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'Buy American' legislation draws fire

A tech trade group calls measure forcing Homeland Security to buy products made mainly in America a "lose-lose" proposition.

Adding fuel to the debate over U.S.-international trade, a tech industry group is blasting "Buy American" legislation passed by the House of Representatives this week.

On Friday, the Information Technology Association of America called the measure bad security policy and bad economic policy. The legislation, an amendment to the Homeland Security Authorization Act, would force the Department of Homeland Security to buy products mostly made in America.

The legislation was authored by Rep. Don Manzullo, an Illinois Republican, and passed by the House on Wednesday. It would require more than 50 percent of the components in any end product procured by the department to be mined, produced or manufactured inside the United States.

"With this purchasing prohibition, I guess (the department) will have to learn to do without computers and cell phones," ITAA President Harris Miller said in a statement. "I cannot think of a single U.S. manufacturer that could meet this 50 percent threshold for these devices, and I doubt that those charged with protecting our safety here at home can either."

Manzullo said the measure is in the tradition of the Buy American Act, passed during the Great Depression. "When U.S. taxpayers' dollars are spent, we must make sure the federal government is buying as much of their goods and services possible from U.S. manufacturers," Manzullo said in a statement Wednesday. "This legislation preserves the intent of the Buy American Act while helping to restore the U.S. industrial base and creating jobs for Americans."

According to Manzullo, the Buy American Act has been undermined by pacts between the United States and other countries that allow the substitution of foreign components for U.S. ones. The Pentagon, Manzullo said, has agreements with 21 countries that waive the Act. Manzullo's amendment would prevent the Department of Homeland Security from waiving the 50 percent "Buy American" content restrictions like the Pentagon has done without approval from Congress.

Conflict over global trade has resurfaced in the past few years, coinciding with the growing shipment of white-collar jobs like programming to lower-wage nations. In the past week or so, tensions over commerce have risen between China and the United States. China has been accused of subsidizing its exports by pegging its yuan to the dollar, resulting in a currency value that is artificially low.

As that trade dispute simmers, the U.S. tech industry is keen to see changes by the Asian giant--but opinions vary on how hard to push.

In the short run, at least, U.S. techies may be more the in global trade arrangements. A report last year sponsored by ITAA on offshore outsourcing of software and IT services indicated that sacrifices by American IT workers would result in an improved U.S. economy overall.

According to ITAA's Miller, the latest "Buy American" legislation would invite similar restrictions from other countries and raise the government's cost of doing business. "This legislation puts politics in front of common sense in combating terrorist threats. At the same time, it sends a signal to our trading partners that protectionism trumps global trade," Miller said in a statement. "That's a lose-lose proposition for the nation."