Japan sends U.S. letter on "Buy American" worries

TOKYO, July 24 (Reuters) - Japan has sent a letter of concern to the United States on a bill recently passed in the U.S. House of Representatives, which contains a provision similar to “Buy American”, an official at Japan’s foreign ministry said.

The letter, sent earlier this week from Japan to U.S. Trade Representative Ron Kirk, comes as the United States says the “Buy American” provisions are in line with World Trade Organisation commitments. [ID:nSP225182]

In the letter, Japan’s ambassador to the United States, Ichiro Fujisaki, expressed worries on a provision in the appropriations bill for energy and water development that said funds should not be used to buy cars other than those made by the Big Three, the official said.

The Big Three refers to troubled U.S. automakers Ford Motor Co F.N, General Motors [GM.UL] and Chrysler [CCMLPC.UL].

“If it limits it to just the three, this violates the World Trade Organisation’s fundamental principle of non-discrimination,” said the official, who declined to give her name.

“Taking into consideration the flow from the previous stimulus package, we are concerned that there will be more moves to promote purchasing of American products.”

“Buy American” provisions in the U.S. stimulus bill generally require public works projects funded by the bill to use only U.S.-made steel, iron and other manufactured goods.

Earlier this month, the WTO head said governments are unfairly blocking trade in response to the global downturn, pinching auto and steel exports and hurting wealthy economies most. [ID:nL1326500]

Kirk told reporters earlier this week at an Asia-Pacific Economic Cooperation meeting that the “Buy American” campaign will not violate WTO commitments.

At the meeting, 21 countries including the United States and Japan had agreed to shun protectionist measures, saying it would be a setback for the global economy.

The appropriations bill will now go on to be voted in the U.S. Senate. In the letter, Fujisaki asked Kirk to approach the Senate to exclude the provision from the bill, the official said. (Reporting by Yoko Kubota; Editing by Sugita Katyal)