One of the purposes of blogs is to provide multiple viewpoints and perspectives on key issues. In this post, I’m going to alert my readers that I’m going to be providing a counter-argument to prevailing thought. I’m also providing a response to another blog commentary.
President Obama will be signing the U.S. $787 billion “stimulus bill” today in Denver. The setting, the Denver Museum of Nature & Science, is meant to underscore the investments the new law will make in “green” energy-related jobs.
One item that made the final version of the bill, despite opposition, was a “Buy American” provision. Over on the blog Logistics Viewpoints, ARC analyst Adrain Gonzalez penned a post that reinforces the argument that a “Buy American” provision could indeed spark international trade wars. His argument is that before the economy tanked, some companies were already taking another look at the costs and benefits of having long, global supply chains. So why add more political fuel to the fires of global trade?
In normal times, I would tend to wholeheartedly agree with Adrian’s viewpoint, since I respect his views as a talented analyst. In fact, while I was traveling in Vancouver a few weeks back, I noted some of the initial reaction I had read and heard from the local media as well as my Canadian hosts.
But these are indeed extraordinary times. Yes, many U.S. companies now rely on global markets to sell their products. But let’s no forget that many of these companies were forced to gain access to these new markets through local partners or entities. Countries like China, India, or Russia were not about to have foreign companies access their local markets without some benefit to the host country. And why not!
An area that should concern many Americans is the state of the infrastructure of key existing U.S. supply chains, allowing certain U.S. suppliers and trading partners to literally become non-competitive in our global world. You can observe this happening in automotive, high-tech, and other U.S. hosted supply chain environments.
There’s no denying that U.S. multi-national companies have outsourced product design, manufacturing, distribution and logistics for dual purposes, lowest costs, as well as access to these new markets. If the U.S. is going to be competitive in the so-called “green industries” of alternative energy and other emerging technology, it will have to exhibit world-class supply chain capabilities in all dimensions.
So, for now, I’m coming down on the side of “Buy American”. My argument is that the “stimulus” should foster not only job creation, but infrastructure capability. The U.S. has a vast market, and that market needs confidence. The global economy presents new emerging markets, but other countries in spite of their external rhetoric, protect their own companies and infrastructure. Its time for the U.S. to play this game, just like other countries. At least in this stimulus plan, let’s rebuild U.S. supply chain capability.
What’s your view? Should the U.S. be investing in its own capabilities and competiveness?