INCREMENTALISM: ERODING THE IMPEDIMENTS TO A GLOBAL PUBLIC PROCUREMENT MARKET

Georgetown Journal of International Law, Spring 2007 by Yukins, Christopher R, Schooner, Steven L

One common form of trade barrier is those explicit measures to provide domestic industry with a competitive advantage over foreign competitors. Historically, "the United States operated significant overt policies, generally embodied in legislation" - the Buy American Act15 is the most obvious example - "whilst the policies of many of its major trading partners, including most European states, were more covert."16 The obvious preferences (and barriers) raised by the Buy American Act have, for the most part, been overtaken by the United States' obligations under the World Trade Organization (WTO) Government Procurement Agreement, discussed below.17

Throughout the U.S. procurement system, however, less obvious domestic preferences continue to thrive.18 Recentiy, for example, the U.S. Congress made substantial revisions to the Berry Amendment,19 a decades-old piece of legislation which requires the U.S. Department of Defense to purchase certain items only from U.S. producers, including clothing and specialty metals, the subject of recent legislation.20

With regard to specialty metals, the Berry Amendment poses enormous compliance challenges for the Department of Defense and its contractors.21 Titanium and certain alloys, for example, are critical to the sophisticated electronics and weapons systems regularly procured by the U.S. military. Yet these and other specialty metals covered by the current ban are often, according to industry, difficult to access in the domestic U.S. market, and the Defense Department has scrambled to make sense of the Berry Amendment's blanket ban.22

1. A Troubling but Informative Anecdote

The Berry Amendment's ban on specialty metals offers an interesting case study in domestic-content requirements for several reasons. First, because it calls for domestic specialty metals in a highly mechanized military, the requirement intrudes into almost every corner and crevice of the defense complex, wherever specialty metals are used - from aircraft to weapons to computers. Unlike other domestic-content requirements that simply lend domestic products a price preference (such as the requirements of the Buy American Act), the Berry Amendment wholly bars the Defense Department from buying any item that contains foreign specialty metals absent exceptional circumstances. Second, the pervasive impact of the absolute bar against foreign specialty metals divides the U.S. specialty metals industry from the Defense Department and its major contractors.23 Third, the debate shows how a global economy reorders the politics of domestic prefer- enees. Traditionally, most domestic-content requirements have left purchasing agencies uneasily allied with domestic industry. The agencies typically have been willing to bear the additional costs of domestic preferences in order to further other social or political goals. Now, as is discussed below, purchasing agencies' new decision to demand flexibility (rather than slavishly adhere to a domestic preference mandate) highlights the internal fissures that undermine traditional domestic preferences. Agencies and contractors, under pressure to utilize the collective strength of a global supply chain, cannot indefinitely abide arbitrary political demands to accommodate self-interested domestic industries.