The US is caught is somewhat of a discrepancy in its foreign trade policy.  On one side, the House stimulus package has a very protectionist “Buy American” clause.  Among other things, the clause requires any projects funded by the stimulus package to utilize American iron and steel.  The clause has met with such foreign opposition that President Obama has vowed to review the policy.  In fact, a European Commission spokesperson said the clause was “the worst possible signal” the Obama administration could send out.  The Commission went on to call the clause protectionist and would trigger retaliatory moves.  In addition, they would file a grievance with the World Trade Organization if the clause were to be included in the final package.  Vice President Joe Biden feels that the clause is somewhat justified and said it was “legitimate” to have some portion of it in the final legislation.

Were charges to be brought in front of the World Trade Organization, the US might be caught in an awkward position.  Just this month, the US filed charges with the World Trade Organization against China for using WTO-illegal protectionist policies.  In regards to those charges, Trade Representative Susan Schwab said, “We are going to the WTO because we are determined to use all resources available to fight industrial policies that aim to unfairly promote Chinese branded products”.  The US asserts that the Chinese government has provided numerous subsidies including incentives, grants, and preferential loans to companies in an effort to increase exports of China made products.  Schwab goes on to say, “China’s policies favoring domestic brands also raise questions regarding China’s commitment to providing a level playing field for foreign owners of important intellectual property rights, namely the trademark rights of US brand owners”.

The Stimulus Bill “Buy American” clause amounts to little more than the same type of subsidy, incentive or preferential loan that the US accuses China of.  I am doubtful that, “do as I say, not as I do” will end up being a successful foreign policy dogma for the US.