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AFL-CIO Now

Trans-Pacific Trade Pact Could Close Doors on 'Buy American'

One of the lesser known facts about free trade agreements (FTAs) between the United States and other nations is that they open the door for foreign corporations and manufacturers to bid on big government projects and services. A Transpacific Partnership Agreement (TPP)—an FTA with the U.S. and eight Pacific Rim nations that is being negotiated now—could throw those doors open even further.

Even when government projects are specifically designed to boost U.S. job creation, such as many of the efforts under the American Recovery and Reinvestment Act, government procurement rules in FTAs allow foreign firms to compete against U.S. companies in certain circumstances.

Most of us would assume that those projects—from buildings and computers to certain security gear—would fall under the banner of Buy American regulations. But under government procurement provisions in FTAs and World Trade Organization (WTO) trade rules, foreign manufacturers are allowed to bid for many of those projects against U.S. firms employing American workers.

As part of putting the Colombia FTA into force, the federal government announced it would amend its procurement rules to allow Colombian-made products and supplies to be used for purchases made by the Departments of Education, Homeland Security, Veterans Affairs, and many others. Unfortunately, given the inability of the Colombian government to protect the basic rights of its workers, it is all too likely that the products purchased will be made by workers who face enormous challenges when they attempt to join unions, engage in collective bargaining, or otherwise engage in collective action to try improve their wages and working conditions.

As the TPP talks move forward, the AFL-CIO is strongly urging the Obama administration to make sure “Buy American” means just that.  The U.S. should protect its current “carve outs” for Buy American and create a new one to ensure that any purchasing that occurs under economic
recovery/stimulus projects actually stimulates our own economy.

Click here to read more about the TPP.

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