Biden’s ‘Buy American’ push could sever international trade commitments, EU official says

Topline

President Joe Biden’s “Buy American” plan to revitalize the country’s manufacturing “backbone” could breach international trade agreements, Europe’s top trade official suggested on Thursday, who vowed to monitor whether the fact forcing federal organizations to buy locally unfairly locks in international competition.

Highlights

Valdis Dombrovskis, the trade chief of the world’s largest trading bloc, Recount told reporters that ordering federal authorities to preferentially use US contractors could violate World Trade Organization rules governing government procurement.

Biden has campaigned to boost America’s manufacturing industry and signed an executive order on January 25 directing federal procurement to give preferential treatment to American contractors to “rebuild America’s backbone: manufacturing, unions and the middle class”.

Dombrovskis said the EU will “assess how well the United States is meeting its commitments under the Global Agreement on Government Procurement”, which grants US companies access to government procurement markets in other countries in exchange the opening of their internal market.

Dombrovskis said a “further assessment” will be needed to determine whether or not the United States has reneged on its commitments and to see what impact the rule could have on European businesses.

Key Context

Relations between the United States and the EU have deteriorated under Donald Trump, who fought on several diplomatic fronts. While Biden has sought to reverse many Trump-era policies, including joining the World Health Organization and the Paris climate accords, a number of Trump’s trade policies are more difficult to lift, such as a trade war with China, tariffs on European metal or the opposition. European plans to tax large technology companies. Reversing those policies could take time, as the administration has said it will prioritize a coronavirus relief package, pandemic management and “domestic investments” before tackling new deals. commercial.

Surprising fact

While many of Biden’s early executive orders sought to reverse Trump-era policies, the “Buy American” order sounds familiar. Trump actually had Posted three “Buy American” executive orders during his four years in office.

Further reading

EU trade chief warns Biden against ‘Buy American’ push (Politico)

Biden will be more predictable than Trump on trade, but don’t expect tariff cuts anytime soon (Forbes)

Biden set to push ‘buy American’ to boost domestic manufacturing (FT)