CHICAGO (AP) -- Caterpillar CEO James Owens is expressing concerns protectionist pressures are increasing, but must be discouraged to avoid a repeat of actions he says exacerbated the Great Depression.
Speaking Wednesday during a panel discussion about the global financial crisis, Owens noted that most of the G-20 nations have adopted protective measures since their meeting in November.
"The natural tendency is to look after your own in an economic crisis," he said, adding the United States has long waived the flag of trade liberalization and must continue to do so.
There is a "buy American" provision in the economic stimulus package and a provision in a spending bill passed last month killing a NAFTA program allowing Mexican trucks to operate in the United States. In return for the truck ban, Mexico imposed tariffs affecting about $2.4 billion in annual trade and 89 U.S. products.
"The U.S. is not an island unto itself," Owens said.
Owens also said it's possible the federal government proposes another stimulus package targeted toward infrastructure improvements. He said such a measure would both decrease unemployment and be an investment in the country's future.
The head of the Peoria-based heavy equipment maker told the Chicago Council on Global Affairs he expected the nation's economy to show improvement in the fourth quarter. However, unemployment will continue to grow because it generally lags growth in gross domestic products.
Owens said the $70 billion for infrastructure in the $787 billion stimulus package passed earlier this year was not much compared to the size of the construction industry in the U.S. He noted the money directed toward infrastructure was more than offset by the decrease in spending in the private sector.
"I wouldn't be surprised if we come back with more spending," said Owens, a member of President Barack Obama's Economic Recovery Advisory Board. "We have been under investing in infrastructure. Now is a good time to increase investment in dams, railroads, airports, roads and the electric grid."
Owens pointed out the Chinese government has allocated billions more than the U.S. on infrastructure. Because of that, he expects that nation will be among the first to recover from the recession. China passed a $585 billion package and cut bank interest rates as part of its stimulus plan. Caterpillar sales in China have already improved because of that action.
According to Owens, Caterpillar sales of excavation equipment in China reached a record high in the fall of 2008, and in the 90 days fell almost to zero. He sales have nearly returned to previous levels because of Chinese investment in infrastructure. He would not give numbers.
Caterpillar employs about 112,000 people worldwide, with about 65 percent of its revenue is generated from overseas.