Use the map below to find out how much taxpayers in your state contribute to federal procurement. Thanks to the Buy American policy in place since the FDR presidency, our tax dollars are supposed to be reinvested to create jobs, spur innovation and help U.S. businesses compete in strategic industries. But unfortunately, there is a huge loophole that disrupts this virtuous cycle. So, billions in our tax dollars get offshored every year. That is because 60 other countries’ goods are treated as if they are American-made thanks to a trade-agreement Buy American waiver.
Large U.S. manufacturers wanted to keep lucrative U.S. government contracts while also offshoring production to low-wage countries. They pushed trade agreement terms that require governments to treat goods, services and suppliers from trade-pact partner countries the same as, say, U.S. goods, services and suppliers. Why the heck would THAT be in a trade agreement? Good question! But unfortunately, these terms are now in all of our corporate-rigged trade deals. And, Presidents have granted trade-pact exceptions to Buy American for 46 countries covered by the World Trade Organization (WTO) Agreement on Government Procurement (AGP) and 14 U.S. Free Trade Agreement partners. This includes Mexico, Japan, Korea, all European Union nations, most of Central America and even Hong Kong. Here is more information on this loophole and how to fix it.
On January 25, 2021, President Biden issued a Buy American Executive Order (EO). It usefully signals that the administration’s goal is to maximize government procurement of goods, products and services produced domestically. With the Biden administration poised to spend significant sums on COVID-19 stimulus and more, including on government procurement, it is vital to first fix the fundamental gaps and loopholes in domestic procurement preferences or the money will leak out in offshored government contracts. The Biden EO does not fix the massive trade-agreement loophole, but it also is just the first step in a process that could translate to real change. Stay tuned! To get involved, join our action alert list here.
The full, estimated data is available in table form here.
*Data is from 2015 Report