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Don't worry about 'Buy American': Obama

February 18, 2009 10:09 IST

US President Barack Obama tried to reassure foreign countries that there is no reason to be concerned on the 'Buy America' provisions in his $787 economic stimulus bill, which he has signed into law.

In an interview to the Canadian Broadcasting Corporation, on the eve of his first foreign trip, Obama said the United States would abide by its international commitment -- the World Trade Organisation and the North American Free Trade Agreement.

Obama is travelling to Canada on Wednesday -- his first overseas trip as the US President. When told that the international community -- Canada in particular -- is concerned about the Buy America provision of the American Economy Recovery and Reinvestment Act, he said, "I don't think they should be too concerned."

Obama said, "You know, I think that if you look at history one of the most important things during a worldwide recession of the sort that we're seeing now is that each country does not resort to 'beggar thy neighbour' policies, protectionist policies, they can end up further contracting world trade."

Some of the provisions of the stimulus package signed by the US President on Tuesday refer to the purchase of American iron and steel by those companies and for those projects that would be receiving money from the $789 billion stimulus fund.

"My administration is committed to making sure that even as we take steps to strengthen the US economy that we are doing so in a way that actually, over time, will enhance the ability of trading partners, like Canada, to work within our boundaries," Obama said.

A number of countries across the world, in particular several key US trading partners including Canada, Australia and the European Union have expressed concern over the provisions in the stimulus bill, which would give the US steel an advantage over steel from other countries.

Countries like China and India too have voiced its concern, so have a large number of eminent economists including Prof Jagdish Bhagwati from Columbia University.

Obama said: "My expectation is that where you have strong US competitors who can sell products and services, that a lot of governors and mayors are going to want to try to find

US equipment or services, but that we are going to abide by our World Trade Organisation and NAFTA obligations just as we always have.
Lalit K Jha in Washington
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