This is the Cato Daily Podcast for Tuesday, February 10th, 2009. I'm Caleb Brown.

My American is a protectionist buzzword, especially in President Obama's stimulus plan, but it's

nothing new and the bluster about rising protectionism may be a tempest in a

teapot. So says Dan Eekinson, Associate Director of the Cato Institute's Center for Trade Policy Studies.

By American Provisions are nothing new. They've been on the books since 1933. All government procurement is doled out in a

way that favors U.S. suppliers and U.S. construction firms. But we also have waivers. If the administration feels it's not in the public

interest or if the cost of using U.S. suppliers is too high. He can entertain bids. The U.S. agency can entertain

bids from foreigners. The general by American provision has a reasonable cost test and it says you have to use domestic

domestically manufactured products unless a foreign bid comes in at 6% or below the price of the U.S. bid, in which case you can therefore use the foreign

bid.

But on highway projects, Department of Transportation projects, that cost threshold is much different.

It says you can't go to a foreigner unless the cost of the total project is going to increase

by 25% or more by using domestic supplies.

That's an enormous threshold and it is basically cordoned off the market for transportation projects

just to U.S. producers.

It is that provision, that more stringent provision

that is being applied in the spending bill

before Congress right now. All of the Buy American provisions have been

liberalized over the years such that most of our major trading partners are

granted waivers under the Trade Agreements Act of 1979, we authorized the President to grant a public interest

waiver. The spending bill provisions would run roughshod

over those waivers. At least that was the case until two days ago. It took a week

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