Chinese vs. US Condoms: A Textbook Case for Stimulating Free Trade

Courtesy of The Drudge Report, I came across this article earlier today that paints a textbook case for stimulating free trade (despite some of the buy American rhetoric that I detected in the piece). In the above-linked article, we learn that "the U.S. Agency for International Development, which has distributed an estimated 10 billion U.S.-made AIDS-preventing condoms in poor countries around the world," is switching to a Chinese supplier for its condoms (the US appears to be funding much if not all of this initiative). According to the authors, "the switch comes despite assurances over the years that the agency would continue to buy American whenever possible". But why would anyone ever buy locally when the Chinese alternative is 60% cheaper and from a green perspective is probably a better solution given, what I'm guessing is, a shorter shipping distance directly to countries (from Asia) that are recipients of the free condoms. The US supplier, Alatech, "had previous delivery problems under the program". In fact, their delivery "problems" over the years "may have driven U.S. officials to seek much less expensive foreign-made" products.

Now, while that's anything but a flaccid argument against US protectionism, the manner in which the supplier change was executed definitely is. Consider how when "Alatech formally protested the federal contract going to its foreign competitors ... the Government Accountability Office rejected the complaint, noting that it lacked jurisdiction in the case. Instead of dealing directly with condom makers, as it had done in the past, the government hired a Massachusetts company to act as a middleman. That in turn protected the government from a successful bid protest, because USAID was no longer the 'prime contractor'."

Good spend, but the U.S. Agency for International Development has clearly lost site of the other half of the anatomy they seek to protect.

Jason Busch

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