Washington, DC – Congresswoman Donna F. Edwards (MD-4) and Congressman Nick Rahall (WV-3), Ranking Member of the House Transportation and Infrastructure Committee, led 69 Members of Congress in a letter urging President Obama to protect “Buy American” policies in the Trans-Pacific Partnership (TPP) agreement. The 12th round of negotiations for the TPP are set to begin Tuesday, May 8th, between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam.
Under the proposed framework, individual states and the federal government would be obligated to bring existing and future domestic policies into compliance with norms set forth in 26 proposed TPP chapters. This would include procurement rules that require signatory countries to provide equal access to foreign firms in bidding for domestic government procurement contracts. The U.S. would be required to waive Buy American preferences if such rules were included in a final TPP agreement, which reinvest tax dollars in the domestic economy by directing government expenditures for purchase of goods and services to domestic companies. The letter encourages President Obama not to trade away Buy American provisions in the TPP. The full text of the letter is below.
“We must buy American to build America, and government procurement policy is no exception,” said Congresswoman Edwards. “We are focused on creating jobs and revitalizing our manufacturing base, and our trade agreements must not take away this important policy tool. Since 1933, Buy American policies have helped invest large sums of U.S tax dollars to create jobs, grow our economy, and strengthen domestic manufacturing. That is why my 68 colleagues and I urge President Obama to ensure that this trade pact does not limit our rights to spend U.S. tax dollars on U.S. goods and services. Let’s continue to use government procurement to support our manufacturing sector and create good, high-wage American jobs.”
“American innovation is once again fueling our nation’s manufacturing base. The American taxpayer has invested mightily in education, research and development to drive innovative manufacturing. We have waivered goodbye to too many good American jobs through trade agreements signed on a tilted table somebody cleverly decided to name, ‘free trade.’ The American taxpayer and worker deserve a fair shot at the global marketplace. While trading partners may initially have concerns about fair trade, a vibrant marketplace supported by American ingenuity and hard work will lift all economies. It’s time we stood our ground for this basic American value.” – U.S. Rep. Nick Rahall
The Honorable Barack Obama
President of the United States
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear President Obama,
We write in strong support of Buy American procurement policies, including the various federal programs that have been in place since the enactment of the Buy American Act in 1933 and passage by many states of similar preference policies. We are concerned about proposals we understand are under consideration in the Trans-Pacific Partnership (TPP) agreement negotiations that could significantly limit Buy American provisions and as a result adversely impact American jobs, workers, and manufacturers.
Under the proposed TPP framework, individual states and the federal government would be obligated to bring existing and future domestic policies into compliance with norms set forth in 26 proposed TPP chapters, including one covering government procurement policy. Failure to conform our domestic policies to these terms would subject the United States (U.S.) government to lawsuits before international dispute resolution tribunals empowered to authorize trade sanctions against the U.S. until our policies are changed.
In the past, U.S. Free Trade Agreements (FTA) required that all firms operating in a signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold. To implement this “national treatment” requirement, the U.S. waived Buy American procurement policies for firms operating in FTA-signatory countries. Effectively, in exchange for opportunities for some U.S. firms to bid on contracts in smaller foreign procurement markets, we traded away an important policy tool that can ensure that billions in U.S. government expenditures are recycled into our economy to create jobs, strengthen our manufacturing sector, and foster our own new cutting-edge industries.
We do not believe this approach is in the best interest of U.S. manufacturers and U.S. workers. Of special concern is the prospect that firms established in TPP countries, such as the many Chinese firms in Vietnam, could obtain waivers from Buy American policies. This could result in large sums of U.S. tax dollars being invested to strengthen other countries’ manufacturing sectors, rather than our own. At a time when U.S. manufacturing only employs 11.71 million people, a 40% decline from its peak in 1979 and the lowest since 1941, we simply cannot allow this to happen.
As you know, procurement policy established in trade agreements cannot be later modified without consent of all signatory countries. This would deprive Congress and U.S. state legislatures of their authority to modify procurement policies despite fundamentally changed national or international circumstances. Therefore, we are writing to inquire about U.S. negotiators’ procurement proposals for the TPP and to encourage your Administration not to provide “national treatment” for U.S. government procurement. This matter is of considerable urgency given the stated goal of completing these talks this summer and the special TPP intercessional negotiations on procurement held early last month.
While we may have different views on other aspects of the prospective TPP, we are united in our belief that American trade agreements should not limit the ability of Congress and U.S. state legislatures to determine what procurement policies are in our national interest. Thank you for your consideration of our views, and we look forward to your response on this important matter.
Donna F. Edwards Nick J. Rahall, II
Member of Congress Member of Congress