Fearing a new provision in a bill recently passed in the U.S. House of Representatives too closely resembles a "Buy American" clause, Japan has sent a letter to the U.S. asking a U.S. trade representative to have the provision removed before it become law.
Reuters spoke with an official from Japan's foreign ministry who said the letter, sent from Japan's U.S. Ambassador Ichiro Fujisaki to U.S. Trade Representative Ron Kirk, expresses the nation's concerns over a provision in an appropriations bill for energy and water development. The provision proclaims federal funding should not be used to buy cars made by companies other than the Chrysler, Ford, and General Motors.
"If it limits it to just three, this violates the World Trade Organizations fundamental principle of non-discrimination," said the official, who did not give her name to Reuters. "Taking into consideration the flow from the previous stimulus package, we are concerned that there will be more moves to promote purchasing of American products."
The stimulus bill requires most public works projects using government funding to use U.S.-made steel, iron, and manufactured goods.
The provision in the energy and water appropriation bill for fiscal year 2010, which starts on October 1, mandates that "none of the funds made available in this Act may be used to purchase passenger motor vehicles" other than those manufactured by Chrysler, Ford or GM.
John Bruton, European Ambassador to the United States, voiced similar concerns earlier this week, stating that a "troubling protectionist provision can be found" in the House bill. A similar bill will be debated in the Senate after the summer recess that ends September 7.
Sources: iStockAnalyst, Reuters