The White House approves:
Congressional negotiators have come up with the "right compromise" on 'Buy American' provisions of the economic stimulus bill that have raised concern among U.S. trade partners, a White House spokesman said on Thursday.
"I think where we ended up with the Buy America provision is the right compromise that respects the Buy America laws that we've had on our books for many, many years while also ensuring that the language doesn't create unnecessary trade disagreements in a time of economic crisis," White House spokesman Robert Gibbs told reporters aboard Air Force One.
A reaction from Canada:
Canadian officials took cold comfort today as the U.S. government finalized the wording of a provocative Buy American initiative with no last-minute surprises that would awaken further trade-war fears.
Diplomatic sources in Washington early today confirmed that the nearly $800-billion stimulus package will proceed toward President Barack Obama's desk to be signed into law with a provision to steer the money toward American-made products — but not in any way that would violate international agreements.
The clause to uphold trade agreements gives "some comfort" to Canada, said Trade Minister Stockwell Day. But the bill also serves as a reminder that the threat of protectionism must never be taken lightly, he said.
The Canadian paper linked to above quotes the relevant provisions as follows:
SEC. 1605. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS
(a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
(b) Subsection (a) shall not apply in any case or any category of cases in which the head of the Federal department or agency involved finds that
(1) applying subsection (a) would be inconsistent with the public interest;
(2) iron, steel, and the relevant manufactured goods are not produced in the United States if sufficient and reasonably available quantities and of a satisfactory quality; or
(3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent.
(c) If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b) the head of the department or agency shall publish in the Federal Register a detailed written jurisdiction as to why the provision is being waived.
(d) This section shall be applied in a manner consistent with United States obligations under international agreements.
The Joint Explanatory Statement indicates:
Section 1605 provides for the use of American iron, steel, and manufactured goods, except in certain instances. Section 1605 (d) is not intended to repeal by implication the President’s authority under Title III of the Trade Agreements Act of 1979. The conferees anticipate that the Administration will rely on the authority under 19 U.S.C. 2511 (b) to the extent necessary to comply with U.S. obligations under the WTO Agreement on Government Procurement and under US free trade agreements and so that section 1605 will not apply to least developed countries to the same extent that it does not apply to the parties to those international agreements. The conferees also note that waiver authority under section 2511 (b) (2) has not been used.
