOT part of the answer! Americans that are not in a union must just laugh, when they see union members laid off s and being replaced by illegal immigrants.
We need to support this part of the Stimulus package, and we need to talk about Buy American everyday. We are getting the short end of the stick on all the trade agreements with other countries. I want to go into stores and see “Made In America” again. I truly believe this will help drive this point home.
Are you under the impression that the purpose of the U.S. Chamber of Commerce was to support American business? If you are, we were both mistaken. The Chamber has joined forces with Senator Mitch McConnell (R-KY) to oppose the “Buy American” provisions of the American Recovery and Reinvestment Act of 2009.
The obvious irony is that the primary purpose of this stimulus bill is to create jobs and economic activity, but buying foreign goods does neither as well as buying American. Despite this contradiction, they have attempted to justify their position by unearthing the discredited theory that the “protectionist” Smoot- Hawley tariff, which levied a six percent tax on imported goods caused the Great Depression by straining trade relations with our global partners. They contend that requiring American highways and infrastructure be built with only American products will inflame our current trading partners and lead to retaliation. The only problem with this theory is it’s not true.
The Depression was well under way by June, 1930 when Smoot-Hawley was enacted. Imports had already declined twenty-four percent in the year prior to Smoot becoming law. In addition the United States was running a trade surplus in 1930 and continued to do so until a very small trade deficit in 1936. This is much different than our current record breaking deficit of over seven hundred billion dollars. The leverage to retaliate would seem to be on the American side considering we are buying more goods from them than they are buying from us. Will they stop selling to us, further encouraging our industries to resume production and eliminating their slice of our market?
Another problem with the Smoot-Hawley theory is that in 1922 the Fordney-McCumber Act which imposed larger tariffs than Smoot became law, but a depression didn’t happen. In fact, the Fordney –McCumber Act was followed by seven years of expanding world trade and prosperity. The Chamber and Senator McConnell can’t have it both ways.
Do tariffs and support for domestic industry help or hurt the American economy? Recent history provides the answer. The U.S. began rapidly reducing tariffs at the suggestion of groups like the Chamber around thirty years ago. Not coincidentally, our trade deficits began growing and now exceed seven hundred billion dollars annually.
Isn’t seven hundred billion dollars the size of the original bank bailout? It is also the bulk of the proposed economic stimulus plan. Perhaps if we had policies that resulted in Americans purchasing and manufacturing an additional seven hundred billion dollars in American goods and services instead of sending this out to other nations, our economy would already be stimulated.
And so bloody what if they want to call it protectionism? Surely governments EXIST to protect their citizens. It’s about time they started doing so again, instead of protecting only greedy transnational grillionaires with no loyalty to anything but their money.
The “Buy America” reference in the “Stimulus” Bill should be removed. Not because it’s wrong, but because there’s actually a better way to grow jobs in the USA. “Buy America” is misleading in that 50 percent of imports from China, for example, are produced by American owned multi nationals. A better approach would be to award tax incentives to American companies, all American companies that produce new jobs within the borders of the USA. The correct slogan should be “New Jobs in America.”
Buy American as in the Stimulus Bill is not protectionism. We have to have trade agreements and honor them as we are in the 21st century and the world has changed drastically. The whole world is in a financial mess and it will take the cooperation of all nations to get us through these times. How did we get here? This is a topic of books, politicians, economists and all of us who have an interest in the welfare of coming generations and mankind. Yes, parents have always wanted their children to have a better life than they. However, some of us may have gone overboard and given our children no incentive to work for what they want and need.
If all the products of “buy American” are already exempt under existing trade agreements, what American products would there be left to protect? The Free Trade agreements already screwed us…..that’s what need’s to be reworked!
The Buy America should not be removed from the so called stimulus bill. To me, Buy American, means made in the USA. All Americans should insist on American made products , all the time. That is the only way that all Americans will become better off. As far as I’m cocerned economic stimulus means stimulating jobs in America. To stimulate our economy , we need good well paying manufacturing jobs. They will pay the taxes neccessary for all the infrastructure building that is needed, plus provide customers for all other businesses in America. Remember none of the foreign made goods pays any wages, or taxes to America, or any of the states and cities..
I would like someone to tell me, what foreign countries would not buy from us. They don’t buy anything of any consequence now. Just go to the sea ports, and see what is coming to America, and what is leaving. If foreign countries were buying anything from us, the steel industry in Baltimore, Pittsburgh, and Bethlehem Pa, and other cities would be booming, and Detroit would not be in a depression, like it is. All the manufacturing plants in Ohio, Ind, Iowa, Md. Pa. etc. would be booming. Just in the area where I live, we have lost many manufacturing companies. We are also losing jobs in the financial credit industry here to India. Young Americans do not know of the wonderful industry and manufacturing that was the finest in the world, and it greatly improved the lives of their parents and grand parents, but we have been on a down hill slide now for 15 or 20 years. If our government doesn’t soon put America, and Americans first, we are just going to continue down hill.
Personally, I know my children, do not have it nearly as well as I did. Their lives are a struggle every day. I had a few lean years when I first married, but I never had to face the problems my children have, and they work very hard.
Bring our jobs back to America
The traditional “Buy America” is not good enough when there is no American made products are available to be had. Being in a sewing related business, most clothes and most sewing supplies are produced in foreign countries because it is cheaper for them to be made & then shipped from another country than producing them here in the U.S. The problem with “Buy America” is, using the traditional “buy American” meaning that is made in America, the American people will not “Buy America” if something is made cheaper in some other country.
The thing to do? either do away with certain governmental taxes & mandatory costs imposed on businesses and/or pull out of the WTO and other world organizations so that import duties can be imposed so that producing goods in the U.S. would be the same or less than producing in foreign countries.
Please excuse this lengthly comment. But the many stories and arguments here reveal that we are all headed for a terrible crisis. There is no “invidivualist” or “survivalist” option. For working people there is no where to go (even if you had enough money). There is no escape from this global economic collapse, and all it’s terrible ramifications. If we are to survive it will be through collective struggle that benefits the vast majority of people in the U.S. and the world. The working people of the world who are the producers of all the food, clothing, shelter etc. that we need to survive. A manifesto perhaps?
1. For many more opinions on the questin of “protectionism” and “war” just GOOGLE: protectionism war that produces many recent articles.
2. I think perhaps several questions are being thrown together and perhaps it is difficult to see what is ultimately in the best interest of workers in this country and world wide.
3. Globalization is first of all CAPITALIST globalization. U.S. capitalists decades ago have moved labor intensive manufacturing overseas because they could not compete against foreign cheap (slave wage) labor. Nor could U.S. companies afford to also pay health care, retirement, “living wages” or “union wages”. Even if it meant paying the transportation costs bringing the finished goods back to the U.S. Thus steel manufacturing, then all kinds of consumer goods manufacturing left the country. The need to maximize profit, the bottom line, decides everything under a capitalist economic system.
4. Corporate capitalism does not care about the social or human conditions of unemployed former employees or humanity or society. In fact, if you work for a corporation your human needs to survive (food, clothing, shelter,health care, etc.at a minimal level) are not considered. You are simply a “HUMAN RESOURCE” and your paycheck comes from the HUMAN RESOURCES DEPARTMENT. Your cost is simply as labor power (physical and mental) is always to be minimized in order to maximize profit.
5. For businesses that are unable to go “international” and are forced to run their business within the borders of the U.S. would tend to favor “Buy America” protectionism. This would help them maximize profit because it would keep out imports against which THEY CANNOT COMPETE!
6. Does this mean that workers employed by protected companies waving the “Buy America” banner are going to start making top wages with union contracts, etc.? No.
7. Why? Because the company is still bound by the laws of capitalism to maximize profit for the owners and shareholders. Thus it will fight tooth and nail to NOT pay the health care, good wages, etc. THAT ARE ESSENTIAL FOR SURVIVAL OF WORKING PEOPLE TODAY. Capitalism today produces vast wealth for a small minority and increasing impoverishment and debt for the rest.
8. Protectionism also means that companies like Wal-Mart, that sells cheap imported products to low-income workers (while also exploiting it’s employees to the max.). will have to raise their prices as the cost of imported goods is pushed up by protectionist walls.
9. Working people today do not live well under capitalism with “free trade” or under “protectionism”. That is the unending game of capitalism that forever pits working people in Mexico or China against each other.
10. Millions of working people from Mexico (where poverty is over 50 percent), have braved the desert, imprisonment and even death to escape unending poverty. Why is Mexico so poor? Because U.S. corporations, some subsidized and operating under the NAFTA treaty, have been allowed to operate profitably in Mexico for decades by keeping wages low and benefits zero. [The richest man in the world (after Warren Buffet) is a Mexican: Carlos Slim Helu $60 Billion, due to privatization of the telecom business.]
11.This vast disparity in wealth is a world wide fact and especially so in the United States today.
12. The most important fact of life to be faced today: That the traditional activity of simple trade unionism must be declared today a total failure under the present economic condition of global capitalism in total collapse. The destruction of the auto workers, despite being organized for decades in the UAW, is the latest tragic symptom of the impotence of simple trade unionism.
13. But most importantly it shows that, despite the best efforts of perhaps the best union, the needs of working people can never be met under this economic system of capitalism. Under globalization today, even with “protectionism”, capitalism cannot be “reformed” (even with EFCA) to behave in a way that supplies the essential needs of working people and at the same time maximizes profit to the owners. An impossible and unresolveable contradiction.
14. Thus in the short term, organized and unorganized working people, must go beyond simple trade unionism. The essential needs of working people are no longer able to be secured from the employer organized with even the best union contract. The needs of working people (single-payer health care, quality public schools, secure Social Security, etc.must be secured through political struggle to end corporate control government at every level. It is now essential that government be controlled “of, by and for” the people’s needs.
15 The struggle to end the corporate control of government (using both Democratic and Republican parties), which pursue the same essential goals: to maximize the wealth of the ruling elite. Thus we have today: war for oil and profit, unchecked global warming, massive social inequality as taxes on the wealthy are minimized, as funding for social services disappears, as trillions of dollars of taxpayer money go into the pockets of bankers, oil company profits, war profiteers, Wall Street manipulators, and multi-national corporations.
15. What can organized labor and working people do? Both short-term and long term strategies are needed. In the short-term:
a. Realize at last the organized labor can no longer be a “business partner” to capitalism. Realize that capitalism is unable to provide for the needs of working people even under the best of circumstances. Today, with the global collapse of capitalism, the capitalist economic system must be transitioned to a socialist ecnomy that functions “of, by and for” the people’s benefit.
b. Maintain existing contracts secured under simple trade unionism where possible, of course. But realize today the impossibility of simple trade unionism to secure essential needs. New organizations, new strategies are needed to secure power over the existing capitalist economy.
b. Break with both Democratic and Republican corporate controlled parties.
Form a new political party that represents the economic needs of all working people.
c. Media (newspapers, tv/radio programs, internet, public forums, etc.) must at last start to educate working people away corporate controlled media and programs. Access to NPR and PBS must be secured to convey the news essential to working people, and end corporate control and indoctrination.
d. Candiates for political office at every level must that support the platform of the new party at local state and federal government.
* End all foreign wars now. Shut down the 700 plus bases. Cut the defense budget by 50%. Audit all military, CIA budgets (that lost 3.2 trillion dollars unaccounted for according to OMB.). etc.
* Nationalize the banking industry. Regulate Wall Street. End the privatization of the Federal government.
* Reinstate the tax cuts, tax loopholes, tax havens offshore, etc. used by the wealthy. Corporations pay no federal income taxes! Re-instate progressive tax rates.
*Nationalize the energy industry (oil, gas, electricity) to end wars for oil,
to maximize efficiency of disappearing resources. Use profits to clean up oil spills and transition to a sustainable energy policies.
* If capitalism is broke, nationalize bankrupt industries (auto, etc.) and socialize their operation, under worker control and management, to produce goods and services needed by millions of people.
* A single-payer health care system that eliminates for-profit corporations from the health care delivery system. Absolutely essential for an economical and workable health care system.
* Free education for all from pre-school through college and into adult life.
End the profitable student loan program that impoverishes graduated students
for the rest of their life.
* End the credit card debt system run by the banks that make massive profits out of interest rates that are impossible for working people.
We the people will then be truely free to live again and create a truely human and humane society in this country and globally.
[Who am I to be spouting all this rubbish? At 67, still working full-time out of necessity, once in the IBEW 1059 Chicago Remington Typewriter Co. Today with the crisis of capitalism descending upon us all, a "born again" socialist.]
It should be “Buy Union” rather than “Buy American”. Unions should support each other across borders and unions everywhere should support union-made products anywhere.
Americans have supported the whole world though most of the last century. We rebuilt the very countries that have taken our industry , and manufacturing, and other professional jobs. We are supporting them now , worse than ever. When do Americans get repaid? Americans fought and died to save many of those countries, and are still fighting and dying.
Just because goods are made by cheap labor in China, and other countries does not mean they are cheaper for Americans to buy. I can remember just a few years ago, I was shopping for a sweater. I found and old reliable American brand . They wer all the same brand, and were identical. Some were made in the USA, some were made in korea, and some were made in China. They were all the same price. They had learned that they could charge the same price for goods made in China, that they could for goods made in the USA.
I wonder, why ,back in the 1950’s when people were making a dollar or two an hour, why you could buy a pair of shoes for 6$ or $8. , and you could buy a pair of jeans for $4 or $5 . The people in China, and India don’t make those kind of wages, and look how much you pay for shoes and jeans today. There is no limit, to what you can pay for a pair of jeans today, and it probably doesn’t cost a penny more to make any of them .
I as an American am willing to buy American made goods,but you can’ty find them. I feel that other Americans would buy also , if it was explained to them how much it would benefit them and all Americans
I for one do not feel it is my duty lower American standards to benefit other countries and mostly wealthy companies.
Thank you
As an example of how not having “Buy American” in the recovery package (and monitoring for adherence) can go horribly wrong just look to the long delayed rebuilding of the San Francisco / Oakland Bay Bridge. Cal Tran (California’s highway dept.) is having the steel panels and beams for the bridge manufactured by a chinese company in China. They are having continuing problems with the welds: the project is encountering continued delays, the possibility of having to spend additional money to re-weld and the potential of having a weakend final structure.
We need to be wary of local and state infrustructure rebuilding plans that send our tax-money to stimulate China’s economy!