Don’t Buy Into ‘Buy American’ : Vote ‘No’ on inward and protectionist Los Angeles City Charter Amendment G

The Los Angeles City Council has succeeded in placing its “Buy American” amendment on the June 2 ballot. The measure is ill-conceived. As a 1 major world port and trading center, Los Angeles cannot afford to turn inward and protectionist. The Times recommends against Amendment G.

The amendment would give preference to firms in California and Los Angeles County in bidding for city contracts. It would also establish a “minimum domestic content” requirement for city purchases. The amendment could limit the number of eligible bidders and could drive up costs when the city, deep in the red, needs flexibility in its choices.

The City Council hastily drafted the amendment as a political shortcut to quell public uproar over the mishandling of a contract earlier this year. The Los Angeles County Transportation Commission had awarded a $128-million contract to a Japanese firm without much public discussion or explanation of why an American firm’s lower bid was rejected in a time of recession and high joblessness.

The deal was called off because of the public protest, but then the debate disintegrated into Japan-bashing. “Buy American” campaigns were suddenly in vogue. The council bought into the theme without doing enough homework.

In a global economy, it is difficult to discern precisely what is made in America. Choosing an American firm doesn’t guarantee a product made in the United States. Take the case of Greece, N.Y., which bought a machine from Deere & Co. of Illinois instead of one produced by Komatsu American Industry Corp., a Japanese-owned firm; to the town’s chagrin, the Deere machine turned out to be made in Japan and the Komatsu in the United States.

If Amendment G passes, Los Angeles might well have to add a costly new layer of bureaucracy to determine what constitutes “American” goods and services. That would be a ridiculous waste of time and money. Better to have city contracts require all bidders to come up with proposals that give subcontracting work to local firms, creating jobs in the private sector.

Finally, the Buy American amendment would sanction municipal protectionism. That would be contrary to the city’s long-term interests in international trade and investment. Hundreds of millions of dollars worth of finished and unfinished goods flow annually through the ports of Los Angeles and Long Beach en route to other states or destinations in Asia and the Pacific. A protectionist city mood would send the wrong signal and be counterproductive to U.S. efforts to promote greater free trade.

The Buy American charter amendment is a no-win proposition. It is specious public policy. Voters should reject Amendment G on June 2.