TPP Government Procurement Negotiations: Buy American Policy Banned, a Net Loss for the U.S.
By Public Citizen's Global Trade Watch
Negotiators from the Office of the U.S. Trade Representative (USTR) are currently engaged with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam in a closed-door process that has been branded as a “trade” negotiation on a possible TransPacific Partnership (TPP) agreement. But the issues under discussion extend far beyond tariffs and other traditional trade matters. Under the proposed framework, U.S. states and the federal government would be obliged to bring our existing and future domestic policies into compliance with expansive norms set forth in 29 proposed TPP chapters, including one imposing limits on government procurement policy. Failure to conform our domestic policies to these terms would subject the U.S. government to lawsuits before dispute resolution tribunals empowered to authorize trade sanctions against the United States until our policies are changed. Also, any “investor” that happens to be incorporated in one of these countries would be empowered to launch its own extra-judicial attack on our domestic laws in World Bank and UN arbitral tribunals with respect to changes to procurement contracts with the U.S. federal government.
The TPP’s procurement chapter would require that all firms operating in any signatory country be provided equal access as domestic firms to U.S. government procurement contracts over a certain dollar threshold. To implement this “national treatment” requirement, the United States would agree to waive Buy American procurement policies for all firms operating in the TPP countries.
Some corporate TPP proponents argue that this is good for the United States because these rules would apply to all signatory countries, so U.S. firms would be able to bid on procurement contracts in other countries on a national treatment basis. It is a ridiculous notion that new access for some U.S. companies to bid on contracts in the TPP countries is a good trade-off for waiving Buy American preferences on U.S. procurement: Taking even the most favorable cut on other countries’ markets, the total U.S. procurement market is significantly larger than the combined procurement market of all other TPP negotiating parties: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.