Two Questionable Trade Proposals …. “Buy American” & Currency / Subsidy Determinations.


The “Buy American” provision in President Obama’s “American Jobs Act” is viewed by some as an “anti-stimulus trade provision” similar to that in the earlier 2009 stimulus legislation. This may very well be illegal under WTO rules. Remember the uproar this type of provision caused with Canada.
The Senate is considering legislation requiring estimates of currency undervaluation when calculating anti-subsidy import tariffs. This may very well also be considered illegal under WTO rules. This proposal may represent in a perverse way an understanding that current WTO rules do not, in fact, outlaw currency actions in the context of subsidy determinations.
The larger question is why do the administration and the Congress propose legislation that is inconsistent with our global trade obligations? Do these proposals represent a backlash against globalization which is viewed as making things much harder for the U.S. economy?

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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