Tech Groups Protest Stimulus Protectionism

By Roy Mark  |  Posted 2009-02-05

Tech trade groups are breathing a little easier Feb. 5 after the U.S. Senate approved an amendment to moderate the "Buy American" provisions of the now $900 billion stimulus package. Under a Senate amendment to the bill passed Feb. 4, stimulus funding should be "applied in a manner consistent with United States obligations under international agreements."

The Senate, however, refused to totally eliminate the Buy American provisions. The legislation is still under debate in the Senate so there's no assurance the chamber's protectionists won't ultimately prevail. The Senate legislation will have to be reconciled with the House bill in a conference committee and anything -- behind closed doors -- can happen there.

Since the House passed its stimulus package Jan. 28, tech trade groups have been pressuring lawmakers to water down the protectionism language. Both the House and Senate versions provide billions for broadband rollouts and other IT-related spending, but tech leaders fear the protectionism clauses would prompt retaliations by other countries that are significant buyers of U.S. tech-related goods.

"Our members are among the nation's largest and most important American exporters as well as some of its most innovative companies," Information Technology Association of America President Phil Bond said in a Feb. 4 letter to key congressional leaders. "The markets in which we compete must remain open to global competition if we are to regain the necessary economic growth and prosperity in the United States."

The $819 billion House version calls for all new infrastructure spending to use American-made iron and steel and the original Senate version expanded that protectionism to include a requirement that all "manufactured goods" bought with stimulus funds be American-made.

"The 'Buy American' provisions in both versions of the Recovery and Reinvestment Act, more than anything else, threaten the international cooperation that will be needed to bring about a global recovery," Bond wrote. "It has been noted many times before that this would be the way to turn a recession into a depression."

The CCIA (Computer & Communications Industry Association) also weighed in on the subject of protectionism.

"We saw 'every country for itself' actions during the Great Depression. It didn't help then and it will likely make things even worse now," CCIA President Ed Black said in a Feb. 4 statement. "As part of our longstanding support of free trade, we don't support taking a protectionist stance when buying goods. Government procurement is part of the WTO agreement. U.S. companies have won nondiscriminatory access to supply products for other governments because of these provisions. Keeping that reciprocity is important to the current economy and the economic recovery we are all hoping to see."

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