Sunday, February 15, 2009

CEA Warns That ‘Buy American’ Provisions in Economic Stimulus Package Will Hurt U.S. Economy

(BUSINESS WIRE)--The Consumer Electronics Association (CEA)® today expressed deep disappointment that the U.S. Congress agreed to keep the “Buy American” provisions in the economic stimulus package poised for final passage and President Barack Obama's signature. These provisions would require use of U.S. iron, steel, and manufactured goods in public works projects funded by the stimulus bill, H.R. 1, The American Recovery and Reinvestment Act of 2009.

CEA President and CEO Gary Shapiro issued the following statement in response to the “Buy American” provisions included in the final bill:

“The ‘Buy American’ provisions in the stimulus bill will signal to our trading partners around the world that the United States is returning to the bad old days of protectionism and economic nationalism. Rather than stimulate the American economy, these provisions will lead to retaliation from abroad and cost precious jobs in the United States.*

“The promise that the ‘Buy American’ provisions keep with the letter of World Trade Organization commitments is a meaningless gesture - it contradicts recent statements by both President Obama and G-20 leaders to avoid protectionism, which exacerbate the global economic crisis.

“The lessons of Smoot-Hawley and the Great Depression are clear - if we close our borders to international trade and artificially prop up our own industries, we deepen the global recession and further make ourselves vulnerable to a trade war.”

*The Peterson Institute for International Economics, a nonpartisan think tank, estimated that the "Buy American" provisions could cost as many as 65,000 U.S. jobs, far outweighing the number of jobs that would be created. (“Buy American: Bad for Jobs, Worse for Reputation,” Peterson Institute, February 2009)

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