Trade Deal Procurement Rules Level the Playing Field

Brian Lombardozzi Vice President for State Governmental Affairs , AAM

According to a recent PoliticoPro article, "New NAFTA deal partly channels Trump’s ‘Buy American’ pledge", the U.S.-Mexico-Canada Agreement (USMCA) “would put a patchwork of different systems in place, making it harder for some businesses to sort out how to fulfill the work they will do for the government.”

The deal includes procurement rules only for trade between the United States and Mexico, reporter Doug Palmer notes. World Trade Organization (WTO) procurement rules will cover such trade between the U.S. and Canada, and Trans-Pacific Partnership (TPP) rules will cover such trade between Mexico and Canada. 

A little convoluted? Maybe, I guess, but only out of context; trade agreements are always textbook-thick, and similarly complicated. Confusing or not, the fact remains: The U.S. economy and its government procurement market are among the most open in the world. Some insist that “Buy America” preferences in taxpayer-financed government spending are “protectionist” policies that lead the United States to the precipice of an international trade war. But the opposite is true: Buy America preferences are an important (and legitimate) lever to open foreign procurement markets for U.S. products.

Buy America is a longstanding practice by the federal government, as well as many state governments, and it is well-understood by contracting officers and bidders on public projects. Dozens of states have similar laws that create a procurement preference for American-made goods when they are available in a sufficient quality and quantity and are competitively priced in the global marketplace. For example, New York and Texas just passed bills requiring American-made iron and steel for certain projects including transportation and water infrastructure. If goods are unavailable from domestic sources or the cost of the goods from domestic sources is unreasonable, the preference may be waived. And yet the sky hasn’t fallen.

Criticism of Buy America laws often falsely portrays other nations’ markets as largely unfettered while they are not. The EU and Canada – as well as all other parties to the WTO General Procurement Agreement (GPA) – have broadly excluded many of their procurement markets from the GPA. These exclusions go substantially further than those claimed by the United States. And those parties are under no obligation to provide U.S. firms with access to a wide array of their government contracts.

The general rule under international law permits WTO members to favor their respective domestic suppliers over foreign suppliers of goods and services in government procurements. And they do; annual reports by the United States Trade Representative reveal that many of our trading partners currently maintain a variety of governmental procurement restrictions that exclude the products and services of U.S. manufacturers. However, each country (to the extent it chooses to depart from the WTO’s general rule) is free to commit itself by international agreement to treat foreign suppliers no less favorably than it treats its own domestic suppliers. 

Despite these agreements, U.S. courts have recognized that states are permitted to impose domestic preferences where they are acting as market participants in government contracting.  Simply put: States are free to require domestic preferences in their contracting and do not violate any obligations made under international agreements – even those dealing with government procurement. 

That’s a good thing. When domestic content requirements are applied, procurement officials ensure that U.S. environmental and labor standards are not just a burden to U.S business looking to compete in a global economy, but rather a standard for doing business with the globe’s biggest customer. Locking in these standards up front can also save costs, as demonstrated by the San Francisco-Oakland Bay Bridge which came in twelve years late and $3.9 billion over budget due to faulty construction using Chinese steel.

Tax and toll dollars should not be used to reward companies who have moved their operations, investments and jobs to foreign countries, or to reward foreign producers that completely disregard environmental and workplace safety standards. 

When American governments choose to regulate the way American manufacturers do business and then choose to spend taxpayer dollars on goods produced abroad, it discourages American production and investment, encourages outsourcing and kills American jobs.

In short: Government procurement has been governed by a patchwork of international trade agreements for decades. The new USMCA, if ratified, still allows U.S. manufacturers to compete on a level playing field with international competition for the tax-payer financed markets where Buy America applies. Just as our trading partners have assured their own manufacturers are treated in their own markets.


Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work