[CTC] Why ‘Made in America’ Is Stitched Into the Law, but Not the Uniforms

[Arthur Stamoulis]

https://www.nytimes.com/2017/11/24/us/politics/secret-service-uniforms-mexico-trump-trade.html <https://www.nytimes.com/2017/11/24/us/politics/secret-service-uniforms-mexico-trump-trade.html>
 
NEW YORK TIMES
 
Why ‘Made in America’ Is Stitched Into the Law, but Not the Uniforms
By ANA SWANSON <https://www.nytimes.com/by/ana-swanson> NOV. 24, 2017
 
WASHINGTON — President Trump’s push to “buy American” has been a key initiative of his administration, and Mr. Trump speaks frequently about ensuring that the federal government is buying American products.
 
So it might come as a surprise that the uniforms of those Secret Service agents that protect and surround him every day are probably made outside the United States, most likely in Mexico.
 
The United States government has several laws on the books that require the military and other national security agencies to buy from American sources, when possible. But a new report <http://www.gao.gov/assets/690/688512.pdf> from the Government Accountability Office shows how a primary rule covering the Department of Homeland Security, called the Kissell Amendment, has been undercut by a slew of bureaucratic restrictions and obligations required by international trade agreements.
 
As a result, over roughly the past three years, more Secret Service uniforms have been made in Mexico than in any other country — including the United States. The same goes for uniforms procured for Transportation Security Administration workers. The majority of uniforms for Customs and Border Protection and Immigration and Customs Enforcement agents are also made outside the United States, in countries like El Salvador, Honduras, Mexico and Cambodia.
 
“It really doesn’t have much impact at all,” Kimberly Gianopoulos, the director of the Government Accountability Office’s international affairs and trade team, said of the Kissell Amendment.
 
The findings illustrate the difficulties of trying to bend trade rules to benefit domestic industries in a global economy where layers of international agreements can thwart those efforts.
 
Many of the free trade agreements the United States entered into to gain access to markets abroad also prevent governments from discriminating against foreign products. And the global nature of supply chains also makes it difficult to find affordable products manufactured solely within the United States, since a product’s components can cross borders multiple times before completion.
 
According to the report, Homeland Security officials said that they probably could source most of their items from the United States, but that cutting out foreign countries could add 50 to 150 percent to the purchase price — an extra expense taxpayers may not want to bear.
 
Channeling more business to domestic companies is a primary economic goal of the Trump administration. Yet while made-in-America provisions often garner political points, they can be hard to implement.
 
In April, the president signed the “Buy American and Hire American” executive order <https://www.whitehouse.gov/the-press-office/2017/04/18/presidential-executive-order-buy-american-and-hire-american>, which directed federal agencies to review whether they are complying with “buy American” regulations and submit a report on current policies within 220 days. The deadline for that report was Friday.
 
The Trump administration is also pushing for stricter rules surrounding government contracts in its renegotiation of the North American Free Trade Agreement with Canada and Mexico.
 
The United States contends that the current agreement, which gives the three countries relatively unfettered access to government contracts among the nations, is unfair because the United States government spends far more than its neighbors to the north and south. Another Government Accountability Office report this year <http://www.gao.gov/assets/690/682663.pdf> showed that the United States has offered foreign companies more government contracts than it has received from other World Trade Organization members.
 
The United States has proposed limiting the access Canadian and Mexican companies have to federal contracts under Nafta.
 
Nafta partners have protested the proposal, with Canadian officials arguing that it would give Canada and Mexico less access to United States government procurement than much smaller nations, like Bahrain.
 
At the fifth round of Nafta talks in Mexico City this past week <https://www.nytimes.com/2017/11/21/us/politics/nafta-talks.html>, Mexican negotiators called for limiting the government contracts they offer to United States companies to the amount of government contracts that Mexican companies win in the United States. Because Mexican companies win few United States contracts, that would significantly restrict the goods and services American companies supply to the Mexican government.
 
Some economists and industry analysts question whether trade protections aimed at boosting American businesses, including tariffs on imported products, are effective in an age of global competition.
 
Matt Priest, the president of the Footwear Distributors and Retailers of America, said that relatively high trade barriers on imported footwear, like the tariffs charged on imports, have not saved his industry from offshoring. The United States “continues to charge these shoe taxes to protect an industry that isn’t here, and consumers end up footing the bill,” he said.
 
But Scott Paul, the president of the Alliance for American Manufacturing, said that even though protections for American manufacturing might increase costs, taxpayers are typically willing to bear that burden.
 
“There are a lot of places where we could substantially cut costs, but in a lot of cases when you cut costs, you’re cutting jobs as well,” Mr. Paul said. “These companies are the last stand for footwear and apparel jobs in the United States.”
 
The Kissell Amendment, the focus of the Government Accountability Office report, was passed in 2009 to help a domestic textile industry that was reeling. For decades, clothing and textile manufacturing had been slowly moving offshore, to take advantage of lower labor costs in Central America and Asia. The financial crisis accelerated that shift, tipping many factories with razor-thin profit margins into bankruptcy.
 
American textile production plummeted to $46 billion in 2009 from $71 billion in 2006, according to the Government Accountability Office. Between 2005 and 2016, the American apparel, leather and textile manufacturing industry lost a quarter of its workers.
 
Like a much older law, the Berry Amendment, which requires the Department of Defense to buy American food, clothing and other products, the Kissell Amendment tried to help domestic industry by directing the Department of Homeland Security to buy uniforms, body armor, tents and other fabric items from domestic sources.
 
But according to the report, the amendment did not have its intended effect.
 
Question why, and descend into a maze of bureaucracy <http://www.gao.gov/assets/690/688512.pdf>. The policies have numerous exceptions, including for many of the 20 countries with which the United States has free trade agreements. The amendment itself places a floor on the dollar value of contracts, while a World Trade Organization agreement creates a ceiling — meaning the amendment applies to just a narrow slice of contracts, those valued between $150,000 and $191,000.
 
It is a vivid demonstration of why some in the Trump administration criticize trade pacts and the World Trade Organization for staying the hand of the United States government. Of course, the United States entered into these agreements willingly, often at the behest of American companies who were pushing for access to foreign markets.
 
In total, only about 42 percent of uniforms ordered by the Department of Homeland Security between October 2014 and June 2017 came from the United States, according to the report. About 30 percent came from Mexico, and an additional 16 percent came from Honduras and El Salvador.
 
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