Obama gives reassurance over 'Buy American' bill

The Obama administration backed off from a trade war over protectionist measures, saying it would now make sure that a massive stimulus bill would not break any agreements.

White House press secretary Robert Gibbs expanded on comments by President Barack Obama that sought to reassure American trading partners worried about protectionist provisions in the bill that is advancing through Congress.

Mr Obama wants to make sure that "any legislation that passes is consistent with trade agreements and doesn't signal a change in our overall stance on trade in these economic times", Mr Gibbs said.

He added that the president would make sure any bill he signed would meet trade commitments.

Mr Obama, in an interview on Tuesday, said the measure should not include provisions that were "going to trigger a trade war".

The so-called "Buy American" provisions in the spending bill are favoured by politicians in Mr Obama's Democratic Party, who want to make sure American businesses receive the maximum benefit from a bill costing more than £550 billion.

But there has already been a strong international backlash, with complaints from major trading partners, including the European Union and Canada. Some have threatened retaliation and say the measure could kick off a trade war as the world economy is already reeling.

They say it would break a promise made by world leaders in November not to resort to protectionism to prop up their economies.

In a separate interview, Mr Obama told Fox News he thought it would be a mistake "for us to start sending a message that somehow we're just looking after ourselves and not concerned with world trade".

The House of Representatives has already approved the stimulus bill and the Senate is considering its version. The Senate bill states that none of the funds may be used for a project "unless all of the iron, steel and manufactured goods used in the projects are produced in the US". The House bill is somewhat less restrictive.

After the Senate approves its bill, the two versions would have to be reconciled - a process that could lead to major changes.

Mr Obama, who has argued that stimulus measures are urgent, is unlikely to block passage of any bill approved by Congress. But his comments signal that he would like congressional Democrats to remove the measures before a final bill is sent to the White House for his signature.