WITA Webinar: COVID-19 & Trade – the Defense Production Act and Buy American Provisions
Wendy Cutler with the Washington International Trade Association (WITA)
On Thursday, April 30, the Asia Society Policy Institute (ASPI), along with the Washington International Trade Association (WITA), cohosted a webinar about recent invocations of the Defense Production Act (DPA) as well as a rumored "Buy American" Executive Order that is said to be circulating among senior White House officials. ASPI Vice President Wendy Cutler and WITA Executive Director Ken Levinson were joined by Jeff Bozman, Special Counsel at Covington & Burling LLP, Jean Heilman Grier, Principal Trade Consultant at Djaghe LLC, Scott Paul, President of the Alliance for American Manufacturing, and Clete R. Willems, a Partner at Akin Gump and a former colleague of Cutler's at the Office of the U.S. Trade Representative.
Cutler compared the two measures, noting some similarities such as the fact that both are longstanding ideas that are being considered to address similar concerns, and both give broad authorities to the President. On the other hand, she underlined differences in areas such as their intended scope and duration, noting that, "A Buy American Executive Order could be in place for the foreseeable future." She summed up, "Both of these policies are about addressing concerns about the levels of domestic production of critical goods," noting that the two longstanding policy tools seemed to have "gotten a new boost in the COVID world."
Panelists disagreed on whether a Buy American Executive Order would be in the United States' interest, but most shared similar diagnoses about the shortages of critical medical goods in the face of the pandemic. Paul noted that the Buy American Act was first enacted in the midst of the Great Depression and encouraged the White House to move forward with the Executive Order. "It would not be unusual at all to see some domestic preference enacted with respect to this crisis," he said.
Willems agreed with Paul's characterization that U.S. supply chains had grown too reliant on China in some sectors, but recommended a different solution. "I think it's not realistic to think you can make everything you need at home," he explained. "Let's look at regionalization, let's look at secure, trusted supply chains with allies. Let's look at stockpiling."
Others noted that, until the U.S. Government published more nuanced guidance on how it would implement the Defense Production Act with regards to exports of personal protective equipment (PPE), the use of the DPA had essentially amounted to a broad export ban on PPE. As Bozman, an expert on the history and use of the DPA, said, the Act's allocation authority "is quite broad." Even meat and poultry, he pointed out, were recently classified as "scarce and critical material essential to the national defense, when the President directed the Secretary of Agriculture to use DPA authorities to ensure the continuation of meat supply."