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Thread: "Buy American"-Trade Wars beginning?

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    Default "Buy American"-Trade Wars beginning?

    Trade Wars Brewing In Economic Malaise

    Outrage in Canada as U.S. Firms Sever Ties To Obey Stimulus Rules

    Friday, May 15, 2009
    "Is this what the first trade war of the global economic crisis looks like?
    Ordered by Congress to "buy American" when spending money from the $787 billion stimulus package, the town of Peru, Ind., stunned its Canadian supplier by rejecting sewage pumps made outside of Toronto. After a Navy official spotted Canadian pipe fittings in a construction project at Camp Pendleton, Calif., they were hauled out of the ground and replaced with American versions. In recent weeks, other Canadian manufacturers doing business with U.S. state and local governments say they have been besieged with requests to sign affidavits pledging that they will only supply materials made in the USA.
    Outrage spread in Canada, with the Toronto Star last week bemoaning "a plague of protectionist measures in the U.S." and Canadian companies openly fretting about having to shift jobs to the United States to meet made-in-the-USA requirements. This week, the Canadians fired back. A number of Ontario towns, with a collective population of nearly 500,000, retaliated with measures effectively barring U.S. companies from their municipal contracts -- the first shot in a larger campaign that could shut U.S. companies out of billions of dollars worth of Canadian projects.
    This is not your father's trade war, a tit-for-tat over champagne or cheese. With countries worldwide desperately trying to keep and create jobs in the midst of a global recession, the spat between the United States and its normally friendly northern neighbor underscores what is emerging as the biggest threat to open commerce during the economic crisis. [more...]
    http://www.washingtonpost.com/wp-dyn...l?hpid=topnews
    Last edited by hessian; 05-18-2009 at 01:16 PM. Reason: title
    "That's as good as money sir, those are I.O.U.'s" - from: Dumb & Dumber


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    Default Re: "Buy American"-Trade Wars beginning?

    Quote Originally Posted by hessian View Post
    Trade Wars Brewing In Economic Malaise

    Outrage in Canada as U.S. Firms Sever Ties To Obey Stimulus Rules

    Friday, May 15, 2009
    "Is this what the first trade war of the global economic crisis looks like?
    ...s



    You tell me.

    Which country will be hit with a harder economic hardship if a trade war brews up....?

    The Americans? Who will lose out on possible contracts for 500,000 Canadian public works projects, like city sewer systems?



    Or the Canadians- who stand to lose an export market to 300,000,000 people for one of their chief export products?

    Attachment 6342

    I think we all know which side would suffer the economic consequences of a new trade war.....





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    Default Re: "Buy American"-Trade Wars beginning?

    Where are those ringing the capitalist bell when it comes time to buy local or buy American?

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    Default Re: "Buy American"-Trade Wars beginning?

    Not sure what you are asking, Chem. Location of manufacturing, whether or not the country in question is a signatory of the GATT government procurement agreement (Canada is..btw China is NOT), whether this is part of an allocation to a U.S. State and possiby considered State and not federal money and whether this is considered a military contract (military is different) are all considerations here that are NOT made clear in the article. I am not familiar with the small print in the Government Procurement Agreement, it may be that we can't be predjudiced against a Canadian company but CAN require U.S. manufactured content. Or this could be State money. Or this could be a military contract. Or, or....

    If there really is a violation here of the GATT Government Procurement Agreement, Canada can file a complaint at GATT. Ditto for NAFTA, but nothing here says we are being accused of breaking provisions of either. So far it looks like a tit for tat between States and Provinces with a possible military consideration here, which means this civie/Fed (not State) pulls out her 10 foot pole if asked whether the U.S. is doing something wrong, or Canada is simply whining about not getting a contract.

    That's why I read it and shrugged...it tells me nothing that I can work with. Plus, I haven't heard any one else grumbling except China, and as I said above they aren't even signatories of the GATT Government procurement Agreement.
    Last edited by Silverbird; 05-19-2009 at 08:28 AM.
    "All the prophets of Doom, Can always find room, In a world full of worry and fear..." - Protest Song, Monty Python

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    Default Re: "Buy American"-Trade Wars beginning?

    Silverbird, you explain the nuances of possibility so well, thanks!
    "life can only be understood backwards, but it must be lived forwards" - soren kierkegaard

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    Default Re: "Buy American"-Trade Wars beginning?

    Average wage of a Chinese Auto Worker: $1.69 an hour.

    Average wage of a Mexican Auto Worker: $3.64 an hour.

    Average wage of a U.S. Auto Worker: $21.00 an hour. *(was $27 before the latest round of concessions).

    It's still going to be difficult going in the years ahead.

    Looks like China is now after the U.S. SUV market- take a look at this:

    http://www.consumeraffairs.com/news0...inese_suv.html


    It's hard to compete when third world countries undercut your costs with average wages so low their own people can't buy any products.

    http://www.businessweek.com/managing...313_410106.htm

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    Default Re: "Buy American"-Trade Wars beginning?

    James48843 - Other than the threat of counterfeited parts, lead paint, non-performing safety features, and the idea that its presence on our roads would be an eyesore due to its 10 year out of date styling - - - I'm not too worried about that Chinese SUV being sold here in the United States. At the $12K price point, or even a few $K's more, it still doesn't make sense for the average American consumer to buy the newer Chinese SUV when they can get a better equipped, and better quality used US SUV that has low mileage and is only a few years old. I suspect it will sell well in Mexico, but the U.S. market is a whole different ball game.

    What worries me more is the thought of the Chinese doing what the Japanese and the Koreans did - enter the market with just a few barebones models, establish a foundation, then gradually improve quality and offerings every few years. I've always thought of the Chinese as a very patient people/culture/country. I'm afraid that if the U.S. auto manufactures don't recognize and counter the threat posed by the Chinese, they'll continue to lost market share and their shirts, just like they did to the Japanese and the Koreans.

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    Default Re: "Buy American"-Trade Wars beginning?

    Quote Originally Posted by alevin View Post
    Silverbird, you explain the nuances of possibility so well, thanks!
    +1 Silverbird

    CB
    “Most men and women will grow up to love their servitude and will never dream of revolution.” - Huxley’s Brave New World

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