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EU challenges ‘Buy American’ clause

By Naved Akhtar     Feb 3, 2009 in Business
The European Commission is challenging the ‘Buy American’ clause in the $800 billion (£567 billion) economic rescue plan that is under discussion in Congress.
As part of the plan, this clause will ensure that only US steel, iron and manufactured goods will be funded by the bill. The EU has said that they will launch a complaint with the World Trade Organisation (WTO) if the clause remains in the bill. EU Trade spokesman told the BBC:
“There isn't a great deal of scope for doing much more, but if America went ahead and did this we would have to take it up with the World Trade Organization.”
John Burton, EU ambassador to Washington has warned that this clause would provoke protectionism, trigger retaliatory moves and erode global leadership on trade. He told the BBC:
"We regard this legislation as setting a very dangerous precedent at a time when the world is facing a global economic crisis."
The ‘Buy American’ clause of the stimulus bill is currently is currently being reviewed by the White House with Vice President, Joe Biden stating last week that it was legitimate to have some part of it in the final measure. The Republicans have also cautioned that the 'Buy American' measure could start trade wars. Mr Obama is hoping the bill be passed quickly but it is unlikely that the bill will pass without Republican support.
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