Problems relating to Trade and Investment on United States

2. Grant of a preferential tariff rates based on increased home production, and/or local procurements
Issue	Issue details	Requests	Reference

(1) Buy American Act favors the U.S. Products in Government Procurement	- A member firm wishing to export parts for railway vehicles is faced with The Buy America provisions under the Surface Transportation Assistance Act of 1982 that get in the way against their wishes. - BAA is the protectionist's legislation enacted with the express purposes of protecting and encouraging the domestic industries. It first appeared amidst the 1933 Great Depression Period, compelling prioritised Purchase of domestic products in government procurement. The American Recovery and Reinvestment Act enacted in February 2009 incorporates the Buy American provisions that compel purchase of the domestically manufactured steel products in public projects. While the Act includes an additional wordings, "the law shall be implemented in accordance with the international agreements", lest it violates the World Trade Organisation's Agreement, it is a matter of great concern, as it swings toward promoting the protectionism. The line of products Member Firm handles include steel and related products subject to these protectionist legislation and faces problems in its sales in the U.S. - GOU demands penalty payment of 6% or 12% over the purchase price on purchase by the U.S. federal agencies' purchase for more than $2,500 under the Buy American Act (BAA), should the amount of local procurement or purchase in the U.S. be less than 50% of the purchase price. In the event Member Firm imports from Japan and sells to any of the U.S. federal agencies Power Generator Package (gas turbine, reduction gears, generator, and other machineries and equipment), such transactions violates BAA. As it stands, Member Firm is unable to sell products to Federal Agencies, unless it assembles the power generator package in the U.S.	- It is requested that eliminates the provisions that give a more favourable treatment to the U.S. products vis-a-vis foreign imports. - It is requested that the GOU repeals these laws and provisions to promote free trade/competition. - It is requested that the GOU takes step to repeal or deregulates its requirement under BAA.	- The American Recovery and Reinvestment Act of 2009 H.R.1 ("Recovery Act") - Tender provisions of each state for public construction work
	(Action) - On 17 February 2009, President Obama signed "The American Recovery and Reinvestment Act of 2009 : H.R.1", so called the Recover Act, which includes "Buy American Provision", compelling the use of the U.S. made steel and manufactured products (of more than 50% local contents, where the federal procurement regulation applies) in a project for construction, alter, maintenance or repair of public building or work deploying the fund made available or qualified under the same Act. This measure may be revoked for a country(ies) with which the U.S. is deemed to maintain mutually beneficial government procurement obligations under the WTO Government Procurement Agreement or FTA. - On 1 July 2009, Department of Commerce (DOC) published in Federal Register (at page 31410) on Buy American Exception under the American Recovery and Reinvestment Act of 2009 (the Recovery Act) to exclude from the Recovery Act switching, routing, transport, access, customer premises equipment, end-user devices, and billing/operations systems under the Broadband Technology Opportunities Program. - In March 2011, at the Japan-USA Economic Harmonisation Dialogue, Japan Side presented to the U.S. side: "Exclusionary Provisions under FAR 52.225, etc. are amended to require decision of the 'Contracting Officer' in order to clarify the Requisition Standard under the Buy American Act", as a matter of concern to Japan Side.

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