EU warns Obama on protectionism

BRUSSELS, Feb. 3 (UPI) -- The European Union warns that a "Buy American" provision in President Obama's stimulus bill could provoke retaliation from other countries.

John Bruton, the EU ambassador to Washington, wrote the president and congressional representatives Monday, urging them to keep requirements that U.S. steel and U.S.-made products must be used in projects paid for by the bill, the Financial Times reported.

"Resorting to measures that may effectively close the markets from foreign operators cannot be considered the right, or effective response to the situation," Bruton said.

The Peterson Institute, a Washington-based think tank, warned that the United States could actually lose more jobs from retaliatory tariffs and other trade measures than it would gain from a Buy American provision.

The European Commission says it will consider a complaint to the World Trade Organization if it finds that the final text of the bill violates the Government Procurement Agreement, an international trade treaty signed by the United States.