The Procurement System Puts U.S. Companies at a Disadvantage. Buy America Can Help.

By Elizabeth Brotherton-Bunch
Mar 15 2017 |
Sen. Tammy Baldwin is a longtime proponent of Buy America. | Photo courtesy via Flickr

Sens. Tammy Baldwin & Jeff Merkley want the president to strengthen Buy America preferences.

The United States has given away far more access to its procurement market than it has received abroad — and that’s putting U.S. companies and workers at a huge disadvantage, according to a new report from the Government Accountability Office (GAO).

The GAO looked at foreign access to the U.S. procurement market, which is essentially all the government projects that companies can bid to do work on.

The agency reported that the U.S. reported $837 billion in covered procurement in 2010 — the most recent data available — which is about twice as large as the procurement reported by its next five largest trade agreement partners combined, including the European Union, Japan, South Korea, Norway and Canada.

The GAO’s findings immediately caught the attention of Sens. Tammy Baldwin (D-Wis.) and Jeff Merkley (D-Ore.), who sent President Trump a letter urging him to stand up for American manufacturers and workers by making good on his promise to strengthen Buy America preferences.

Calling the current system “a losing proposition,” the Senators note that part of the problem is that government waivers have significantly weakened Buy America preferences over the years, which has sent taxpayer dollars overseas to foreign firms, even when U.S. companies and workers were ready to do the work at a fair price. That tax money could have been reinvested in local communities, creating jobs and boost in the economy.

The current system is doubly unfair. American companies do not enjoy the same market access abroad as their foreign competitors do in the United States. But American firms and workers do have to compete against foreign companies for work on U.S. government projects that will be funded with taxpayer money.   

So how do we level the playing field? Well, strengthening Buy America will make things more fair for American manufacturers — and that’s what Baldwin and Merkley are urging Trump to do.

“You promised the American people a ‘Buy American, Hire American,’ trade policy," they write. "This report makes clear that our manufacturers are losing out in our trade deals. We are calling on you to honor your commitment by suspending Buy American waivers for foreign firms until government procurement chapters in our trade agreements are renegotiated.”

Along with suspending Buy American waivers, the Senators ask Trump to address the issue in trade agreements, including the North American Free Trade Agreement (NAFTA). “Absent such action, every government contract your administration signs risks sending hardworking Americans’ tax dollars abroad,” the Senators write.

The GAO also notes in its report that more statistical data on procurement is needed, and urged the U.S. Trade Representative, among other government agencies, to take steps to address the issue.

In the meantime, the Trump administration should take decisive action to strengthen America’s current Buy America preferences. Buy America creates good-paying U.S. jobs, ensures taxpayer dollars are reinvested in American communities — and enjoys the support of nearly three-fourths of Americans. It just makes sense.