Across the Table: Buy American
I had to chuckle – with a bit of frustration – when a lab planner told me he couldn’t use the European products I represented because his customers preferred to buy American. I wanted to ask him if his customers use iPhones, which are not made in America; shoot, he was planning labs in other countries!
More than this, though, I was frustrated because he, like many others, did not understand how the ‘Buy American Act’ actually works. This unnecessarily restricts his customers to a narrow selection of product solutions for his customers. This may eliminate innovative products, faster shipping, and even better pricing.
As our world continues to get smaller, companies sell and manufacture worldwide, universities recruit students and faculty from around the globe, and even professional sports teams recruit athletes worldwide. A brief review of the key issues might give you additional options to better serve your customers.
The original ‘Buy American Act’ was passed in 1933. This caused free-trade treaties (WTO, NAFTA, etc.) to expand their parameters through the Trade Agreements Act, first enacted in 1979, to foster fair and open international trade. When your projects are affected, products and/or services are required to be only U.S.-made or TAA-designated country end-products. There are actually three factors at play here:
1) Are the countries TAA designated
2) Are the products manufacturing compliant?
3) Which projects are affected?
TAA ”designated” countries are actually quite numerous, over 120 in fact. A designated country is defined as a WTO country, an FTA country, a least-developed country, or a Caribbean Basin country. In other words, buy ”American” includes many other countries. Examples of countries that are NOT TAA-approved are China, India, Indonesia, Iran, Iraq, Malaysia, Pakistan, and Russia.
Even though a product may come from a “designated country,” it does not necessarily mean the product is acceptable. It must first meet the ‘Rule of Origin’ test. This requires the article to be “substantially transformed into a new and different article.” Acceptable would be actual manufacturing and/or meaningful and complex assembly. There are additional details involved, but the gist of this is that to qualify, most of the value in the product must originate in the “designated country.”
The final question is, which projects are affected? Federally funded projects are affected. State-funded projects may also be affected under at least three circumstances:
1) The state has specifically stated it follows the ‘Buy American Act’ on a state level.
2) The state has specifically passed its own laws that mimic federal policy.
3) The state is one of the 37 which are signatories to the WTO.
While many laboratory innovations come from America, many also come from elsewhere. Don’t miss out on opportunities to possibly better outfit your projects, get them completed on time, and possibly get them done less expensively.
Dave can be reached at dwithee@alum.mit.edu or 920-737-8477.
All opinions expressed in Across The Table with Dave Withee are exclusive to the author and are not reflective of Lab Design News.