Buying American: A Dangerous Precedent

Published in Sina
(China) on 16 February 2009
by Cheng Yunjie and Xu Xingtang (link to originallink to original)
Translated from by Ming Li. Edited by Bridgette Blight.
When U.S. President Barack Obama signed a giant economic stimulus package that included “Buy American” provisions, he was setting a dangerous precedent for the world. International trade will probably be degraded thanks to a sharp rise in trade protectionism. The world economy will face the threat of a worse recession.

Trade protectionism started to rear its head in developed countries when governments of the world were seeking fair measures to save their economies. Quality standards and antidumping laws create trade barriers. Among these restrictions, the “Buy American” policy clearly brings protectionism to the forefront.

The final “Buy American” clause was changed a little from its initial version as “applied in a manner consistent with United States obligations under international agreements” was added, while insistence on the use of American-made iron and steel for public works projects funded by the stimulus plan remained. This change in words shows that the congressmen had some reservations about potential retaliation from America’s trade partners as they planned to protect the American manufacturing sector.

Since the subprime crisis in the real estate market, “deglobalization” has posed a heavy threat to the world economy. To maximize the output from spending to stimulate domestic economies and keep job opportunities at home, many governments are showing that they don’t trust their “neighbors” and just care about their own businesses. The Obama administration’s invocation of the 1933 Buy American Act as an example of home-made products purchased to stimulate the home economy is undoubtedly a “bad lead” that others might follow.

This means that the U.S. government, as the leader of the largest economy and a long-term propeller of free trade, is insincere in its efforts with the rest of the world to deal with this unprecedented financial crisis. The allusion to the Buy American Act also shows that maximizing national interest from international trade is the U.S. government’s most important goal, while it has been actively participating in making the rules of international trade.

When the subprime crisis in Wall Street became corporate and consumer credit crises, unemployment, economic slide, investment shortages and falling confidence became the shared challenges of global economies. Although the U.S. economy was hard-hit in this crisis, it still has a strong influence on the global economy and has a great capacity . Many countries have worse economic situations than the U.S.

Following the U.S.’s announcement last December that it was in recession, many countries including Japan, Germany, the U.K., Italy and Spain, admitted that they are in recession as their economies have been contracting in two consecutive quarters. More are lingering at the brink of bust. Just as the U.S. congressmen were debating the “Buy American” clause, loud calls for “employing locals only, buying home-made products only, prohibiting manufacturers from moving overseas and levying high tariffs upon foreign goods” were heard in the Euro zone.

A communiqué by G-7 finance ministers, including the U.S. Secretary of the Treasury, Timothy Geithner, announced an effort to prevent trade protectionism at the Rome Summit that was concluded on Feb. 14, but we still worry that more governments will follow the U.S. government to improve their political standing at home at the expense of international trade, once they see job creation and economic growth as their overwhelming priorities.

It is unnecessary to repeat the damage done by the Smoot-Hawley Tariff Act adopted in 1930s, when the U.S. congress started a trade war by imposing high tariffs upon over 20,000 import goods. The consequent retaliation by European countries caused stagnation of global trade and sharply reduced production.

Economic globalization today has made international trade an increasingly important contributor to the world economy. Trade protectionism will cause vast and profound damage. Embedding the Buy American clause in the economic stimulus plan is purely a stopgap with “no benefit to the U.S. but harm to others”, because it will certainly curb the innovation and competitive ability of domestic industries, and hurt the interests of American consumers and importers while protecting American companies and job markets. Also, it becomes harder to define a “local company” and “home-made goods” as liberalization of trade and investment causes a global reallocation of production resources, which will somewhat reduce the impact of the economic stimulus plan.

In contrast, China, which is also suffering in the current financial crisis, is open-mindedly joining in remedial global action. China’s 4 trillion Yuan stimulus package has no “Buy Chinese” clause and its policy of “Home Appliances to the Countryside”, supported by government funds, rejects no foreign brand. Household electrical appliances made by Panasonic, Nokia, Siemens and other foreign brands that are sold in China’s rural areas will benefit from fiscal subsidies worth 13 percent of their prices.

No country can evade the crisis. The world economy can pull through the recession only with international cooperation and the development of a multilateral trade system, and this fact is even more important for a great country with global economic influence.


购买美国货条款:一个危险的先例
   程云杰 徐兴堂

当美国总统奥巴马签署包含“购买美国货”条款的巨额经济刺激计划时,他将为世界制造一个危险的先例,国际贸易环境很可能会因为贸易保护主义的迅速抬头而急剧恶化,并导致世界经济面临更加严峻的衰退威胁。

  在各国政府寻求一切合理手段拯救经济的时候,贸易保护主义的幽灵率先在发达国家开始游荡。利用产品质量标准、反倾销等手段构筑贸易壁垒的举动日趋增多,而“购买美国货”条款则赤裸裸地把贸易保护主义推向前台。

  与最初版本相比,最终确定的“购买美国货”条款立场有所转化,除坚持经济刺激计划基金支持的公共工程项目所使用的钢材和其他制成品必须国产外,还增加了“必须符合美国国际贸易承诺”的字样。这一措辞上的改变表明:美国会议员既希望为本国制造业提供保护,又对引发主要贸易伙伴的报复有所顾忌。

  自美国房地产市场爆发次贷危机至今,“去全球化”已成为世界经济面临的一个重大威胁。为了保证政府支出最大限度刺激本国经济发展,把就业机会留在国内,“以邻为壑”与“自扫门前雪”的倾向正在政府间扩散。奥巴马政府援引1933年的《购买美国货》法案在实施经济振兴计划时做出只买国货限制的例子,无疑为世界开了一个“坏头”。

  这意味着在这场前所未有的金融危机面前,作为全球最大经济体的领导者、自由贸易长期推动者的美国政府缺乏与世界共渡难关的诚意。对《购买美国货》法案的运用也表明美国政府在长期积极参与国际贸易规则制定的过程中,最重要的目标还是从国际贸易中获取最大的国家利益。

  当华尔街次贷危机转化为企业和消费信贷危机,失业、经济下滑、投资不足与信心下降已成为全球经济面临的共同挑战。尽管美国经济在危机中遭受重创,它的全球经济影响力和经济实力依然强大。相比之下,还有很多国家面临着更为严峻的经济形势。

  继美国去年12月宣布经济陷入衰退之后,已有包括日本、德国、英国、意大利和西班牙在内的多个国家因经济连续两季度下滑而进入衰退,还有更多国家的经济徘徊在衰退的边缘。就在美国国会议员围绕“购买美国货条款”进行争论时,欧元区内“只雇本国人,只买本国货,不许工厂外迁,向外国货物征收高额关税”的呼声已经甚嚣尘上。

  虽然包括美国财长盖特纳在内的西方七国财长在14日闭幕的罗马峰会上发表公报,表示将致力于避免贸易保护主义,但是我们有理由担心,一旦把推动就业和刺激经济增长视为压倒性任务,更多国家的政府会追随美国以不惜导致国际贸易环境恶化为代价来提升自身的政绩。

  上世纪30年代大萧条时期,出台《斯姆特――霍利关税法》的危害已经毋庸赘述了。美国国会当时对两万多种进口商品征收高关税,率先挑起了贸易战,欧洲国家随后的报复措施导致全球贸易限于停滞,工业生产严重萎缩。

  时至今日,随着经济全球化的推进,国际贸易对世界经济的贡献率已大大增强,贸易保护的破坏力不仅在地域上更广,而且影响会更为深远。在经济振兴计划中嵌入购买国货的条款纯属权宜之计,是典型的“损人不利己”,因为它在保护国内企业和就业的同时势必会抑制国内产业的创新和长远竞争力,伤害国内普通消费者和进口商的利益。再者,由于贸易和投资自由化促使生产资源在全球范围内配置,界定“本土企业”和“国货”将变得更加困难,这将在一定程度上损害一国经济振兴计划的实施效益。

  相比之下,深受金融危机之害的中国却以开放的心态加入到全球救市行动中。它的4万亿元注资方案不包含“购买中国货”条款,以政府资金补贴的“家电下乡”也没有排斥外资品牌,松下、诺基亚、西门子等外资品牌销售到农村的家电,都将享受中国政府13%的财政补贴。

  面对危机,没有一个国家能够独善其身。只有坚持合作和开放,深化国际经贸合作,推进多边贸易体制的发展,世界经济才能有可能尽早走出衰退的阴影。对于具有全球影响力的经济大国而言,这种态度和远见就更为关键。
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