Business 315: Pros and Cons of the Buy American Act Requirements

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Buy American Act (BAA) requirements: Pros and cons Buy American Act (BAA) requirements specifically pertain to the use of American products in federal public works. BAA stipulations have been particularly controversial because of their demand that domestic steel and iron be used in public construction projects. Domestic steel and iron must be used in all permanent structures created via federal contracts. Waivers to the Act are available provided "the application of those provisions would be inconsistent with the public interest;" "steel and iron materials/products are not produced in the United States in sufficient and reasonably available quantities which are of a satisfactory quality" or when the cost of the final product would be prohibitive, based upon the requirements, versus the materials offered by foreign competitors (23 CFR 635.410 - Buy America requirements, 2011, Vlex). The BAA definition of a "domestic end product"¦requires that the cost of a product's components mined, produced, or manufactured in the U.S. exceeds 50 percent of the cost of all its components" (Zirkelbach 2009:55). BAA requirements were instituted to protect the iron and steel industry within the United States, despite the general trend towards less protectionist trade policies overall in recent decades, as manifested in the passage of NAFTA (North American Free Trade Agreement). The principles of U.S. protectionism embodied in the BAA been widely criticized by advocates of free trade.

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