This is from a DOC notice and request for comments related to the use of domestic steel and iron in pipelines:
The Department of Commerce is seeking information on the construction and maintenance of American pipelines. This information will help the Department develop a plan for the domestic sourcing of materials for the construction, retrofitting, repair, and expansion of pipelines inside the United States as directed by the January 24, 2017 Presidential Memorandum regarding “Construction of American Pipelines” (Presidential Memorandum). The Secretary of Commerce, in consultation with relevant agencies, is required to deliver this plan to the President by July 23, 2017. In response to this directive, the Department of Commerce is conducting industry outreach to better understand: Current pipeline construction technology and requirements; potential advances in pipeline technology; domestic and foreign supply chain for pipeline materials; and all other information respondents consider pertinent to the development of the domestic sourcing plan. Responses to this notice (posted at https://www.regulations.gov) will inform the Secretary's plan for the domestic sourcing of materials used in pipelines within the boundaries of the United States.
Here are some of the comments received. The EU points out that domestic content requirements violate WTO obligations:
the EU is concerned that the plan under discussion would not comply with the US commitments in the World Trade Organization (WTO). In this respect, we would draw attention to the obligations based on the WTO agreements, in particular GATT 1994. The US Government has committed to treat imports and foreign companies the same way it treats domestic products and companies. The imposition of domestic preference requirements on private entities could be considered an introduction of discrimination between domestic and foreign producers/suppliers in potential violation of the National Treatment obligation of Art. III of GATT 1994.
Canada makes a similar point:
Specifically, a U.S. requirement for the use of domestic steel in private pipeline construction would be inconsistent with WTO and NAFTA provisions in the areas of trade in goods and investment, in particular, GATT Article III (National Treatment), NAFTA Article 301 (National Treatment), as well as the provisions of the WTO Agreement on Trade-Related Investment Measures (TRIMs) and NAFTA Article 1106:1 (Performance Requirements). Canada will continue to protect its interests to preserve these fundamental obligations in the face of any prima facie violations.
Beyond this, there is also the issue of whether such requirements are permissible under U.S. law. This is from the Associated General Contractors of America:
III. Domestic Content Requirements on Privately Funded Construction Projects
What all three aforementioned statutory systems that regulate domestic content have in common is that they each apply to construction projects that have some level of federal funding involved. Unlike these steel and iron restrictions designed as conditions of federal funding or federal assistance eligibility, this Memorandum would govern commercially-built projects paid for entirely without federal funding. As such, this language would establish a precedent whereby the federal government can shut off U.S. Companies from access to wholly privately-funded, privately-built pipeline projects in the U.S.
AGC strenuously objects to this model of attaching federal content rules, derived from statutes designed to apply to federal and federally-assisted purchasing, to non-federal requirements. The Memorandum states that these provisions should be put in place “to the extent permitted by law” and it is AGC’s position that the Department lacks statutory authority to extend these requirements as a condition of receiving a federal pipeline safety permit. Such expansions of domestic content sourcing requirements to private markets are also likely to be judged as violations of long-established international trade law.
Attaching such conditions to the receipt of a federal permit is a very dangerous slippery slope that opens the door to all sorts of federal requirements that have never before been conditions on privately funded construction work. Such an action could lead to the creation of more federal impediments—not fewer—to the building of the nation’s infrastructure. The federal government denying access to private markets to U. S. companies is unprecedented and will result in job losses for U.S. workers.