"Buy American" plan could cost U.S. jobs: study

Tue Feb 3, 2009 4:38pm EST
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By Doug Palmer

WASHINGTON (Reuters) - "Buy American" provisions under consideration in Congress as part of a huge economic stimulus bill could create only 1,000 new steel industry jobs and might cost as many as 65,000 across a number of sectors, a new study said on Tuesday.

"The negative job impact of foreign retaliation against Buy American provisions could easily outweigh the positive effect of the measures on jobs in the U.S. iron and steel sector and other industries," Gary Hufbauer and Jeffrey Schott, senior fellows at the Peterson Institute for International Economics, said in the report.

The study came as the Senate was debating a nearly $900 billion economic stimulus plan that allows only U.S.-made iron, steel and manufactured goods to be used in public works project funded by the bill.

That built on a measure passed last week by the House as part of its $825 billion stimulus plan that would require the use of U.S.-made iron and steel in public works projects and which raised concerns among U.S. trading partners the United States was moving toward increased protectionism.

The governments of both the European Union and Canada sent letters to Congress on Monday urging the provision be dropped.

White House spokesman Robert Gibbs told reporters on Tuesday the Obama administration was still reviewing its position on the Buy American provision, hours after House Democratic Leader Steny Hoyer said he thought foreign concerns about the measure were "justified."

U.S. officials have responded to Canada's concerns but given no guarantees it would be excluded from the provisions if enacted, Canadian Trade Minister Stockwell Day said in Ottawa.

"We're going to keep the pressure up," Day said.   Continued...

<p>A construction worker balances on a steel beam at 8th Avenue and 42nd Street in New York in this April 21, 2008 file photo. REUTERS/Shannon Stapleton</p>