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Lingo Consulting
 

It seems as if every time I turn on the news, they are talking about one more part of Obama's economic stimulus, and this hour it appears that it is time to talk about the "buy American" provision. Due to the fact that 95% of the world's consumers live outside of the US (according to Chris Braddocc of the USS Chamber of Commerce), it is reasoned that the provision would actually provoke other nations to consider their own protectionist policies. Following that logic, such a provision could also encourage other nations to consider banning American imports, refuse to hire American contractors and even toughen existing laws that govern our ability to trade with them.

The 'buy American" provision, which restricts infrastucture activity unless  all of the iron and steel used in the project is produced in the United States" is already the talk of Washington, but is not the first time such legislation has been implemented, nor the first time strengthening American protectionism through limiting the purchase of foreign goods for American infrastructure. In fact, the first Buy American Act was passed in 1933, requiring the us government to choose American made products in its purchases with only certain exceptions. Then, in a speech on July 29th, 2003, US Senator Russ Feingold stated his belief that American goods should be favored in manufacturing and proposed a bill to strengthen the 1933 act. It's unclear whether these two measures directly resulted in the decrease in manufacturing in this country, but what is clear is that industy is no longer what it used to be.

Given the present economic situation in the US, it's easy to criticize a provision that might further limit business. However, what would be the consequences for not protecting American industry-industry that is shrinking every day. It is disturbing to see our country moving away from agriculture and industry, and if we can't produce the food we eat, and we don't make the things we use, then I can tell you the outcome will not be good. For these are the characteristics common to underdeveloped and often unstable countries. In combination with our economic foreign dependence, this doomed scenario makes for a worrisome future.

It is unclear what the effect of the buy American provision will have on American industry, and it would be premature to assume that it will either help or harm us. What is clear is that America cannot afford to lose valuable industry during this critical time in our history. The best route would be to find a way to state a preference for American goods without triggering a worldwide ban of American products and businesses.



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When doing business abroad, we sometimes find ourselves confronted with a different set of, umm...let's call them "values." There is a tough choice to make, and it most often concerns electing profit or deciding not to business with people who don't share our ideals. In an internview with the State Department, I was once asked what my policy was on accepting bribes. The correct answer (and the one I gave) was not accepting bribes under any circumstances.

There are practical reasons for doing this, above and beyond moral or ethical ones. First, since we don't know the laws (presumably) of each and every country we work with, we certainly wouldn't want to go to jail overseas for committing a crime...all because we made a last-minute wrong turn at the corner of good and bad decison streets. Another reason is getting in trouble with our home country. What happens when companies engage in shady business practices (no matter how common they may be) abroad? It ruins reputations, and destroys possibilities for future honest deal-making for other companies, that's what it does!

We're not on our high horse here. We understand that there are countries where it is common practice to accept payments "on the side." As your friends in the consulting world, however, we strongly caution against it. It could cost you not only future business, but establish a pattern for accepting illicit payments and give you the type of global reputation you don't want.

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