Will "buy American" policies bring us the next great depression?

The Alliance for American Manufacturing held a conference call today addressing concerns about whether 'buy American' provisions in the bloated stimulus bill making its way through Congress could lead to the next Great Depression. The reason for this concern is that trade protectionism is one of the factors that lead to the Great Depression in the 1930s, according to historians. One country erected trade barriers back then because they didn't want to 'export jobs,' and other countries followed suit. Pretty soon, nobody was selling anything to anybody.

The AAM's call was illuminating on several points. They say there are already 'buy American' provisions on the books, and there are similar policies in place in other countries. They also say the provisions in the recently passed House bill "are fully consistent with existing U.S. trade obligations and can help to strengthen the U.S. economy and create jobs."

One other bit from the Alliance:

The U.S. has been a leading party in reaching broad international procurement agreements, has adhered to all related obligations, and has set a strong example of sourcing materials globally for its domestic governmental projects. By contrast, other countries have held themselves out of the reform movement and have instead opted to promote their own manufacturing base through closed self-procurement programs. A good example is China, which, in addition to a recent $586 billion stimulus program, continues to subsidize its own producers via deliberate (and illegal) currency undervaluation. Until countries like China make the same commitments, and sign-on to internationally accepted procurement agreements, the U.S. will accomplish nothing by making yet more unilateral concessions.

You can view their Web site here:

www.americanmanufacturing.org

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