Friday, 7 August 2009

Just another reason why "buy local" is stupid

The US fiscal stimulus package has resulted in this interesting little difficulty:

At stake are the president's efforts to fuel an economic recovery in the US by funneling stimulus funds to communities, including $US6 billion for municipal water projects. Lawmakers mandated that the money be spent on US products, with exceptions to meet international trade obligations.

GE says it assembles high-tech filtration systems for North American markets at its plants in Toronto and Oakville, Ontario, with parts from Hungary and elsewhere.

We improve our welfare when we trade.

The funniest punchline to this story would be the discovery of a supplier that produces the required filters in the US, but is wholly owned by a foreign investor.

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