Companies Fight “Buy American” Rule

General Electric and Caterpillar are among the U.S. exporters wanting to persuade congressional Democrats to drop “Buy American” provisions from the $US825 billion stimulus legislation, Bloomberg news reports. Buy American requirements, which restrict the use of government funds to U.S.-made products, date back in some form to the Great Depression. A number of trade agreements have limited their applicability, providing exceptions for small projects, steep price differentials or product availability.

The companies, backed by the U.S. Chamber of Commerce, said the proposal to limit spending in the stimulus plan to American-made products risk igniting retaliation from other countries.

The chamber, the Emergency Committee for American Trade in Washington and other business groups recently sent a letter to congressional leaders arguing against the provisions. In an amendment approved by the House Appropriations Committee, lawmakers voted to stipulate that none of the stimulus funds can be used “unless all of the iron and steel used in the project is produced in the United States.”