Letter to Michael Froman, United States Trade Representative - "Buy American" Policies in Trade Negotiations

Letter

Dear USTR Froman:

We write in advance of your meeting with European Trade Commissioner Cecilia Malmström in Washington, DC next week. We are hopeful that your continued negotiations will ultimately result in a transatlantic trade agreement that is mutually beneficial to Europe and the United States, strengthening both our economies and our strategic alliance. However, it is critically important that the proposed Transatlantic Trade and Investment Partnership (TTIP) avoid further weakening of U.S. "Buy American" government procurement laws with regard to the defense sector, and we urge you to vigorously defend these policies in your negotiations with Commissioner Malmström.

It has been widely reported that one of the European Union's primary goals in TTIP negotiations is to gain additional access to the U.S. government procurement. This is of particular concern to us and our constituents with regard to defense procurement. As you know, the Buy American Act, Berry Amendment, and other domestic preference laws, as implemented, already give the European Union broad access to the U.S. procurement market. In fact, the Department of Defense routinely waives the Buy American Act, which has resulted in hundreds of billions of dollars in federal contracts being awarded to overseas firms, many of which are based in the European Union. Since 2007, the Department of Defense alone has sidestepped the Buy American Act 307,123 times through waivers and exceptions, and spent over $176.8 billion on goods manufactured by foreign companies. We would submit that, contrary to the view of the European Union, our procurement market is already very open to European businesses. We strongly believe that any further erosion of the Buy American Act, especially in the defense sector, would undermine our national security and threaten the growth and sustainability of our defense industrial base.

Our states are just beginning to recover from the disastrous toll that the Great Recession took on our manufacturers. While we've added almost 400,000 manufacturing jobs in the last few years, our total number of manufacturing jobs is still millions shy of what it was just two decades ago, and numerous companies have gone out of business. Some of those capabilities may never return, putting our defense industrial base--and ultimately our national security--at risk, as we become ever more reliant on foreign firms for defense manufacturing.

Beyond the defense sector, government procurement policy is also critical when it comes to transportation and infrastructure. U.S. law recognizes that the federal government has a responsibility to ensure that domestic firms can compete fairly for U.S. taxpayer dollars. The beneficial ripple effect of federal investments in transportation and infrastructure--through jobs, direct and indirect spending, and increased tax revenue--is dramatically reduced when those dollars go to foreign firms. Congress has explicitly taken this position in the past by requiring the massive investment in infrastructure through the American Recovery and Reinvestment Act of 2009 be completed with goods manufactured in the United States.

We appreciate your work to move TTIP negotiations with the European Union closer to the finish line. Europe has been, and will continue to be, one of our strongest and most important allies. We look forward to working with you to further cement that economic relationship while still allowing our manufacturers to flourish.