'Buy American' plan leads to ire, chaos

WASHINGTON: The "Buy American" plan in US economic stimulus legislation is drawing increasing fire from US trading partners and also has led to confusion as government agencies try to implement the strategy. Ironically, the measure is backfiring on some US firms that are being disqualified from contracts if they use non-American materials, and making it difficult to determine who can qualify, say some business leaders.

The plan was included by President Barack Obama's administration in the nearly $800 billion US stimulus package adopted earlier this year that required projects funded with stimulus money to use only US-made steel, iron and manufactured goods.Singapore was the latest among key US allies such as Canada and Japan to express concern over the restriction, warning that it could "beget other actions and then cause the situation to snowball in the wrong direction."

The Buy American requirements were already facing retaliation from Canada and could cause job losses and decline in trade, essential to jolting the world's largest economy from prolonged recession, warned the US Chamber of Commerce, a top business lobby of more than three million businessesand groups.