Magazine article National Defense

The Reality of 'Buy America' Provisions

Magazine article National Defense

The Reality of 'Buy America' Provisions

Article excerpt

When the House Armed Services Committee passed the 2004 National Defense Authorization Act last May, it included a series of legislative requirements, which came to be known as the "Buy America" provisions. Subsequently, these provisions were approved by the House of Representatives and sent to a House-Senate Conference Committee for final resolution.

Few, if any, issues in recent history have generated more reactions from a wide variety of interest groups. From the onset, the requirements were opposed strongly by the Departments of Defense, State and Commerce; Office of Management and Budget; U.S. Trade Representative; European Union; several allied nations, and a large portion of the U.S. defense industry.

Without delving deeply into the individual provisions themselves, it is hard to understand how anyone could be against initiatives that would strengthen the U.S. industrial base. It is a well-known fact that significant numbers of U.S. manufacturing capabilities have been migrating overseas for a number of years. There is little doubt that U.S. defense industrial base capabilities have been part of that migration and that national security could be at risk if critical parts and supplies became unavailable in times of emergency.

During Operation Iraqi Freedom, for example, a foreign company refused to ship critical parts for one of this nation's premiere weapons systems, because the company did not agree with the U.S. decision to enter Iraq.

Much media attention was devoted to this unacceptable situation. Little notice, however, was given to the fact that as soon as the Defense Department learned what was going on, it identified an alternative U.S. supplier, and within 48 hours, the parts were on their way.

The "Buy America" stipulations were well intended and sought to address real industrial base issues. The reason for the largely negative reaction lies in how the House attempted to correct those issues.

The provisions took everyone by surprise. There were no public hearings or other forums where the administration and representatives of the defense industry could comment on the proposals. Without this prior consultation, many of the provisions were drafted poorly. Many interested parties felt that the proposals could cause significant harm to the U.S. defense industry.

Some would have required that all critical items in all weapons systems be produced in the United States. If enacted into law, these requirements would have violated existing trade agreements with many of America's allies, who produce a significant portion of the parts and supplies for U.S. military services. Under the provisions, for example, the Joint Strike Fighter, which is being developed with considerable participation by U.S. allies, could not be produced.

The legislation would have required the United States to establish some industrial capabilities within its borders that currently do not exist, at a significant new cost to the taxpayer. Further, many companies--especially small businesses--argued that several of the proposals would increase their costs and record-keeping requirements and discourage them from continuing to do business with the Defense Department.

After nearly six months of negotiations and a presidential threat to veto the bill, the conference committee agreed to modify the "Buy America" language in the final measure, which the president signed into law in November. …

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