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Born in the U.S.A.: Defined by Build America, Buy America Act
“Manufactured in America” seems like a simple statement. It would be easy to assume that if a product was pieced together within the United States, we could say it was “Made in America.” If the entire product is composed of pieces from Canada, but merely pieced together in the United States, can we really say that it is an “American” product? The Federal Acquisition Regulations Council have been pushed to define these standards.
The Build America, Buy America Act (BABAA) required the Federal Acquisition Regulations Council to provide an exact definition of “end product manufactured in the U.S.”. BABAA must have a clear definition of American-made products, as they relate to projects funded partly by federal financial assistance. BABAA will ensure that for infrastructure projects such as airports, emergency food & shelter buildings and many other federally funded projects to qualify, the infrastructure must be built from products manufactured in the United States. The FAR initially provided guidance that iron, steel, manufactured products, and construction materials used in infrastructure projects be made in the United States. This early definition lacked specificity as to what it would take for products to qualify as “made” in the U.S..
As of May 13th, exact terms to qualify for each section of the FAR definition have been provided. For iron or steel products to be considered “produced in the U.S.,” all manufacturing processes from the first melting stage through the application of coatings must occur within the United States. Currently, manufactured products must have more than 55% of the cost of their components (being mined, produced, or manufactured) come from the United States. By 2029, this percentage will increase to 75%, making it exceedingly more difficult for products to qualify under this act. Construction materials must have had the entire manufacturing process occur in the United States.
Pushing the United States to produce their own materials for infrastructure will decrease the imports of these materials, especially as regulations increase over the next several years. By evolving to meet the standards set by this act, the United States may even have opportunities to become a leader in exporting construction materials. For now, we will watch the country learn to significantly produce their own infrastructure materials, merely to continue to receive federal funding on these projects.
As the definition of “made in the U.S.A.” evolves, we can observe the fine lines and specificity required to have products be considered American made. These new qualifications can lead to a push within international trade of how products qualify for country of origin standards, as well as qualifying measures for Free Trade Agreements.
Contributor: Audrey Silcox
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