By Teamsters General President James P. Hoffa
Published in the Detroit News, July 9, 2014
Millions of Michiganians joined in on the celebration of the 238th birthday of this great nation last week. But while we honored U.S. independence, a proposed 12-nation Pacific Rim trade deal could take away the federal government’s ability to enforce a law allowing it to favor American companies when purchasing goods.
The “Buy American” procurement program has been on the books for more than 80 years. But it has become a target, thanks to the Trans-Pacific Partnership deal being negotiated. The pact would remove the ability of the U.S. to prioritize companies located in this country when making government purchases.
As it stands, Michigan’s taxpayers finance federal government purchases to the tune of some $13.4 billion annually, a new report by Public Citizen finds. That’s an estimated $1,851 that every state taxpayer sends each year to Washington to procure goods. Much of that money is funneled back into American jobs thanks to Buy American. But the TPP would allow foreign companies to compete for the tax dollars of Michigan residents.
Under the trade agreement, the U.S. government would be required to grant all firms operating in any TPP country the same access as American companies to federal government procurement contracts over a certain value. The ban on preferential treatment for U.S. firms on obtaining government contracts would result in the off-shoring of hundreds of millions in tax dollars now recycled into the U.S. economy.
While some might suggest that American companies will make up for any such losses through increased trading with other Pacific Rim nations, that is not likely. The U.S. federal procurement market is more than 10 times larger than all the other prospective procurement markets combined. So in essence, the U.S. would be trading preferential access to the $556 billion U.S. federal government procurement market in exchange for just $53 billion worth of new national procurement markets overseas. That seems like a bum deal.
The TPP would allow Chinese-government-owned firms in Vietnam to undercut American businesses in order to gain U.S. government business. They can do that because the average minimum wage salary in Vietnam is 52 cents an hour. But does it make sense to allow such Communist-owned companies to handle work dealing with, for instance, U.S. national security? Hell no!
Luckily, there are some Michigan-elected officials in Congress who agree with that assessment. Rep. Gary Peters, D-Bloomfield Township, for example, is a strong supporter of the Buy American program. The 2014 Senate nominee supports language included in a bill funding trade agencies approved in late May that would bar the U.S. Trade representative from negotiating trade agreements that would further open up the U.S. government procurement market to other countries.
And while the Senate has yet to take up that legislation, Sen. Debbie Stabenow, D-Lansing, has also shown she is willing to stand up for American manufacturing. She has reintroduced the “Bring Jobs Home Act” that would give tax breaks to businesses that bring back jobs to the U.S. from overseas. The bill is due to be taken up on the Senate floor soon.
America became the world power that it is today by taking tough stands. Congress needs to assert U.S. independence now by standing firm against this TPP provision and allowing the Buy American program to flourish.