MADE (MOSTLY) IN USA

Even govern­ment has trou­ble buy­ing Amer­i­can

The Washington Times Weekly - - National - BY JAMES VAR­NEY

It’s hard enough for con­sumers to find the “Made in the USA” la­bel in a mar­ket sat­u­rated with for­eign goods.

Turns out the govern­ment has the same prob­lem.

De­spite laws dat­ing back to the De­pres­sion and periodic prod­ding from pres­i­dents and Congress, fed­eral agen­cies can’t seem to wean them­selves from for­eign-made goods, in­clud­ing Bor­der Pa­trol uni­forms made in Mex­ico and $5 bil­lion in an­nual de­fense spend­ing that the Pen­tagon can’t square with var­i­ous “Buy Amer­i­can” rules.

Work­ing against the rules are ex­cep­tions, loop­holes, waivers and free trade deals that pro­hibit the U.S. govern­ment from lim­it­ing agree­ments with trad­ing part­ners. Those deals have carved out ex­emp­tions for more than 125 coun­tries. Congress says it’s finally had enough. Tucked in­side the mas­sive spend­ing bill passed were in­struc­tions to the ad­min­is­tra­tion to look into cre­at­ing a web­site, BuyAmer­i­can.gov, to track waivers and vi­o­la­tions.

It comes on the heels of a 2017 ex­ec­u­tive order in which Pres­i­dent Trump re­in­forced the “Buy Amer­i­can” re­quire­ment within the ex­ec­u­tive branch, and a bi­par­ti­san push in the Se­nate to do the same with govern­ment pur­chases and on in­fra­struc­ture projects.

“We must do ev­ery­thing we can to pro­tect and max­i­mize Amer­i­can jobs, and that starts with en­sur­ing that our tax dol­lars aren’t used to cre­ate jobs over­seas,” said Sen. Rob Port­man, Ohio Repub­li­can. “Un­for­tu­nately, in the last five years alone, U.S. fed­eral agen­cies have spent $47.7 bil­lion on goods man­u­fac­tured by for­eign firms.”

He and his Buck­eye col­league, Sen. Sher­rod Brown, a Demo­crat, co-spon­sored the BuyAmer­i­can.gov Act in Jan­uary. The act would order a semi­an­nual re­port from the Cabi­net on who is suc­ceed­ing and who is fail­ing to buy do­mes­tic.

It’s not clear how se­ri­ously the bu­reau­cracy is tak­ing this push.

Agen­cies ap­proached by The Wash­ing­ton Times were ei­ther un­able or un­will­ing to de­scribe what steps they are tak­ing to stay in com­pli­ance with the pres­i­dent’s de­mands.

Even the White House bud­get of­fice, which along with the Gen­eral Ser­vices Ad­min­is­tra­tion was tasked with the web­site ef­fort, wouldn’t com­ment on its ef­forts.

Mr. Port­man and Mr. Brown said the De­fense De­part­ment alone since 2007 had “spent al­most $200 bil­lion on man­u­fac­tured goods made by for­eign com­pa­nies.” But most of that ap­pears to be valid un­der waivers and ex­emp­tions. The de­part­ment’s Ac­qui­si­tion, Tech­nol­ogy and Lo­gis­tics branch told Congress in June that just $5.65 bil­lion of for­eign en­tity pur­chases could not be squared with the laws.

“Tax­payer dol­lars should sup­port Amer­i­can-made prod­ucts, and our fed­eral agen­cies should lead the way in pro­mot­ing U.S. jobs and prod­ucts,” Mr. Brown said.

Not everyone is con­vinced that re­stric­tive pur­chas­ing poli­cies are best for taxpayers. “Buy Amer­i­can” may cush­ion some busi­nesses from com­pe­ti­tion, but it also warps in­ter­na­tional trade and proves ex­pen­sive, many econ­o­mists say.

“It’s re­ally a dou­ble whammy for freemar­keters like my­self,” said Daniel J. Iken­son, a trade an­a­lyst at the Cato Institute. “We know that when you spend your own money you most likely go to a Home De­pot rather than the lo­cal hard­ware store, and the same should be true with govern­ment. It guar­an­tees taxpayers don’t get the big­gest bang for their buck.

Mr. Iken­son ac­knowl­edged that, to the ex­tent they help the govern­ment more closely track spend­ing and abide by the law, the con­gres­sional moves and ex­ec­u­tive orders are good ideas. But the con­cept it­self — the un­der­ly­ing re­quire­ment of “Buy Amer­i­can” — should be jet­ti­soned, he said.

That squares with the elite opin­ion that has been reg­nant for years. In a study on the is­sue by the Bush School of Govern­ment and Public Ser­vice at Texas A&M Univer­sity, schol­ars urged law­mak­ers to find ways to cir­cum­vent the re­quire­ments, al­beit to move slyly lest they anger con­stituen­cies that do ben­e­fit from “Buy Amer­i­can” trade re­stric­tions.

Yet Mr. Trump was elected in 2016 in part be­cause of his re­jec­tion of such set­tled elite think­ing and an in­sis­tence that trade pacts had been bad deals for the U.S. In a Rose Gar­den cer­e­mony this month, he beat the “Buy Amer­i­can” drum again.

“We’re also de­fend­ing the Amer­i­can worker,” Trump said. “We’re tak­ing NAFTA, one of the worst deals ever made in the his­tory of trade, and we are re­do­ing it. And it will be a fair deal for the Amer­i­cans. We lost thou­sands of fac­to­ries and mil­lions of jobs be­cause of NAFTA — thou­sands.”

Fed­eral agen­cies used to put a lot of thought into the is­sue.

In ear­lier decades, the Govern­ment Ac­count­abil­ity Of­fice was reg­u­larly called upon to review agen­cies’ be­hav­ior, such as the Army Corps of En­gi­neers’ sand pur­chases and the Library of Congress’ out­sourc­ing of dig­i­ti­za­tion work to Ja­maica and the Philip­pines.

But the pace of that work ap­pears to have slowed in re­cent years.

Com­pa­nies say the mar­ket is big for those that do claim their prod­ucts are com­pletely or mostly “Made in the USA.”

“Our busi­ness is def­i­nitely on the uptick,” said Glen Brumer, sales direc­tor for Royal Ap­parel, which is based on Long Is­land, New York. “In the past five years, our busi­ness has tripled. Plants that we used to have open three days a week are now run­ning five days a week, some­times with dou­ble shifts, and the park­ing lot at head­quar­ters, which used to be maybe half-full, is now full ev­ery day.”

Mr. Brumer ac­knowl­edged that some of Royal Ap­parel’s thread may be of for­eign ori­gin, but he said the com­pany buys as much Amer­i­can ma­te­rial as pos­si­ble and that all man­u­fac­tur­ing is state­side. For the cloth­ing in­dus­try, which has re­lied on cheap Asian or Latin Amer­i­can la­bor, that is some­thing of an anom­aly.

It’s also not 100 per­cent made in Amer­ica, and busi­nesses say that tar­get is hard to hit.

Wash­ing­ton Al­ley is a men’s cloth­ing and spe­cialty out­fit based in Detroit that also sells other Amer­i­can-made goods. Like Royal Ap­parel, it has the im­pri­matur of the Made in Amer­ica Move­ment, which tries to high­light Amer­i­can out­fits in many fields. Wash­ing­ton Al­ley co-founder Eddy Beyne noted the near im­pos­si­bil­ity of hav­ing ev­ery­thing from raw ma­te­ri­als to fin­ished prod­uct be ex­clu­sively from the U.S.

The last Amer­i­can denim fac­tory, Cone Mills White Oak Plant in Greens­boro, North Carolina, shut­tered on the last day of 2017. That could prove prob­lem­atic for Wash­ing­ton Al­ley’s jeans, which are cur­rently on sale for $99. “And Amer­i­can­made shoes? Those are al­most im­pos­si­ble to find,” Mr. Beyne said.

“If Trump slapped tar­iffs on all the clothes com­ing in from China, yes, it would prob­a­bly help us in terms of our com­pet­i­tive price point,” he said. “But would that be the best thing for the most peo­ple? I don’t think it would.”

In­stead, Mr. Beyne and Mr. Brumer spoke about how they were po­si­tion­ing their com­pa­nies as “Made in the USA,” which they think car­ries a cer­tain ca­chet as well as an un­der­stand­ing that more qual­ity la­bor may be in­volved.

“Stop wast­ing your week­ends at the mall buy­ing what everyone else al­ready has. Buy some­thing of qual­ity that is unique and made with pride in the USA,” pro­claims Wash­ing­ton Al­ley’s web­site.

AS­SO­CI­ATED PRESS

Ford trucks are as­sem­bled in Louisville, Ken­tucky, but that doesn’t mean they are all-Amer­i­can. Man­u­fac­tur­ers say it’s hard to hit the 100 per­cent tar­get, though the mar­ket is big for the “Made in the USA” la­bel.

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