Discrimination in Government Procurement of Foreign Goods in the U. S. and Western Europe

Abstract

This study seeks to identify and measure the extent of discrimination against foreign goods that is indicated by the purchasing practices of governments of a number of industrial nations. The Buy American policy has received considerable attention internationally as an overt act of discrimination on the part of U.S. government against foreign goods. Yet it should be recognized at the outset that the U.S. policy is unique only because it is explicitly set in the law. The U.S. government's Buy American policy and similar practices by other governments involve a systematic attempt to discriminate against foreign suppliers and in favor of domestic producers of simiar goods.1 The Buy American act directs government agencies to purchase goods for use in the U.S. from domestic suppliers except when a) the items are unavailable in the U.S. in sufficient quantity and/or quality, or b) the offered price of the domestic goods exceeds the delivered foreign price of the same goods by more than 6 percent (12 percent if the domestic items are supplied by small enterprises or are produced in areas where substantial unemployment prevails). In July 1962, the Department of Defense, acting on the basis of the deterioration in the U.S.