‘Buy American’ Stands in Way of Free Trade

A large 'Buy American' sign, in support of Detroit's auto industry, is seen in the back of an auto scrap yard in Detroit, Michigan May 18, 2009. Chrysler's bankruptcy proceedings show the possibility of an orderly restructuring of a major U.S. carmaker and could be a model for General Motors, the White House said on May 29, 2009. GM is expected to file for Chapter 11 protection by June 1, 2009 and President Barack Obama will likely discuss the next steps in its reorganization at that time. Picture taken May 18, 2009. REUTERS/Rebecca Cook (UNITED STATES TRANSPORT BUSINESS EMPLOYMENT)
A large "Buy American" sign, in support of Detroit's auto industry.
  • Why it matters

    Why it matters

    E.U. firms have access to barely one-third of the U.S. procurement market, which recently amounted to just under €180 billion, or about $204 billion.

  • Facts


    • The “Buy American” clause dates to the Great Depression and requires public administrations to give preference to U.S. companies when awarding contracts.
    • In an election year when anger is targeting the political establishment, the government will do anything to avoid criticism of throwing U.S. taxpayer money at foreign corporations.
    • The head of U.S.-based Dow Chemical criticized restrictions in accessing government contracts as one of the “greatest barriers to free trade.”
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The United States is the partner country at this year’s Hanover Messe and it is presenting itself as the land of unlimited investment opportunities.

“Select USA” has been the slogan it is using this week to promote itself as an industrial location. It is also intended as a strategy to breathe new life into difficult free trade talks with Europe.

But there is also another America — one that hides behind protectionist regulations and makes it tough for European companies to gain access to public contracts.

“Buy American” is the nationalistic counterpart to the more liberal-minded “Select USA.” Despite attempts by U.S. President Barack Obama and German Chancellor Angela Merkel to save the Transatlantic Trade and Investment Partnership known as TTIP, the dispute over the U.S. government procurement market could doom their efforts.

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