Phindile Ngwenya, "Implications of the 'buy American' clause for trade policy in African countries," Africa Can - end poverty, February 27, 2009.

From a World Bank Africa specialist

President Obama on February 17 signed the $787 billion Stimulus package into law. The package is aimed at stimulating production in the US as well as job creation. However, it includes the following clause:

SEC. 1605. USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS
(a) None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
(b) Subsection (a) shall not apply in any case or category of cases in which the head of the Federal department or agency involved finds that—(1) applying subsection (a) would be inconsistent with the public interest;(2) iron, steel, and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or(3) inclusion of iron, steel, and manufactured goods produced in the United States will increase the cost of the overall project by more than 25 percent.
(c) If the head of a Federal department or agency determines that it is necessary to waive the application of subsection (a) based on a finding under subsection (b), the head of the department or agency shall publish in the Federal Register a detailed written justification as to why the provision is being waived.
(d) This section shall be applied in a manner consistent with United States obligations under international agreements.

Read the analysis here =>

Phindile Ngwenya is Research Analyst with the Poverty Reduction and Economic Management (PREM) team in the Pretoria Office in South Africa. Prior to joining the World Bank, she was a Senior Economist with the Economic Policy Division at the National Treasury and before then she was Economics Lecturer at Bond South Africa. She holds a Bachelors Degree in Economics and Statistics from the University of Swaziland and a Masters degree in Environmental Economics from the University of Pretoria.Recommend this Post

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