Mail Online (Link) - Kirsty Walker (February 4, 2009)
Barack Obama has signalled he will step back over his controversial plans to 'Buy American' after he was embroiled in a war of words with Britain and the EU. 'I agree that we can’t send a protectionist message,' he said in a television interview last night. 'I think it would be a mistake, though, at a time when worldwide trade is declining, for us to start sending a message that somehow we’re just looking after ourselves and not concerned with world trade,' he told Fox TV.
His comments came after senior figures warned the move would risk creating a new economic Iron Curtain between the EU and America, and accused the new President of making a 'major mistake under pressure'.
Mr Obama has introduced controversial measures in his £835billion economic stimulus bill, currently under debate by the Senate, which state that only American-made iron, steel and goods can be used in projects paid for by the package.
But the 'Buy American' rule threatens to trigger a disastrous transatlantic trade war as the EU has warned it will not stand 'idly by' if the ban on imports is introduced.
The row overshadowed Foreign Secretary David Miliband's historic meeting with new US Secretary of State Hillary Clinton in Washington today. John Bruton, the EU ambassador in Washington, warned: 'If we have a series of protectionist measures introduced, then the possibility of real global leadership is put at risk. 'We regard this legislation as setting a very dangerous precedent at a time when the world is facing a global economic crisis.'
Prime Minister Gordon Brown has recently delivered a series of hard-hitting speeches warning that a failure to uphold free trade risks turning the world recession into a deeper slump. He has repeatedly claimed that Mr Obama's action to combat the economic crisis in America is modelled on his own plans to drag Britain out of the recession.
Mr Brown's official spokesman today refused to criticise the President's plans directly. But he said: 'The PM has made his view on the general issue of protectionism very clear. Obviously, we would not support protectionist measures.'
Mr Obama supported a 'Buy American' campaign while running for the White House and has even distributed campaign buttons and flyers with a special emblem declaring his support. The President's fiscal stimulus package is being discussed in the US Senate this week. He has admitted the bill faces a 'difficult few days'.
The EU has been lobbying behind-the-scenes for the ban on steel imports to be ditched, but their pleas have so far fallen on deaf ears. Along with Canada, the EU is now planning to make a formal complaint to the World Trade Organisation.
London Mayor Boris Johnson also waded into the row, warning the move would be 'no good for America and no good for the world'. He said: 'Remember what happened in the Thirties, when they had exactly the same instinctive and panic-stricken reaction, and a recession was turned into a slump. 'We need Obama to drop the Buy American clauses of his package because in the end - no matter how seductive the idea may be - a refusal to compete and a refusal to be open will be no good for America and no good for the world.'
Conservative MEP Syed Kamall added: 'Protectionist gestures from the US and similar responses from the EU will only create a spiral of economic nationalism. 'We cannot turn back the clock to the years of closing our markets to each other. Open trade has increased prosperity and created greater political stability around the world.'
Michael Wilson, Canada's ambassador in Washington, also warned: 'These protectionist measures, in a time of recession, only make things worse. It can only trigger retaliatory action and we don't want to go there.'
The White House has said it is reviewing the Buy America part of the stimulus Bill, although vice-president Joe Biden said last week that it was legitimate to have some portion of it in the final measure.
Mr Miliband is the first British minister to hold face-to-face talks with the new US administration since Mr Obama's inauguration last month. Speaking after the talks, Mrs Clinton hailed the special relationship between Britain and America. She said: 'It is often said the United States and Britain have enjoyed a special relationship. It is certainly special in my mind and one that has proven very productive. 'Whoever is in the White House, whichever party in our country, this relationship really stands the test of time and I look forward to working with the Foreign Secretary.'
For his part, Mr Miliband called the Obama administration's willingness to talk to Iran a 'new dimension' in international efforts to end Tehran's nuclear ambitions. He described his talks with Mrs Clinton as 'very positive indeed'.
The Obama administration is considering new approaches to Iran. Those include direct official dialogue and the appointment of a special envoy to deal with Iran.