'Buy American' hits free-trade wall
By Leslie Jorgensen
On the face of it, “Buy American” seems to be a logical, patriotic and economically sound message. However, the few bills backing that concept that have emerged recently from the Colorado Legislature have had a hard time making it out of committee and on to the House and Senate floor.
An exception is a 2008 bill sponsored by former state Rep. Dorothy Butcher, D-Pueblo, requiring that the Colorado government buy American flags made in the United States to fly above its agencies.
Butcher’s pro-American measure passed — but not without opposition, some of it from the Legislature’s most vocally patriotic lawmakers. For example, Republican Sens. Bill Cadman and Dave Schultheis, Rep. Kent Lambert and former Rep. Doug Bruce, all of Colorado Springs, each cast a “nay” vote in his respective State, Veteran and Military Affairs Committee.
“That’s because they’re more Libertarian than Republican,” said Sen. John Morse, D-Colorado Springs. “They believe in a free market — without regulations — and buying goods at the lowest price. They’d rather buy an American flag made in China for, say $22, than pay $24 for one made in the United States.”
Schultheis said Morse had stated his position correctly, adding that he generally views bills and resolutions that attempt to bolster the position of the United States in the global marketplace as “protectionist.”
Morse, however, thinks lawmakers will be more receptive in 2010 to resolutions that support buying and manufacturing more products in the United States. If so, Colorado might yet catch the “Buy American” fever sweeping across the country.
The “Buy American” campaign launched by the United Steelworkers and the Alliance for American Manufacturing (AAM) last year has evoked resolutions of support from the legislatures of Alabama, Georgia, Kentucky, Indiana, Pennsylvania, Texas and West Virginia, and nearly 500 messages of support have emerged from city councils and county boards of commissioners across the country.
The movement, which is endorsed in general terms by both major parties, grew out of the recognition that more than 2.3 million American jobs have been lost to China alone since 2001. Even more jobs have gone to other nations as U.S. firms outsource their manufacturing in order to cut costs.
Outsourcing has fed U.S. unemployment figures and led to a decline in research and development. Colorado AFL-CIO Executive Director Mike Cerbo estimates that the trade deficit with China has resulted in a loss of $19.4 billion in U.S. wages — revenue now pumped into China’s economy instead of ours.
Denver Democrat Cerbo served in the state House from 2003 through 2007, and was the Majority Caucus chair. His seat is now held by Rep. Mark Ferrandino, D-Denver.
Cerbo has an ally in Denver City Councilman Chris Nevitt, who addressed an AAM rally last year.
“We don’t have a level playing field. We have a lot of countries where their labor laws are lax, where companies can get away — sometimes literally —with murder,” Nevitt told a crowd of Democrats, Republicans and Libertarians.
“We can’t compete against that,” Nevitt said. “And companies are going overseas to take advantage of that situation.”
Cerbo lamented that those jobs are gone. He believes the Buy American movement could help restore them and also revitalize the economy by creating new jobs.
When Democratic Rep. Sal Pace and Sen. Abel Tapia, both of Pueblo, introduced two bills to encourage the purchase of American steel in the 2009 session, they didn’t anticipate any difficulty with passage.
However, both measures were postponed indefinitely in the House State, Veteran and Military Affairs Committee. In other words, the measures were DOA, (dead on arrival). This time, Lambert’s votes to table the motions were supported by Democratic members of the committee.
Ironically, the most successful campaign to promote the support of local businesses, “Always Buy Colorado,” was introduced by a prominent Republican lawmaker from El Paso County in the 1980s just as the economy was turning from boom to bust. Senate President Ray Powers, who died last year, had no trouble passing his resolution. Businesses and the state not only supported the campaign, they created the “ABC” label for products.
These days, conservatives tend to see programs such as Buy American or Always Buy Colorado as Band-Aids. Some call them protectionist.
Frank Shannon is a member of the Colorado Chapter of Prosperous America, a Massachusetts-based bipartisan alliance that describes itself as promoting, “a new and positive U.S. trade policy that delivers prosperity and security to America, its citizens, farms, factories and working people.”
Shannon said resolutions urging the purchase of products made in the United States are “good… but peanuts compared to what needs to be done.”
“This is a war between Wall Street and Main Street,” said Shannon. “We need to release Wall Street’s clutches on Congress. Wall Street financiers and investors enrich themselves and don’t care about what’s best for America.”
Taking that message home, Shannon and Prosperous America are shopping for Colorado legislators who would sponsor a resolution to send a message to Congress demanding fair and free international trade. Shannon said the measure has support from several Democratic legislators, including Rep. Michael Merrifield and Sen. John Morse, both of Colorado Springs.
Shannon said he’s also seeking support from Republicans, including Reps. Bob Gardner and Mark Waller, both of Colorado Springs, Marsha Looper, of Calhan, and Mark Scheffel, of Parker; and Sen. Dave Schultheis, of Colorado Springs.
“It’s not a partisan issue,” Shannon said. “More Democrats are right on this issue than Republicans. I can tell you that President Bush and John McCain were so wrong on this — and I’m a Republican.”
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Shannon’s proposed resolution, in its current form, states:
“Whereas the United States trade policy has handicapped numerous domestic manufacturers and agricultural producers and has led to massive trade deficits, stagnant worker wages and the loss of over 4 million well-compensated jobs and;
Whereas the current trade deficit is undermining family-sustaining jobs and investment in assets, helping to foster a debt-driven economy that is dangerously dependent on foreign borrowing and;
Whereas fixing America’s international economic policy must be a top priority for the President of the United States and Congress and;
Therefore be it resolved by the undersigned manufacturing, agricultural and other economically linked organizations and individuals, to call upon our federal policy makers to:
1. Support policies that promote American interest by requiring full reciprocity, fairness and transparency in all U.S. trade agreements and;
2. Support actions to combat the illegal, mercantilist practice of prolonged currency misalignment and;
3. Support the elimination of tax disadvantages, which undermine the competitiveness of U.S. producers both at home and abroad or which discourage investment in America and;
4. Support the aggressive enforcement of U.S. laws to halt foreign illegal trade activities such as dumping, subsides and intellectual property theft. In addition, we call for goods sold here to meet U.S. food and product safety standards and;
5. Support the research, development and adoption of alternative fuel sources to reduce U.S. reliance on imported energy.
Therefore now be it resolved…
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Morse said he would support the measure, noting that, “We have to make sure it’s a level field and that China is not manipulating its currency.”
Morse said that by devaluing its currency over the decades in order to export goods cheaply, China has gained an edge in the global market.
“In general, I’m inclined to sponsor this resolution,” said Gardner. “Free trade is a great concept, but the United States hasn’t done a good job of enforcing fair trade agreements.”
Gardner said the United States can take a harder stance against China for having manipulated its currency and causing a trade imbalance.
“On the other hand, you don’t want to get into a free trade war,” he noted.
Looper, one of the few Republicans to vote for Butcher’s bill, said that she is reviewing this resolution, but has some problems with it.
Looper and Gardner expressed concern that such measures could set off a trade war with America’s fair trade partners — significantly, Canada.
“Trade with Canada is on the order of a billion dollars per day. It’s phenomenally large,” said Gardner.
Looper said that United States exported $249 billion in goods to Canada in 2007 — four times the amount shipped to China. That equates to 7.1 million jobs in this country.
Colorado alone exports an estimated $187 million in meat products and $10 million in dairy products to Canada per year. An estimated 124,000 jobs in Colorado are solely supported by exports to Canada, according to statistics quoted by Looper.
Schultheis, on the other hand, is still struggling with the issue.
“I haven’t come to a real conclusion yet about this resolution,” he said. “We’re in a global economy. We’re in it whether we like it or not.”
Schultheis said that he has to consider the average Colorado consumer, who can buy a foreign-made computer for about $1,500 or be forced to pay $3,000 for one made in the United States.
He noted that it can be difficult even to find “Made in the USA” toasters, car tires, shoes and other universally used manufactured goods.
“I’m basically a free-market person,” Schultheis said. “I don’t want to become a protectionist.”
Morse said the resolution would send a message to Congress to develop fair trade agreements and to encourage American companies to stop sending jobs overseas.
He cited the economic hit to Colorado Springs in 2007, when Intel closed its plant and laid off about 1,000 high tech workers. Intel invested $2.5 billion to build a microchip plant in northeastern China. The decision stunned some folks, who had welcomed Intel as a boon to the high tech industry only seven years earlier. Intel had spent $1.5 billion to retrofit a massive facility on Garden of the Gods Road — which still sits empty.
“It’s a classic example of what’s wrong with global economy and American businesses taking jobs overseas,” said Morse.
He said companies are lured to China and other countries that can offer lucrative incentive packages and workers who accept wages far lower than those in United States.
“It’s a huge weakness. The businesses have to weigh fairness — right from wrong — for this country,” declared Morse.
Waller approached the resolution with caution, saying he’d like to tweak its language, particularly the energy clause.
“But, who knows? This might be the one of those rare times when labor unions and Republicans find themselves on the same team,” said Waller.
Morse said that in the next session, lawmakers will introduce several resolutions and bills promoting American workers and products as well as fairer global trade practices.
“I think they’re going to pass with or without Republican support,” said Morse.
“America has done an awful lot of poking itself in the eye,” said Morse of the country’s foreign trade deficit. “We’ve got to stop doing that — and then heal the eye.”