While the world has focused on the President's tariffs surrounding his April 2nd announcement, the America First Trade Policy report delivered to the President the same week largely flew under the radar. Let's take a look at how the report addresses one issue I have been working on for years: the impact of trade agreements on "Buy America" policy and American manufacturing.
The report is critical of the World Trade Organization's Government Procurement Agreement (GPA), which gives companies in nearly 50 countries the ability to compete for U.S. government contracts as if they were American companies. While American companies get the same treatment when competing for government procurement in GPA countries, the report points out that American companies lose more than they gain. The report cites a GAO investigation requested by my former boss, Senator Baldwin, that found that the United States opened up twice as much procurement to foreign firms as the next five largest GPA parties combined (the EU, Japan, South Korea, Norway, and Canada).
The report calls for the U.S. to modify or renegotiate the GPA, and if unsuccessful, withdraw.
The report is also critical of Reciprocal Defense Procurement Agreements--bilateral agreements that waive U.S. domestic preferences for Department of Defense contracts--and calls for a review.
What does this mean for American contractors? Reforms or withdrawal from the WTO GPA would likely limit foreign competition and create major opportunities for small and medium-sized businesses that rely on the U.S. procurement market. Small and medium-sized DoD contractors also stand to benefit from potential reforms to the DoD agreements that seek to support American manufacturing. On the other hand, businesses that contract with foreign governments could see diminished access to those procurement markets.
For more information on how these agreements work and what reforms could look like, feel free to reach out.
Add comment
Comments