Source: Xinhua

02-17-2009 10:00

Special Report:   Global Financial Crisis

BEIJING, Feb. 16 (Xinhua) -- The mammoth 787-billion-U.S. dollar stimulus package was finally passed by the U.S. Congress last Friday, a crucial step forward in Washington's ambition to revive the faltering economy.

The asserted benefit of the bill, however, was overshadowed by the "Buy American" provisions it included, which barred the use of foreign iron, steel, and manufactured goods in public works projects funded by the plan. The clause easily invited deep concern outside and inside the United States, raising fears of a recurring of protectionism.

"Buy American" has become particularly sensitive in a time that the world is facing sagging economy and slumping trade, echoing the Great Depression in the 1930s when a wave of tit-for-tat protectionism choked global trade and prolonged the economic pain.


The United States has alleged that the implementation of the bill will strictly abide by its international trade obligations. Analysts pointed out that according to the international government procurement agreement, Canada, the European Union (EU),Japan and a few other countries might be exempted from the provisions. Even so, potential protectionism embedded in the provisions still touched the nerves of these nations and blocs.

Canada, with about 40 percent of its steel export going to its southern neighbor the U.S., has repeatedly expressed its deep concern.

The country's Prime Minister Stephen Harper said on Feb. 3 that the clause could contravene the North American Free Trade Agreement (NAFTA) and backtrack on Washington's "international obligations" to break down global trade barriers.