Wednesday, June 3, 2009

'Buy America' provisions doing damage Chamber warned about

An editorial in today's New York Times highlighted the negative impact on job creation of the 'Buy America' provisions inserted by Congress into the economic stimulus package.

The Times references a study conducted earlier this year which "estimated that “Buy American” provisions could “save” 9,000 American jobs — a tiny number compared with the 650,000 jobs supported by foreign government procurement of American exports."

At the same time, foreign governments are beginning to retaliate, "representatives of Australia, Brazil, Canada, the European Union, Japan and Mexico have been consulting about how to respond to the United States’ protectionist drive. After Canadian companies were barred from bidding for American business, news reports say that some 12 Canadian cities passed ordinances against buying American."

Greater Boston Chamber of Commerce CEO Paul Guzzi warned about the potential ramifications of this proposal in a Boston Globe op-ed in February.

Guzzi argued: "In Massachusetts alone, merchandise exports in 2007 accounted for $25.4 billion, with more than 28 percent of all manufacturing workers in the state dependent upon exports for their jobs. And Massachusetts exports continue to grow briskly, climbing 35 percent between 2003 and 2007. Export centers are spread throughout the state, and provide much-needed jobs not only to Greater Boston, but to Pittsfield, Worcester, New Bedford, and Fall River. The decline in exports that could result from an era of economic protectionism could have dramatic repercussions for blue-collar workers here, who are already struggling to maintain their jobs."

As the Times editorial board makes clear, job cuts related to 'Buy America' are already taking a toll on our economy and outweighing the benefits of the provision.

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