A new “Buy American” provision in a massive climate change bill working its way through Congress is a worrisome sign of increased U.S. protection, a business official said on Friday.
The provision offers financial aid to automakers building plug-in electric cars. But it stipulates those cars must be “developed and produced in the United States.”
“All of us are trying to do everything we can to help the automakers here. But provisions like this smell of Buy America,” said Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce.
The language could violate U.S. obligations under the World Trade organisation, he said, risking possible retaliation from U.S. trading partners.
The Canadian government is already worried about the impact of a “Buy American” provision in the U.S. economic stimulus package passed by Congress in February. It says public works projects should use iron, steel and other goods made in the United States.
Ottawa says that as a result, Canadian companies are being discriminated against by U.S. state and municipal governments on some water and sewage treatment projects funded by the bill.
Two other bills that have passed the House of Representatives this year, to improve water quality and build “greener” schools, also included “Buy American” mandates.
The provision offering aid to automakers building electric cars in the United States was attached to a bill requiring reductions of industrial emissions of greenhouse gases, which passed the House Energy and Commerce Committee in May.
Speaker Nancy Pelosi wants the bill to pass the full House in June or July. Its fate is uncertain in the Senate.
Adam Benson, spokesman for one of the lawmakers who inserted the provision, Representative John Dingell of Michigan, said it was written to comply with trade laws and wasn’t specific to the “Big Three” U.S. automakers, General Motors Corp, Ford Motor and Chrysler LLC.
But, Wenk pointed out the wording called for the cars to be developed and built in the United States, which he said was likely to preclude a foreign company if its research and development took place abroad.
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