US gives India assurance on outsourcing

Times of India ^

[JudgeSmales]

Got this in an Email this morning.

WASHINGTON: The Indian government and businesses have won a major assurance from the Bush Administration on the issue of outsourcing.

A senior US official has said Washington is against any attempt by state governments to legislate a ban on outsourcing on the lines of what is being considered in New Jersey and other states.

The official, US Trade Representative Robert Zoellick, gave this assurance in course of three hours of intensive talks with Indian Commerce Minister Arun Jaitley, during which they discussed subjects ranging from the movement of people to the export of Indian mangoes to the US. The length of the talks itself was indicative of the wide range of bilateral and multilateral topics under discussion as the two sides try and bump up their modest $ 15 billion trade to greater levels.

But the controversial issue of outsourcing was clearly on top of the pile and Jaitley said he had explained that the public and political opinion in India regards the move by some US states as "completely contrary to the spirit of market access and creates an adverse environment when negotiations were on in various other sectors."

Zoellick, he said, was alert to the brouhaha the issue had caused in India and conveyed to him that the Bush Administration opposes the states’ move and is persuading them not to go ahead with it.

In at least half a dozen states, state legislators are considering legislation to put a crimp on outsourcing claiming it is taking away local jobs. Outsourcing to India is projected to be a $ 20 billion business in the next five years, mostly from the United States.

"The essence of market access in services really is individuals and companies -- that people are entitled to the most efficient service at the best rate -- and if these efficient services are provided by India and some other country, we feel it will not be appropriate for legislation to impede the market forces," Jaitley told correspondents after his day-long meetings in Washington.

The Indian team also managed to red flag another contentious issue that has gone unattended for several years. This involves Indian workers on temporary visas having to pay US social security taxes without enjoying the benefits accruing to them because they return home before the ten years it takes for the contributions to mature.

Each year, Indian businesses and workers are estimated to pay a staggering $ 500 million to the US Social Security system. Although many of the workers become immigrants and stay on to benefit from their contribution, the process is unfair on the increasing number who return to India after having debited up to 15 per cent of their salary into the US system.

The US has treaties (called a Totalisation Agreement) with some countries that enjoin it to return the social security contribution to workers when they return home. The Indian side has persuaded Washington to consider similar law with respect to India, Jaitley said

[Mamzelle]

I don't get it, GW. What's India done for *us* that they should merit such assuances? They wouldn't even help with Iraq.

[Roscoe]

This involves Indian workers on temporary visas having to pay US social security taxes without enjoying the benefits accruing to them because they return home before the ten years it takes for the contributions to mature.

Nobody forced them to come.

[1stFreedom]

If this is true, this is one conservative who is voting for ANYBODY BUT BUSH next election.

[JudgeSmales]

I'm guessing he wants them on board for some future actions, or maybe as a mediator to help patch things up w/ Turkey.

But to trade American jobs, especailly good ones, to do it just burns me up!

[ikka]

Each year, Indian businesses and workers are estimated to pay a staggering $ 500 million to the US Social Security system.

These people (and most other writers) don't get it.

Social Security is a TAX.

[George W. Bush]

Yep, better send those good jobs overseas. Can't leave 'em here.

[JudgeSmales]

I haven't seen this in any US papers, but if it's true I'm guessing the NY Times will have a good old time w/ it soon.

[tkathy]

This is head up the fanny stupidity. Could easily cost him the election.

[blackdog]

Now where my wife works, they spend 24/7 lecturing employees on intellectual property, patent rights, secrecy, and fire people for leaving a file on their desk, that the cleaning crew might copy and sell to a competitor.

At the same time they are sending their IT and MIS to India for cost savings. Now just what do you think happens to intellectual property then huh?

Greedy buckin forons.

[Snuffington]

I have a different take on this. I don't think this represents any sort of long-term decision by the administration. I think it's election maneuvering.

Bush knows this is an issue that could split his base. It would also focus the election more on the economy, and away from national defense - the opposite of his campaign strategy.

The politics here have nothing to do with Bush's opinion about offshoring. It all about next year's campaign. This is an issue he doesn't want anyone talking about. He wants it on the back burner at least until the election is over. So he wants to maintain the status quo and move on to other issues.

[LibertyAndJusticeForAll]

There are so many articles lately, I can't keep up.
OUR wonderful Trade Representative (we know who he really represents) clearly has this administration's directive to reassure India. Looks like even our state government work will be theirs.
I feel sick. No doubt it is time I sign up for one of Bush's community college programs so I can be reprogrammed into believing that Yankee Ingenuity exists only at the Corporate Exec level, that Globalisation and the One World Government are Utopia, that illegals are all legal, that our borders are not an opening for terorism and finally, Hatch is right, a non-American born should be President.

[Snuffington]

Your wife's story is pretty common. And it's one of the reason's I see a nasty backlash brewing for companies that bet their future on an offshoring model.

Post 9/11, security policies and laws are tightening all the time. Offshoring relies upon open communication regardless of national boundaries.

[ex-snook]

Judge, people may begin to realize that Bush would rather lose the election than leave his investors with less cash.

[harpseal]

This story has been around for a while and this issue is not going away. What will actually happen is up in teh air and teh last I heard there were no final decisions made.

[kevkrom]

Let me understand this... all of you so-called "good conservatives" are upset because Bush is against using the powers of the government to dictate to businesses how they can and can't operate?

[Chancellor Palpatine]

Great nick.

[jjm2111]

That Hatch thing really makes me want to retch!

[LibertyAndJusticeForAll]

You're right, the article is actually dated June 13. I thought it was a follow-up.

[Mamzelle]

It does seem that GW has been rather ham-handed in dealing with some of his anxious, middle-class base. At first, I thought it was the media, now I'm starting to wonder.

There are many issues roiling around with Middle America, and he's pushing some buttons. Like that business with "falling behind with technical skills"--

Our immigration laws go unenforced. Jobs lost by the hundreds of thousands overseas. Health insurance abused to the point that it is becoming unavailable, much less affordable.

It's not going to help much to get big donations from IBM if the laid-off IBM worker stays home in November--they're the Bush voters. The Dems, with their unions, could go after this disaffected voter...