Stimulus Bill Includes Buy American Provision

Many concerns from U.S. trade partners and U.S. business groups have arisen after the Senate's approval of the Buy American Provision, a provision included in the economic stimulus bill.

The Buy American Provision imposes a general requirement that any public building or public project funded by the new stimulus package use only iron, steel and other manufactured goods produced in the United States. The stimulus package includes about $48 billion in transportation projects, roughly $30 billion in infrastructure improvements and additional spending that could be covered by the Buy American Provision.

After President Obama's public announcement of this Provision, U.S. trade partners debated on whether the policy was legal under the World Trade Organization's government procurement agreement, the North American Free Trade Agreement and other U.S. free trade treaties. On response to this discussion, the bill stipulates under its trade pact commitment clause that the Provision will be "applied in a manner consistent with the U.S. obligations under international agreements."

SSupporters of the bill comment that this is a great incentive for U.S. manufacturers for expansion as well as increasing job opportunities for American citizens. Others against the Provision have declared that this measure will increase the overall cost of projects as well as increasing bureaucracy, which in the end will compromise the development of infrastructure in the country.

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