With the holidays quickly approaching, it’s time to once again think about buying American. But working Americans aren’t the only ones who should be considering whether to help America’s workers. So should the American government. 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.
The TPP would allow foreign companies to compete for the tax dollars of Americans. 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 suggest that American companies will make up for any such losses through increased trading with other Pacific Rim nations, the same promises were made with other bad trade deals like NAFTA. Further, 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 is 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!
And while the Senate has yet to take up that legislation, Sen. Debbie Stabenow (D-MI) 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.