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INSIDE WASHINGTONing the $787 billion stimulus, they should be the ones reapingthe benefits. According to a recent survey, this sentiment isshared by 86 percent of the population. Proponents also arguethat such protection for American manufacturers is necessaryto counter similar protections provided to their Europeancounterparts. Economist Robert Scott, for example, notes thatanother foreign competitor, China, spent more than $15 billionon energy subsidies in 2007. “When domestic industrieshave been injured by unfair trade practices, protecting themis good policy,” says Scott. Put simply, free trade must be accompaniedby fair trade; otherwise domestic companies willcontinue to outsource labor, while the American worker endsup footing the bill.OpponentsAlthough the “Buy American” provision was intended tomaximize the amount of stimulus money that would supportAmerican businesses and workers, thousands of U.S.firms have already been negatively impacted. A June 2009New York Times article noted that a Pennsylvania company,Duferco Farrel, was forced to cut 600 jobs in that statebecause some of its products are partially manufacturedin Canada, and as a result, it could not supply any of theARRA-funded projects. This result is, unfortunately, beingrepeated nationwide.The cost of the “Buy American” provisioncan also be reckoned in termsof the time and resources contractorsmust expend either deciphering agency-by-agencyguidance on the termsof the provision to determine if theyare in compliance or operating in thevacuum of no guidance at all. On June10, the executive director of the TexasRural Water Association testified beforea House committee hearing that “sometype of guidance from the Department[of Agriculture] is desperately needed.”In either situation, projects are delayedor abandoned, preventing the stimuluspackage from being fully effective.A Historical PerspectiveAs the economy soured in the fall of 2008,politicians on Capitol Hill and pundits atnews desks across the nation could not helpbut compare this financial meltdown to themost infamous of financial meltdowns, theGreat Depression. The 1930s economic collapseinspired a wave of economic nationalism,giving rise to the Smoot-Hawley Tariff,which in 1930 increased tariffs to unprecedentedlevels. Similar tariffs from Americantrading partners soon followed. Subsequently,by 1932 American exports had fallen to$390 million from a high of $1.3 billion in 1929; global tradefell by 66 percent.Although the economic situations are not perfectly analogous,the growing international criticism of the “Buy American”provision of ARRA should serve as a reminder of the negativeeffects of 1930s protectionism. Canada, the United States’ largesttrading partner, has already passed legislation (June 5) that“limit[s] government procurement from abroad to countriesthat themselves do not bar Canadian companies from suchcompetition.” The European Union and the United Kingdomhave threatened similar policies. It is this aspect of the “BuyAmerican” controversy that is perhaps the most disturbing.If a new wave of protectionist global trade takes hold, the effectcould cost American businesses billions in lost trade.While discordant voices continue to debate the pros andcons of “Buy American,” a definitive solution remains elusive.Until one is found, NUCA will make every effort to supportits members with as many resources as it can to help themnavigate the uncharted waters surrounding the provision’simplementation on utility construction projects.PJ Tabit is a NUCA Government Relations Intern and a senior at theUniversity of Scranton in Scranton, Pa., double-majoring in PoliticalScience and Philosophy.July 2009 | Utility Contractor 31National Utility Contractors Association