Commentary: 'Buy American' clause a bad idea

This editorial appeared in The Kansas City Star.

Barack Obama's transition team says it may insert "buy American" provisions in the immense stimulus package taking shape on Capitol Hill, according to the Reuters news agency.

For those who personally prefer to buy American, great! Go for it.

But to mandate this policy would be a major mistake. Buy-American provisions are like economic boomerangs: Whatever we do to others is likely to be done to our own.

Given the global recession, countries around the world are under increasing pressure to shelter domestic industries from foreign competition. It will be tough enough as it is maintaining demand for American goods.

A stimulus-bill provision favoring U.S. companies over foreign firms would be quickly imitated by our trading partners, to the detriment of American exporters.

That would gum up the world-trade system, while undermining our own economy, which increasingly relies on export industries. Such companies also tend to pay higher wages than other enterprises.

Congress will face stiff pressure to favor U.S. companies, but the Obama administration should resist. Beggar-thy-neighbor is never a wise approach in global trade, and it would hurt companies seeking to sell American goods abroad.

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