February 18, 2009 12:44 PM

Sidley Partner Slams 'Buy American' Stimulus Clause

Posted by Brian Baxter

President Bush's former top White House trade adviser--current Sidley Austin senior partner for global issues Daniel Price--says that the 'Buy American' clause in the $787 billion economic stimulus package approved by the Obama administration and Congress sends an "unfortunate signal" to U.S. trade partners and is "inevitably protectionist."

In an interview with Agence France-Presse, Price singled out the controversial 'Buy American' clause as counterproductive to international efforts to awaken the slumbering global economy.

"We can't get the global economy back on a path to growth if each country pursues its domestic recovery in a manner that disadvantages others or seeks to disrupt global supply chains," Price told the AFP. "The 'Buy America' provision sends an unfortunate signal, partly in light of the Group of 20 leaders' pledge last November not to raise new barriers to trade and to push back against protectionist impulses."

Price rejoined Sidley last week after serving as both a top economic aide to President Bush and the administration's deputy national security advisor for international economic affairs. Prior to joining the Bush administration in 2007, Price chaired Sidley's international trade and dispute resolution group. Upon rejoining the firm, Price was named a member of Sidley's executive committee.

The 'Buy American' clause in the stimulus bill has spurred debate between advocates for free trade and those in favor of granting benefits to U.S. industries hit hard by the global economic downturn. (CBS's 60 Minutes looked at the possible ramifications of the 'Buy American' clause on a steel plant in Blytheville, Ark., this past Sunday.)

Price did not directly criticize President Obama--himself a former Sidley summer associate--by name in the AFP interview, but did take aim at French President Nicolas Sarkozy for making government funds available to French auto companies that promised not to shut down factories or lay off workers.

"Similarly problematic [to the 'Buy American' clause] is President Sarkozy's proposal to condition assistance to the French auto industry on their agreement to purchase only locally manufactured components," Price told the AFP. "Actions that carve out sectors or industry from global competition are inevitably protectionist."

Price said that the central issue of the 'Buy America' clause is not whether it's consistent with the U.S.'s World Trade Organization obligations, but whether it constrains global trade.

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