President's Jobs Bill Contains "Buy American" Restrictions, Infrastructure Bank
The President’s American Jobs Act, introduced on September 13, 2011, would, among other things, fund various infrastructure projects, create a national infrastructure bank, modify certain foreign tax credit rules, propose a national wireless initiative, implement various unemployment provisions, and repeal certain oil subsidies. The Act also contains a “Buy American” restriction for iron, steel, and manufactured goods used in certain projects funded by the Act. The government of Canada is requesting consultations on this Buy American restriction.
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Bill Has “Buy American” Restrictions for Iron, Steel & Manufactured Goods
S. 1549, contains a provision to prohibit, with certain exceptions1, funds appropriated or otherwise made available by the Act from being 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 U.S.
The bill would also apply “Buy American” restrictions to certain other specified types of infrastructure projects.
Canada Opposes, May Initiate Consultations Under 2010 Agreement
Canada’s Minister of International Trade has recently stated that he has instructed Canadian officials to initiate the consultation process that was established as part of the 2010 Canada-U.S. Agreement on Government Procurement2 regarding this proposed restriction.
Bill Would also Create National Financing Bank to Fund Infrastructure Projects
S. 1549 would establish the American Infrastructure Financing Authority as a wholly-owned government corporation that would provide direct loans and loan guarantees to facilitate investment in economically-visible infrastructure projects of regional or national significance.
1According to S. 1549, this “Buy American” restriction would not apply in any case or category of cases if the head of a Federal department/agency involved finds that (i) it would be inconsistent with the public interest; (ii) the iron, steel, and relevant manufactured goods are not produced in the U.S. in sufficient quantity, or (iii) it would increase the cost of the project by more than 25%. The American Jobs Act also states that the “Buy American” requirement is to be applied in a manner consistent with U.S. obligations under international agreements.
2The 2010 agreement resolved Canadian complaints over identical "Buy American" provisions in the 2009 American Recovery and Reinvestment Act (P.L. 111-5), and settled long-standing U.S. requests for access to Canada's provincial procurement sector. See ITT’s Online Archives or 02/16/10 news, 10021610, for BP summary of agreement.)
American Jobs Act text available here
American Jobs Act fact sheet and overview available here