FedEx CEO: 'Buy America' Puts U.S. Jobs At Risk

The so-called 'Buy America' provision in the stimulus package passed by the House this week raised the ire of Canadian and European leaders who say the measure is protectionist.

But with the industrial Midwest running at 45 percent capacity, and 40 percent of the people who are working in steel companies and other manufacturers laid off, the Obama administration appears to be of two minds on the provision.

Vice President Joe Biden said this week: "I think it’s legitimate to have some portions of Buy American in it."

Meanwhile, White House press secretary Robert Gibbs said this week, "The administration is reviewing that provision.  It understands all of the concerns that have been heard not only in this room but in newspapers produced both up North and down South."

During our interview on "This Week" FedEx CEO Fred Smith argues the Buy America provision in stimulus will hurt global trade.

"The reason it's not the right thing to do is that the growth of global trade has been enormously beneficial to the United States. The problem with trade is that the benefits are diffuse and the pain is localized. But the benefits of having a global economy have created an export sector in this country that provides our highest-paying jobs," Smith said.

"If the Congress passes this Buy America provision, I can assure you, and we operate in 220 some odd countries around the world and are a huge part of the import and export infrastructure of the United States, we will get retaliation, and it'll be American jobs at risk."

Rep. Barney Frank, D-Mass., chair of the House Financial Services Committee, agreed with Smith, but said what is needed is a better social safety net to help people dislocated from their jobs.

"The fact is that the average American feels that, even when there was growth, he and she wasn't getting a piece of it.  And I appreciate you saying, Fred, that we need to take care of the people dislocated, but you have to broaden it," Frank said.

"I will tell you, I believe, until you get a better social safety net, actions that you're not going to like are going to continue," he said. " Until you relieve the localized pain better, the average American will block things like trade, like outsourcing that you think we ought to do." 

--George Stephanopoulos

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