One of the key points of the policies is that all steel, iron, and manufactured goods for construction purposes or any other related purpose should come from the United States’ manufacturing industries (Goehle, 1989). The Buy American laid down restrictions should conform to the United States’ obligations through existing international treaties such as the Free Trade Agreements and the World Trade Organization Government Procurement Agreement.
Apart from the equitable treatment of the foreign goods, the policy has a requirement within it that allow the nation also to purchase the construction materials (Hufbauer, 2013).
In the first assignment, the New Company that builds navigation systems for drone and all the regular airplanes that are taking place for all the government and public enterprises was clearly discussed. The New Company is an aerodynamic defense contractor that is carrying out a lot of research and development despite the high competition that it faces from Vector Cal. The company is still ahead of Vector Cal because it utilizes the Buy American Act and all the Buy American Requirements are used on the other side to the advantage of the company. This puts American defense department to work hard and catapults all the people to the lime light.
Buy America requirements are inclusive of the applicability, definitions, general requirements, waivers, application of waivers and the state Buy America provisions. Rights of parties, sanctions, intentional violations, grantee responsibility, investigation procedures, failure to comply with the certificate and the certification requirement for procurement of buses are all Buy America Requirements. The Buy American requirement is a type of an act that was established in 1933 and signed by president Hoover. Buy American Requirements is one of the United States Code Section that is well known in the provision of the rule making authority in the whole continent through the use of the public laws and the presidential documents. This act applies to all the US federal government agency that do not apply to any given services in the whole state. Most of the municipalities of the state, are inclusive of similar geographic production requirements in most of their procurement legislation. A price preferences is created by the Buy American Requirements that is aimed at favoring all the domestic end products from all the American firms in the federal government. Under this requirement, the expectations will definitely be made by the head of the federal government mostly when the use of all the domestic products is inconsistent with the public interest and is also likely to increase the cost of the overall project with a high percentage. The Code of Federal Regulation (CFR) is also applicable in the Buy American Requirement that will define the building work of the United States government entity by means of the public works. CFR is comprised of steel that is an alloy of carbon and that considers all the manufactured goods in the whole state that might be of high use when combined with raw materials to create a qualitatively quality material that is different from the original one. CFR has to be made aware of all the goods produced in United States or those imported from other countries with the aim of bettering their quality of production. There are expectations of the waiver that are evident through the use of Iron and Steel and the component that is evident in the manufactured goods. All the United States obligations under international agreements are also categorized under the Buy America Requirement of the Waiver.
Both Vector Cal And New Company is likely to benefit from the Buy American Requirements since they will be able to have a ready market for their products. In return, these companies will have a high bargaining power over their customers, resulting in more profits. Consumers also not need to spend extra time or money so as to find and buy the American made products (Kennedy, 2011). Buy American requirement also promotes the purchases of only American products that, in this case, promote the growth of local industries such as Vector Cal. They buy American requirement will help benefit these two companies by providing them with autonomy they need to penetrate the market. The legal protection is very important in ensuring that the businesses do not suffer from poor operating environment or suffer from unscrupulous dealers. The buy American requirement is a step in the right direction that is meant to ensure that businesses are legally protected from any forces that might interfere with their operations.
To some extent, the buy American are contradictory to the American capitalistic ethos of capitalism that demands that customers and business are free to sell or buy from wherever they wish. This requirement is limiting the freedoms of the American consumers by forcing them to buy from particular local outlets. The U.S. espouses a free market ideology such that the price of everything, the value of nothing. However, the measure does not take care of the changes in the product’s quality or the value the labor that is not yet paid (Hufbauer, 2013). The buy American requirements tend to dictate the forces of demand and supply by restricting other firms from other places from enjoying the benefits that comes with the free market. In this regard, the external companies that would also want to take the advantage of the American market can find themselves on the wrong side of economics since they would not be able to enjoy the free market. This would be unfair to other companies that come from other countries since their market does not restrict the sale of goods and services by the American companies.
Towards the economy, the Buy American Requirement aims to reduce administrative costs thus makes businesses cost effective. In addition, the Buy American Requirements helps to improve opportunities for small, small disadvantaged, women-owned and veteran-owned, HUB Zone. This policy instrument also promotes efficiency in doing business and promotes economic development. To the American companies, the buy American requirements are important to the American companies since it enables them to take advantage of their home market with limited competition on the external market. In this regard, the local companies are shielded from the external competition that would bring unnecessary competition in the market. The buy American requirement would help the preservation of the rich American market to the domestic companies, which would in turn benefit from their local market as they also seek other opportunities in other countries. The growth of the domestic companies within the American market would lead to increase in the taxable income and more money for the government. In addition, the growth of the local based companies would lead to more job creation to the local population, leading to the overall growth in the American economy.
Buy American enhance the support for American manufacturers and the workers, their working conditions, and also the child labor laws. The reason behind is that foreign labor standards in most countries do not provide for safe working conditions. The policy also contributes to the growth of the American economy through buying of the American home made goods. The rationale for this is that shipped jobs always go forever with no element of returning in the near future (Kennedy, 2011). Since goods produced from the United States are environmentally friendly as compared to other countries that produce the same commodity, buying an American good in this instance promotes the conservation of the natural environment. In this instance, buying the American home made goods promotes the fair payment of the workers for what they deserve after their service to the nation. Since the country cannot manufacture all goods at ago, by buying an American good in this instance promotes their drive towards creativity and innovation in the industrial manufacture of goods. In most of the occasions, foreign products do have low quality. As result, buying of the American products promotes the exploitation the consumers from the exploitation of such low-value products from other nations (Hufbauer, 2013). Buying an American product promotes peace in the nation simply because it helps in avoiding the goods from those nations that are political enemies of the country.
Buy American Requirement also has some limitations. It does not only leads to prosperity but also leads to loss of jobs of the Americans that in the end makes them poorer than they were even before. Such loss of jobs would easily come due to the exit of the foreign based companies that would suffer from the implementation of the buy American requirements. Buy American Requirement policy leads to the production of items that are so expensive for the local man to acquire. This is possible since the requirement can easily result into monopolization from the corporate firms that would greatly benefit by the implementation of such requirements. Many citizens have to use their little resources to acquire the other bigger items produced by the home companies that, in this case, make them much poorer in their lives (Noorzoy, 1968). The major benefit is that the buy american requirement would help the VectorCal and Remote Control Unlimited company to find a ready market with limited competition. On the other hand, the buy American requirement can be disadvantages to VectorCal and the new company in that it can limit their markets to the American population, making them forget on internationalization processes.
Goehle, D. (1989). The Buy American Act: Is It Irrelevant in a World of Multinational Corporations? Columbia Journal of World Business, Vol. 24 Issue 4, p10-15
Hufbauer, G. (2013). Local Content Requirements. Washington, DC: Peterson Institute for International Economics.