The European Union has warned of possible trade litigation against the US if Washington presses ahead with a Buy American provision in its forthcoming economic stimulus bill. EU officials have expressed concern that the requirement for companies to use US steel and manufacturing products in projects funded by the bill could encourage a wave of protectionist measures from other countries.
The European Commission says it will examine any legislation to determine whether it violates a World Trade Organisation treaty signed by the US, EU and Japan. Signatories of the Government Procurement Agreement must open government contracts to foreign companies.
If the provisions finally passed by the Senate and approved by President Obama infringe the provisions of the GPA, to which the US is a signatory, this is something we will have to consider taking them to the [WTO] over, said Peter Power, EU trade spokesman.
Mr Power indicated that the EU was hoping to make its position clear to Washington before a bill was approved.
Although Buy American riders are part of longstanding US law, the measures in the Senate version of the bill go further. The rules have divided opinion among US businesses and on Capitol Hill.
Mitch McConnell, Republican leader in the Senate, attacked the idea on Monday. I dont think we ought to use a measure that is supposed to be timely, temporary and targeted to set off trade wars, he said. Its a very bad idea.
The US steel industry has strongly backed the provisions but business associations representing multinational companies have been critical.
Poster Comment:
Fuck these imbred Euro weenies. We have a right to make sure our tax dollars are spent here and not for you fucking EU assholes. The EU is our enemy and we should treat them as such.