February 20, 2009    Volume 16, No. 3

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'Fair Trade' Community Celebrates Rare Victory

By Richard McCormack

Proponents of various "Buy American" provisions that passed in the final version of the $787 billion American Recovery and Reinvestment Act of 2009 (HR-1) have claimed a rare victory. Inclusion of Buy American requirements for iron, steel, textiles and manufactured goods represents "the first major victory [over] the Chamber of Commerce and other proponents" of free trade policies in decades, says one Senate staff aide involved in the debate. The vote represents a "sea change" in the Washington debate over trade and outsourcing, according to other Buy American proponents.

In a rare on-the-record vote on a contentious trade-related issue, the Senate defeated a provision sponsored by Sen. John McCain that would have stripped the "Buy American" requirement from the Stimulus Bill. The issue flared into a major media debate, with representatives from foreign nations actively engaged in the American political process, a development that raised the ire of U.S. domestic manufacturers and their Washington lobbyists. A statement by House Democratic Majority Leader Steny Hoyer (D-Md.) who said the European Union's concerns about protectionism were "justified," rankled American domestic producer interests. President Obama also forgot his "Buy American" campaign rhetoric -- including special "Buy American Vote for Barack Obama" buttons he produced -- and said that he feared the provisions might be "protectionist." That word emitting from his lips (along with his visit to a Caterpillar plant in Peoria, Ill.) was the clearest indication yet that the young president "has gotten the bum's rush by the international establishment" wanting to maintain the free-trade status quo, said another Washington lobbyist. "As far as I can tell, I don't know of one person on the Obama [economic team] who is on our [domestic manufacturers'] side."

The McCain amendment came to the Senate floor minutes after Sen. Byron Dorgan's [D-N.D.] "Buy American" amendment was adopted by voice vote. McCain offered a counter amendment to strike it from the final bill. It was defeated by a wide margin.

What made the vote unique was the fact that it made it to the floor of the Senate, a rare occurrence. In the past, most trade issues have been stymied in the Senate Finance Committee and in the House Committee on Ways and Means. For decades, those committees have effectively blocked any open congressional debate on trade. "Those committees are closed loops and if they could just break those committees they could have a free flow of information and ideas through" the Congress, says one Washington "fair trade" lobbyist.

Another important player in the Buy American debate proved to be Rep. Jim Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, who delighted the domestic manufacturing community by saying that if the Buy American provision was not included in the Stimulus Bill, then "I'm not supporting it and I'm bringing a lot of votes with me."

The textile industry was particularly pleased with the adoption of the "Berry" amendment (from 1941) to be applied to the Department of Homeland Security. Placed into the bill by Rep. Larry Kissell (D-N.C.), the requirement mandates that any textile or apparel product purchased for the Coast Guard and Transportation Security Administration be manufactured in the United States with 100 percent U.S. content. The requirement includes the purchase of tents, tarpaulins, covers, textile belts, bags, protective equipment, "sleep systems," fieldpacks, textile marine equipment, parachutes, bandages, cotton and other natural fibers, spun silk or yarn for cartridge cloth, synthetic fiber, coated synthetic fiber, canvas and wool (Sec. 603).

The Senate added the following language adopted in the final bill: "This section shall be applied in a manner consistent with United States obligations under international agreements."

"I am so proud to have my name on the Kissell Amendment," said Rep. Kissell. "It is estimated that upwards of 20,000 people will have jobs due to this measure. So many people in the textile industry worked so hard to make this expansion of the Berry Amendment a reality and as a former textile worker myself, I want to thank them from the bottom of my heart."

Those in the apparel and textile industry were laudatory. "Congressman Kissell is a hero to everyone in the U.S. textile and apparel manufacturing sector," crooned Cass Johnson, chairman of the National Council of Textile Organizations. "This long-sought-after job creating legislation never would have passed without his dogged persistence."

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said that for every $100 million spent under the Kissell Amendment, the U.S. government will create or save 5,000 American jobs. The amendment would not have been included in the final bill had it not been for the support of House Speaker Nancy Pelosi (D-Calif.), and U.S. Senate Majority Leader Harry Reid (D-Nev.), according to the proponents. Sen. Kay Hagan (D-N.C.) also worked behind the scenes to ensure that the Senate would agree to the amendment. "This was an amazing effort against steep odds," says Johnson.

The group of U.S. textile and apparel organizations supporting the measure (which also included the U.S. Industrial Fabrics Institute, National Textile Association, National Cotton Council and UNITE HERE) will now try to convince the Obama administration to expand the amendment to cover other DHS agencies: the Federal Emergency Management Agency, Customs and Border Protection, the Secret Service and Citizenship & Immigration Services.

The reason why the Kissell Amendment provisions would only extend to TSA and the Coast Guard and not other DHS agencies "is because the U.S. government is a signatory to the WTO Agreement on Government Procurement, which prohibits Berry-type provisions," explain the U.S. textile and apparel trade groups. "The United States has the option to exempt agencies critical to national security from the GPA, but only has chosen to exempt the Coast Guard and TSA within DHS. The Berry Amendment Extension Act allows the Obama administration to apply the amendment to other agencies within DHS."

Elsewhere in the massive spending bill, there was another amendment adopted that prohibits banks and other companies that have taken taxpayer bailout funds from hiring lower-paid foreign workers to replace American workers being fired. The proposal, sponsored by Sens. Bernie Sanders (I-Vt.) and Charles Grassley (R-Iowa), requires that banks receiving government funds hire only Americans for two years, "unless they could prove they were not replacing laid-off Americans with guest workers," according to a report from Sanders' office. "Because the banks have announced mass layoffs, the measure would effectively place a moratorium on the H-1B visa program." The proposal was included unchanged in the conference report between the House and the Senate.

Sanders says that with thousands of financial services workers unemployed "it is absurd for banks to claim they can't find qualified American workers. The least we can do is to make sure that banks receiving a taxpayer bailout are not allowed to import cheap labor from overseas while they are throwing American workers out on the street." Said one Senate staffer about inclusion of the amendment: "This is a momentum changer that I think we can really build off of for the future." Rare Senate Vote On A Trade Issue

Minutes after Sen. Byron Dorgan's "Buy American" amendment to the American Recovery and Reinvestment Act of 2009 was adopted by voice vote on the evening of Feb. 11, the Senate took up Arizona Sen. John McCain's amendment to strike the language from the bill. McCain has long been the Senate's leading opponent of Buy American provisions in spending bills. His provision stated that any "utilization of funds appropriated or otherwise made available by this act shall not be subject to any 'Buy American' requirement." The votes were 65 against his proposal, 31 in favor, with three senators not voting. Only one non-Republican member voted with McCain -- Sen. Joseph Lieberman, whose state is home to United Technologies, though no reason was given by his office for his vote. Nine Republican senators went against "doctrine" and voted against the McCain amendment.

YEAs, 31 -In favor of the McCain Amendment to overturn the Buy American Provision:
Alexander (R-Tenn.)
Barrasso (R-Wyo.)
Bennett (R-Utah)
Bond (R-Missouri)
Bunning (R-Ky.)
Chambliss (R-Ga.)
Coburn (R-Okla.)
Cochran (R-Miss.)
Corker (R-Tenn.)
Cornyn (R-Texas)
Crapo (R-Idaho)
DeMint (R-S.C.)
Ensign (R-Nev.)
Enzi (R-Wyo.)
Hatch (R-Utah)
Inhofe (R-Okla.)
Isakson (R-Ga.)
Johanns (R-Neb.)
Kyl (R-Ariz.)
* Lieberman (I-Conn.)
Lugar (R-Ind.)
Martinez (R-Fla.)
McCain (R-Ariz.)
McConnell (R-Ky.)
Murkowski (R-Ark.)
Risch (R-Idaho)
Roberts (R-Kan.)
Sessions (R-Ala.)
Shelby (R-Ala.)
Thune (R-S.D.)
Wicker (R-Miss.)

NAYs, 65 - In favor of keeping the Buy American provision in the Stimulus Bill:
Akaka (D-Hawaii)
Baucus (D-Mont.)
Bayh (D-Ind.)
Begich (D-Ark.)
Bennet (D-Colo.)
Bingaman (D-N.M.)
Boxer (D-Calif.)
Brown (D-Ohio)
* Brownback (R-Ks.)
* Burr (R-N.C.)
Burris (D-Ill.)
Byrd (D-W.V.)
Cantwell (D-Wash.)
Cardin (D-Md.)
Carper (D-Del.)
Casey (D-Penn.)
* Collins (R-Maine)
Conrad (D-N.D.)
Dodd (D-Conn.)
Dorgan (D-N.D.)
Durbin (D-Ill.)
Feingold (D-Wisc.)
Feinstein (D-Calif.)
Gillibrand (D-N.Y.)
* Graham (R-S.C.)
* Grassley (R-Iowa)
Hagan (D-N.C.)
Harkin (D-Iowa)
* Hutchison (R-Tex.)
Inouye (D-Hawaii)
Johnson (D-S.D.)
Kaufman (D-Del.)
Kerry (D-Mass.)
Klobuchar (D-Minn.)
Kohl (D-Wisc.)
Landrieu (D-La.)
Lautenberg (D-N.J.)
Leahy (D-Vt.)
Levin (D-Mich.)
Lincoln (D-Ark.)
McCaskill (D-Mo.)
Menendez (D-N.J.)
Merkley (D-Ore.)
Mikulski (D-Md.)
Murray (D-Wash.)
Nelson (D-Fla.)
Nelson (D-Neb.)
Pryor (D-Ark.)
Reed (D-R.I.)
Reid (D-Nev.)
Rockefeller (D-W.V.)
Sanders (I-Vt.)
Schumer (D-N.Y.)
Shaheen (D-N.H.)
* Snowe (R-Maine)
* Specter (R-Penn.)
Stabenow (D-Mich.)
Tester (D-Mont.)
Udall (D-Colo.)
Udall (D-N.M.)
* Vitter (R-La.)
Warner (D-Va.)
Webb (D-Va.)
Whitehouse (D-R.I.)
Wyden (D-Ore.)

Not Voting -- 3
Gregg (R-N.H.)
Kennedy (D-Mass.)
Voinovich (R-Ohio)

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