"Buy America"

  The battered American economy faces numerous challenges.  This summer, Congress began the process of calling attention to what many believe to be one of the most serious: the enormous and growing trade imbalance.

     Rep. Brian Bilbray (R-Ca.) has introduced H. Res. 705, which calls for the designation of a “Buy America” week.  According to Bilbray, the 2011 U.S. global trade deficit in goods was $726,700,000,000, representing a stunning $100,000,000,000 increase from 2010. The latest report from the federal government notes that there was $42.9 billion trade deficit in June 2012 alone, the last month for which data is available.  $27.4 billion of the deficit was due to commerce with China, an increase of $1.4 billion from May.  The European Union accounted for another $8.4 billion, and Japan represented another $6 billion.   

     The results of this harsh imbalance are extensive.  Domestic manufacturing currently accounts for only 9% of the U.S. labor force, down from 13% in 2000.  America lost approximately 5,200,000 factory jobs during that period.  There are little prospects for improvement.  President Obama’s cuts in the two manufacturing areas that are almost exclusively American—defense and space—mean that this crisis will get even worse.

     While there is disagreement on how to solve the problem, there is a general consensus that it is a threat to American prosperity.  According to the Cato Institute’s trade analyst Daniel Griswoki, “A nearly universal consensus prevails that the goal of U.S. trade policy should be to promote exports over imports, and that rising imports and trade deficits are bad for economic growth and employment.”

     Alan Uke, an entrepreneur from San Diego, recently wrote a book, “Buying America Back,” detailing the crisis, and what must be done to address it. He outlines the threat to the nation.  Consumer spending comprises 70% of the U.S. economy, and 60% of all manufactured goods purchased by consumers are imported.  The American trade deficit is the worst of any industrialized nation, accounting for 4% of our entire Gross Domestic Product.  Uke estimates that to end the high unemployment levels, which have risen sharply under the Obama administration, a healthy  manufacturing employment section, providing jobs for about 20% of the labor force,  is vital.

     A growing response—a “Buy America” movement—is beginning to take shape.   His basic concept is that consumers aren’t even aware that the products they purchased weren’t made in the U.S.A. His solution doesn’t embrace concepts like tariffs or protectionism.  Instead, he believes that products sold should be clearly labeled to indicate where they were produced.  It’s an idea, he believes, that has already proven valuable in marketing healthier foods.  Another analogy could be drawn to items such as “conflict diamonds.”

   His solution calls for mandatory labeling on all consumer products containing information detailing:

·   ·       The percent content by country of origin to a reasonable accuracy;

·   ·       The present U.S. trade ratio with that country; and

·   ·       The manufacturer’s nationality.

     This information would be displayed on the product’s packaging, on catalogues and web sites where the item is offered for sale, and on the item itself, as it is displayed for sale. 

     Uke’s concept has received broad bipartisan support, but it remains to be seen whether elected officials, who seem to pay more attention to this problem during election years, will continue their concentration after November.