Possible Trade Law Violations in Biden's America Jobs Plan
Steve Charnovitz
31 March 2021
The White House has released a description of the Biden Administration's new infrastructure plan and, as expected, the plan contains several domestic content programs that may violate US obligations under the World Trade Organization treaty:
- "The plan will require that goods and materials are made in America and shipped on U.S.-flag, U.S.-crewed vessels."
- The plan "will use more sustainable and innovative materials, including cleaner steel and cement, and component parts Made in America and shipped on U.S.-flag vessels with American crews under U.S. laws."
- Biden "is asking Congress to include a commitment to increasing American jobs through Buy America and Ship American provisions."
- Biden's plan contains: "a $174 billion investment to win the EV market. His plan will enable automakers to spur domestic supply chains from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and EVs. It will give consumers point of sale rebates and tax incentives to buy American-made EVs while ensuring that these vehicles are affordable for all families and manufactured by workers with good jobs."
- Biden calls for $50 billion in spending under the CHIPS Act which became law in early 2021.CHIPS stands for "Creating Helpful Incentives to Produce Semiconductors for America," a title that itself points to sector-specific federal subsidies for manufacturing that can be expected to be (if not calculated to be) trade distorting. In addition, a provision for advanced microelectronics R&D contains what is termed "domestic production requirements."
To be sure, the WTO allows governments to restrict federal procurement spending to domestic content sources, subject to commitments to trading partners made in the Agreement on Government Procurement. The information released today by the White House is too vague to ascertain whether any of the newly proposed programs might be government purchases exempt from the SCM Agreement and consistent with U.S. obligations under the Procurement Agreement.
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