Here is one group of economists that understands the problem with Buy-America policies. In their paper The Political Economy of Public Bus Procurement: The Role of Regulation, Energy Prices and Federal Subsidies, Professors Li, Kahn, and Nickelsburg report that the American bus fleet is more expensive and more polluting than that of other countries:
This absence of international trade has multiple implications. First, the absence of international competition likely leads to high prices. This could result in fewer buses due to capital constraint and hinder the economics of scale that is vital for public transit (Morhing 1972; Parry and Small 2009). While it is difficult to construct a hedonic bus price regression where we control for key metro bus characteristics, our research suggests that measured in comparable units, buses in Tokyo and Seoul are half the price of U.S. buses and buses produced in China are even cheaper. While cynics might question the quality of China’s buses, it is notable that wealthy and well governed Singapore is importing buses from China.
In the absence of international competition, U.S. tax payers face a higher price for subsidizing urban bus services and U.S owners of the domestic firms that produce the buses gain some monopoly rents. There is a fundamental asymmetry in that a small group of domestic producers benefit from the absence of imports while the costs borne by tax payers are broadly spread out (Stigler 1971, Becker 1985). Based on data from 1997 to 2011, the average price for a U.S metro bus (in year 2011 dollars) was $309,000 with the 10th percentile of the empirical distribution being $104,000 and the 90th percentile at $497,000.
A second implication of the absence of bus imports is extra energy consumption and hence greenhouse gas emissions. The bus fleets in Seoul and Tokyo are both more fuel efficient than in the U.S. The fleet fuel economy of buses in the U.S. was 3.54 miles per gallon (of gasoline-equivalent fuel) in 2011, compared with 4.74 in Tokyo which also operates a diesel-dominated fleet of about 1500 buses. In Seoul, the average fuel economy of 61 diesel buses was 5.05 and that of 7,469 CNG buses was 4.04 in 2011.
This Chinese electric bus, being tested for use in Los Angeles, is a rare example of a foreign bus manufacturer selling to the US market.
[…] on the Network today: Systemic Failure reviews a report that found “Buy America” domestic purchasing requirements are driving […]
If more American cities actually had decent transit (and if people used it), the competition argument would have a lot less weight. I’d imagine there would be room for internal competition between American bus manufacturers if 300+million people were using them. A big part of the problem is that so few Americans actually ride the bus.
Of course more people would ride the bus if bus service were more useful, and part of why it’s not is that it takes more money to provide a given level of service, because the buses are more expensive. Something of a downward spiral there.
The situation is even worse in train service. Most of the parts needed for trains and tracks are simply not made in the US at all. Buy America creates a giant layer of red tape, requiring a two-week delay to get a “waiver”, for every damn little piece of electronics or track screws which isn’t made in the US.
It’s all very well to have protectionist laws to protect a domestic industry — though this is not the way to do it, and tariffs would be MUCH simpler — but trying to protect an industry which does not exist in this country and which does not have enough funding to exist in this country is insane.
Also, only transit projects are burdened with this. There’s no “Buy America” requirement for private car purchases. (Again, blanket tariffs on imports would be better because they wouldn’t discriminate.)
The best argument against importing European buses is the fleet of “2003 Bus of the year” winner Van Hool crap. Abysmal internal layout creating both a choke point at the fare paying entrance and NO overhead grabs in the middle wheelchair/stroller space which most riders must pass through looking for a non reserved (senior/disabled/pregnant) seat. And, in fact the MDBF was no better than buses built at US assembled Canadian or Hungarian owned plants. Worse yet, long parts shipment times exacerbated down time. Delving deeper into design issues VH puts the engine compartment within the passenger envelope leading to exhaust lintrusion as well as more constricted access for maintenance. Worst of all, placing the engine in the middle of the bus necessitates a drive train tunnel (remember old school US cars w/ the hump in the floor?) forcing seats tobe a step up from the “low floor.”
But as anyone who’s traveled around Europe can tell you, the average/median transit buses you’ll find in cities or at airports are waaaaay nicer than those you’ll find in the US. Cleaner, quieter, better ergonomically, aesthetically, attractive, modern and sleek with generally huge windows and low floors, etc. It’s very noticeable and striking to any half-way observant person. So I guess Mr. Vartanoff doesn’t travel much.
[…] or out-of-date suppliers protected from foreign competition by such policies. Take a look at the inferior and hugely expensive buses and trains of the United States (made in the United States due to buy-American requirements); ask […]