On March 13, 2012, the Senate (by voice vote) unanimously passed an amendment to the $109 billion Senate Transportation bill designed to strengthen “Buy America” preferences. The legislation, introduced by Sens. Sherrod Brown (D-Ohio) and Jeff Merkley (D-Ore.), improves transparency and reporting of proposed “Buy America” waivers by requiring the Department of Transportation to provide notification on a public website and a 15-day comment period before such waivers are granted. The measure also ensures an annual accounting of federal funds used to purchase foreign-produced iron and steel, and explicitly requires that “Buy America” preferences be carried out in “a manner consistent with United States obligations under relevant international agreements.”
In addition, the measure ensures that public works projects receiving federal aid cannot be “segmented” to evade “Buy America” preferences. According to a press release from Sen. Brown’s office, “segmentation” has been one of the “most egregious examples” of practices used to circumvent “Buy America” preferences. Segmentation occurs when an infrastructure project is split into various contracts so that contracts under the project that plan to use foreign iron, steel, and manufactured goods do not receive federal funding. The press release states that segmentation allowed for Chinese-made steel to be used during the construction of the new Oakland, California Bay Bridge.
Furthermore, on Friday, March 16, Sens. Brown, Debbie Stabenow (D-Mich.), and Bob Casey (D-Pa.) led 188 members of Congress in an effort to urge President Obama to address China’s unfair practices in the auto parts sector. Members of both the House and Senate, including all the Democratic members of the House Ways and Means Committee, expressed their concerns in a letter that encourages President Obama to utilize the newly created Interagency Trade Enforcement Center (“ITEC”) to address such practices. President Obama established the ITEC February 28, 2012, to combat other nations’ violations of trade rules.
Referencing figures from a report released by the Economic Policy Institute (“EPI”) January 31, 2012, the lawmakers argue that 75 percent of jobs in the automotive sector are in auto parts, and that up to 1.6 million U.S. jobs could be at risk if China’s practices are not curtailed. The letter also claims that because of China’s practices, China has increased the number of auto parts it imports into the United States by 900 percent since 2000.
