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US Senate gets it wrong on Buy American.



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The Hon Simon Crean MP

Minister for Trade

M E D I A R E L E A S E

SC007 5 February 2009

US SENATE GETS IT WRONG ON BUY AMERICAN

The Minister for Trade Simon Crean has hit out at the US Senate after it voted against an amendment to strip the Buy American clause from the US stimulus package.

“This is the wrong course of action, they have got to reverse their decision.

“It will result in retaliatory action, it will result in a trade war,” Mr Crean warned.

The US Senate voted down by 65 votes to 31 votes an amendment from former presidential candidate and Republican senator John McCain.

The Buy American clause bans spending on stimulus package projects unless all of the iron, steel and manufactured goods used are made in the United States.

Mr Crean said the Buy American clause would cost jobs in the US as other nations would hit back and impose restrictions on the importation of US goods.

“The benefits from the US fiscal stimulus package will be undermined by retaliation from other nations if the Buy American clause stays.

“Is the US Senate prepared to risk a race to the bottom through a trade war?

Mr Crean said the Australian Government was examining the Buy American clause with respect to US obligations under the Australia-US Free Trade Agreement.

Last year Australia exported $484 million worth of steel to the US and this could be jeopardised by the Buy American clause, Mr Crean said,

The defeat of the McCain amendment is a major blow but the Senate has not made a final decision on the package, Mr Crean said.

“There is still time for the Buy American clause to be removed,” Mr Crean said.

Mr Crean said the protectionist push was opposed by US President Barack Obama and all G-20 leaders.

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