While Republican presidential nominee Sen. John McCain (R-Ariz.) has made clear his disdain for “Buy America” provisions limiting foreign content of defense systems, Democratic hopeful Sen. Barack Obama’s (D-Ill.) stance is less apparent.
Obama’s campaign said the Illinois Democrat rejects calls to loosen “Buy America” requirements for government contracts. Yet observers on both sides of the debate said they just don’t know if a President Obama would lean more towards unions who support further limiting foreign participation in Pentagon contracts or towards a more free-trade stance.
The “Buy America” issue has the potential to be a hot one on the presidential campaign trail, considering the current acrimonious battle over the Air Force’s aerial refueling tanker contract competition between Boeing [BA] and a team made up of Northrop Grumman [NOC] and European Aeronautic Defence and Space Co. (EADS).
Some Boeing tanker backers in Congress, angry over an initial contract award not in their favor, have referred to the Northrop Grumman team’s proposed aircraft as the “French tanker” and called for further restricting Buy America requirements, which in some cases calls for treating companies in allied countries as part of the U.S. industrial base. Because the winner of a new tanker competition may not be announced until after the new president takes office, it places the matter on the future commander in chief’s radar.
However, “Buy America” rules are not addressed in the new party platforms Republican delegates adopted at their convention in St. Paul, Minn., last week and Democrats approved at their convention in Denver the previous week. And it appears unlikely the “Buy America” debate will become a national-level presidential campaign issue, pundits say.
On the tanker issue, McCain is viewed as more aligned with the Northrop Grumman-EADS tanker bid, in part because of his past work to halt a corrupt deal for Boeing to lease the tankers to the Pentagon. Obama is seen by some observers as eager to support Boeing’s bid, and some of his surrogates suggested as much at the Democratic convention.
On the broader “Buy America” issue, McCain has tried to limit such requirements, saying they have cost the Pentagon and taxpayers billions of dollars.
“I firmly object to all ‘Buy America’ restrictions, as they represent gross examples of protectionist trade policy,” McCain said in 2005 on the Senate floor. “From a philosophical point of view, I oppose such policies because free trade is an important element in improving relations among all nations, which then improves the security of our nation. Furthermore, as a fiscal conservative, I want to ensure our government gets the best deal for taxpayers, and with a Buy American restriction that cannot be guaranteed.”
Meanwhile, observers stop short of painting Obama clearly on the opposite side of the “Buy America” debate from McCain.
“I’ve looked at just about everything (Obama) has said about the economy…and I simply have not seen a piece of commentary on the need to increase the current ‘Buy America’ provisions in the defense production act,” said Alan Tonelson, a research fellow with the U.S. Business and Industry Council, a nonpartisan group that supports strong “Buy America” rules.
While he said Obama has “shown signs of understanding to need to overhaul U.S. trade policy,” he added “many details have yet to be filled in, and he’s had difficulty devoting attention consistently to trade policy issues.”
“I think that at this point all we can say is that a vote for Obama would be a vote for a leader who is not a strident opponent of strong ‘Buy America’ provisions for U.S. defense procurement,” Tonelson said in an interview.
Obama spokeswoman Wendy Morigi said her boss rejects calls to loosen “Buy America” requirements for government contracts.
“Barack Obama understands the importance of transparent and fair competition for defense contracts that ensures the highest quality products and services for the American military,” Morigi said via e-mail. “However, he believes the Buy America provisions in our procurement laws serve an important function to protect key U.S. technologies and capabilities, and opposes the Bush-McCain efforts to gut these important provisions.”
The Obama campaign ran advertisements last month in Wisconsin and Pennsylvania criticizing McCain’s past opposition to a requirement that the Secret Service buy American-made motorcycles. The campaign distributed stickers and flyers in Pennsylvania that declare “Buy American…Vote for Barack Obama.”
Richard Aboulafia, the vice president of analysis at the Teal Group who has advised international defense contractors, agreed Obama’s “Buy America” views are not known. That’s “partly because of lack of voting record, partly because of the things you have to say in some districts to get votes,” he said.
“There are factions of both parties that are inclined to be nativist, but those factions appear to be somewhat eclipsed,” Aboulafia said in an interview. “Obama is more likely to pursue a relatively Clintonesque free-trade policy. But he’s (also) going to have to message to the unions and to his political allies that he’ll do what he can for them.”
Aboulafia argued that while it’s “easy to talk ‘Buy America,’ because the foxes have gotten into the hen house a very long time ago,” that you “can’t go back in time with trade.”
“And, more importantly for our industry, we have a lot of existing programs,” he said. “We have a lot of globalization through acquisition.”
On the other side of the debate, Tonelson argues McCain’s anti-“Buy America” positions have “weakened the defense manufacturing base in many important ways.”
In Congress, outspoken “Buy America” advocate Rep. Duncan Hunter (R-Calif.) is retiring this year.
Hunter tried to increase the required domestic content levels of U.S. military systems during the last major congressional debate on the issue in 2003, to the disdain of some major U.S. defense contractors.
It remains to be seen if a new “Buy America” champion will emerge on Capitol Hill, Tonelson said.