When Washington enacted its $787bn (€580bn, £509bn) stimulus bill in February with Buy American provisions, the law promised – at the urging of President Barack Obama – that the language “shall be applied in a manner consistent with US obligations under international agreements”. That is not happening.
When the Group of 20 leading nations met in London in April, their communiqué – at the urging of Mr Obama – declared they would “refrain from raising new barriers to investment or to trade in goods and services”. The US seems to be violating that pledge, too, in its rescue efforts for General Motors and Chrysler. After months of its deflecting protectionist demands in the face of declining output and soaring unemployment, protectionism is now on the rise.
Under the North American Free Trade Agreement (Nafta) and the government procurement agreement (GPA) of the World Trade Organisation, US government contracts are not allowed to discriminate against suppliers or parts from GPA signatories or from Canada or Mexico.