We urge to the committee to support this legislation, which would help preserve good-paying manufacturing jobs in Maine and elsewhere in the United States by helping our businesses and contractors compete on a level playing field with foreign entities that receive unfair assistance from their governments.
Senator Davis, Representative Martin, and members of the Joint Standing Committee on State and Local Government. The Maine Center for Economy Policy offers its support for LDs 895 and 956, “An Act To Help Maine Manufacturing “ and “An Act To Establish the Maine Buy America and Build Maine Act.”
Unfair foreign trade practices, such as currency manipulation and government subsidies, put American companies at a disadvantage. One means of countering these is to offer preferences to American businesses and contractors for state procurement processes. State and federal governments are large purchasers of goods and services, and their purchasing policies can increase demand for American-made products. This can make these homegrown companies more competitive, and in turn create and support jobs in Maine while boosting state revenues.
“Buy American” policies have a long history, having first been introduced by the federal government in 1933 to support domestic manufacturing during the Great Depression. Maine already complies with these federal requirements in regard to transportation contracts. In addition, Governor LePage signed a 2012 executive order that instructs state agencies to consider a bidder’s “economic impact on the Maine economy and state revenues.” But the state’s current policy does not explicitly favor domestic goods and services over foreign ones, as this bill does.[1]
“Buy American” provisions are preferred over those which explicitly favor local or state-based entities, because the latter encourage trade competition between the states. Indeed, Maine’s procurement and bidding processes already impose a penalty on bidders from states with “buy local” laws, equivalent to the preference they receive in their home state.[2] We would encourage the committee to focus on “Buy American” over “Buy Maine.”
“Buy American” laws are widely popular, and enjoy broad bipartisan support. Eighty percent of U.S. voters support “spending state and federal tax dollars on American-made goods whenever possible,” while 67% of voters are “strongly in favor.”[3] Maine has already benefited in limited ways from such provisions in federal law, with New Balance footwear winning a contract to supply the U.S. Army with athletic shoes, and an Auburn-based manufacturer selected to supply the U.S. Olympic team in 2016.
We believe Maine state and local governments should follow suit and purchase footwear, foodstuffs, paper, and other materials produced locally or elsewhere in the United States. American steel manufacturers, for example, depend greatly on “buy America” provisions in transportation infrastructure spending. The relatively small increased cost of “buying American” is returned through the support of good-paying manufacturing jobs in Maine.
This legislation need not be onerous to Maine state agencies. The state’s purchasing division already contracts with a substantial number of businesses selling American-made products, including footwear.[4] A “Buy American” law could be implemented gradually and smoothly.
“Buy America” legislation will not unduly impact our trade with Canada, Maine’s largest import and export partner, because free trade agreements with countries like Canada already provide for businesses there to be given equal consideration with American manufacturers and contractors. This legislation would, however, address the imbalance faced by American manufacturers when dealing with businesses from countries like China, where governments are known to put a finger on the scales in favor of their own businesses.
We urge to the committee to support this legislation, which would help preserve good-paying manufacturing jobs in Maine and elsewhere in the United States by helping our businesses and contractors compete on a level playing field with foreign entities that receive unfair assistance from their governments.
Please feel free to contact us with any questions.
Notes:
[1] http://www.maine.gov/tools/whatsnew/index.php?topic=Gov_Executive_Orders&id=377408&v=article2011
[2] Maine Revised Statutes, Ch.155, §1825-B, sub-section 9. http://www.mainelegislature.org/legis/statutes/5/title5sec1825-B.html
[3] http://www.americanmanufacturing.org/page/-/uploads/resources/AAM_Poll2014_FactSheet.pdf
[4] http://www.maine.gov/purchases/contracts/pals.html
[pdf-embedder url=”https://www.mecep.org/wp-content/uploads/2017/03/LD-895_956_Buy-American_03-27-17.pdf” title=”LD 895_956_Buy American_03-27-17″]
