The original Buy America act was passed in 1933 and together with the infamous Smoot-Hawley tariff bill caused the rest of the world to enact retaliatory penalties against American goods and companies. The result was that the recession turned into a depression, with Americans suffering worse than countries like the UK, which was able to keep free trade open in the empire.
And, unbelievably, here we are again. The European Union has sent an official warning, that they will take the Americans to the WTO if the clause remains in the bill and Obama signs it into law. The last time the EU took the Americans to the WTO over steel tariffs, the EU won, and proposed retaliatory tariffs so well chosen that Bush caved within a day. It's likely that the EU's retaliatory tariffs will hit the Americans where it hurts - defence contracts that American companies like to bid for, but which are paid for by the European taxpayer. I imagine lots of furious lobbying will now take place by those companies who are fearful of losing out.
Closer to home we have the idiotic wild-cat strikes over IREM refusing to sack it's permanent workforce (that it moves around) in order to hire itinerants. IREM appears to have won the contract in the first place because it delivers projects on time, which probably has something to do with having a permanent workforce (who are being paid Unite rates). They would lose their competitive advantage if they shifted to itinerants. Unite have got this wrong - they should be arguing for British contractors to adopt the same permanent team model that IREM have, which would enable them to do a better job as well as relieving the uncertainty that many itinerant workers suffer under.
Instead the fools at Unite seem to be arguing for discrimination against Italians. Note that there are more Brits living and working in Italy than Italians here (same goes for Spain, Portugal and Germany, with France the numbers net out). And some of them work in construction. I wonder how they are feeling. I sometimes wonder whether these unions have been infiltrated by BNP people. If they have, we should expel them. At least Peter Mandelson has made it clear that we have no plans to alter the existing treaties on freedom of movement. I'm glad he's back in government.
Update 4th Feb 2009: It looks like Obama is already moving in response to the EU complaint. The Times reports that:
Last night Mr Obama gave a strong signal that he would remove the most provocative passages from the Bill.
“I agree that we can’t send a protectionist message,” he said in an interview with Fox TV. “I want to see what kind of language we can work on this issue. I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade.”
But read some of the 130-odd comments on the Times article, mainly from Americans - they don't believe in free-trade at all, and this will be a political hot potato. The American public in general is less in favour of free-trade than the European one - in part I think because Europe does have a comprehensive welfare safety net that the Americans do not, so European individuals don't experience the downside of globalisation quite as acutely as the Americans (those strikers in Lincoln should take a trip stateside to see how lucky they are). Obama needs to move full-speed with healthcare reform and the like, because he won't be able to hold the free-trade line without offering some kind of safety-net.