Recovery Act Update - U.S. Stimulus: "Buy American" - PRC Stimulus: "Buy Chinese" - Canada and WTO: "Not Pleased"


On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), known popularly by a variety of names, including “ARRA,” the “Recovery Act,” and the “Stimulus Act.” We have previously discussed many of the provisions relating to the Recovery Act at some length, especially the implementing regulations that were recently published this spring.

Now that we have had a chance to see how the policies behind the Recovery Act are unfolding in reality (and there are advocates and detractors on all sides of this debate), we thought it might be interesting to review how the Buy American provision of the Recovery Act (Section 1605) is impacting U.S. relations with its international trade partners. In brief, many countries remain cautiously optimistic about U.S. Buy American practices under the Act, while other countries (such as Canada) seem to be gearing up for a trade war. This latter development should not, we think, be surprising -- a protectionist reaction on the part of at least some of our trading partners seemed likely when the "Buy American" provision was first proposed in January 2009.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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