Buy American Provisions In Stimulus Measure Will Benefit Textiles

Textile industry representatives in Washington believe two “Buy American” provisions in the
economic stimulus package will preserve or create thousands of jobs in the industry.

The final version of the legislation includes the Kissell Amendment, sponsored by freshman
Congressman Larry Kissell, D-N.C., that requires the Transportation Security Administration (TSA)
and the Coast Guard to purchase domestically produced uniforms, and a broader “Buy American”
measure requires US sourcing for iron and steel and manufactured products. There are conditions
attached to both measures. “Buy American” regulations will apply if they do not violate any US
obligations under international trade agreements or if it can be shown that the products needed are
not available from domestic sources. Supporters of the legislation insist that it does not violate
any such agreements. In addition, the iron and steel requirement will not apply if the domestic
goods would increase the overall cost of a construction project by more than 25 percent.

Karl Spilhaus, president of the National Textile Association, said the long-sought
requirement for the Department of Homeland Security (DHS) to purchase domestic goods can be
expanded to include agencies other than TSA and the Coast Guard to include Customs and Border
Protection, the Secret Service, Federal Emergency Management Agency and the US Citizenship and
Immigration Services.

A statement by a number of textile trade associations and UNITE HERE says the reason the
Kissell Amendment applies only to TSA and Coast Guard purchases is that the United States is a
signatory to the World Trade Organization’s Agreement on Government Procurement that prohibits
those types of restrictions except where exceptions are made. The United States has the option to
exempt agencies critical to national security, and it has done so with respect to TSA and the Coast
Guard. The Kissell Amendment would allow the Obama administration to exempt other DHS agencies
should it desire to do so.

As the stimulus bill cleared Congress, Auggie Tantillo, executive director  of the
American Manufacturing Trade Action Coalition, said that for every $100 million spent annually
under the Kissell Amendment, 5,000 jobs in the textile industry will be preserved or created.
Addressing the impact of the broader “Buy American” provision, Scott Paul, executive director of
the Alliance for American Manufacturing, cited a recent study that says an estimated 33-percent
more manufacturing jobs will be created with exclusively domestic sourcing of iron, steel and
manufactured materials. Cass Johnson, president of the National Council of Textile Organizations,
said that section of the legislation would benefit the textile industry because of a “substantial
amount” of geosynthetics and other textile products used in highway construction.

February 17, 2009