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...

[freeeee]

W supposedly doesn't want to spend the 'political capital' of not resigning the assault weapons ban. It is said he doesn't want to give the Dems an issue.

But apparently he doesn't have a problem with this enormously unpopular decision to send American jobs overseas, an issue that the Dems will certainly seize, and so hot it could cost him the election. He's got plenty of 'political capital' for that.

Shows where his priorities are.

[samuel_adams_us]

Isn't there a way to sue the president, a class action suit, for shipping jobs overseas and outside the united states? Isn't there a clause in the constitution which forbids this, or the bill of rights? Is the president not destorying our right to freedom and the pursuit of happiness?

[Jeff Head]

Hatch is right, a non-American born should be President.

IMHO, Hatch has lost his mind on this one. The founders included that restriction in the constitution for very good reason. Thye didn't want some foreigner by virtue of marriage, or any other reason, being in a position to exert such leadership influence on the course and direction of the nation in favor of their homeland.

They had experiences with just such experiences coming from Europe in general, and England inparticular.

Jeff

[LibertyAndJusticeForAll]

I just want to know which country or countries (or person) bribed Hatch, so I can be on the lookout for 'em.

[Jeff Head]

BTW, I knew you were being sarcastic with that comment I quoted...I felt sick too.

[lelio]

Is this an older story from a couple of months ago? I remember it that time around and Jay Inslee, representive from the Puget Sound WA area, was all for stopping anti-offshoring legislation. Now he's changed his tune a little bit and wants the GAO to look into the matter.

[RogueIsland]

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?

Some of us are even supportive of child labor laws. It's just terrible having a social conscience.

[dennisw]

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?

 CORRECT! You must appreciate that not all freepers are retarded libertarians and free market uber alles types. The real world is immune to air fairy theories.

[Jeff Head]

Hatch lost my support a long time ago. He's rubbed too many shoulders and played too much footsie with the likes of Kennedy, etc. and done so in money making ways for me.

When he went to Congress he was a fire-breather. Over the years he has been worn down and somehow diverted far off track IMHO on many foreign policy and other issues, though his stand on some of the purley moral issues remains fairly strong.

He's a case study of what happens when you determine to make the opposition your friend and start playing politics and compromise with them instead of continuing to stand steadfastly for the right and against the opposition who would water fundamental principle down and ultiamately destroy it.

[vikingcelt]

"If this is true, this is one conservative who is voting for ANYBODY BUT BUSH next election." Seconded here. This, coupled with the fact that he won't protect us from the invasion by illegal aliens, just about does it. He's destroying our country, our culture, our freedoms and our right to make a living in the land of our birth. ENOUGH!!!

[George W. Bush]

IMHO, Hatch has lost his mind on this one.

Hatch is, at best, senile. A few weeks back, he shocked even the RIAA by suggesting they adopt methods to destroy the hardware on any computer that was suspected of holding pirated MP3's. Strange, crazy, weird old guy.

[LayoutGuru2]

I just spent the last 6 months training my replacement who happens to reside in India. Just waiting for the other shoe to drop now. My company can hire three people in India for what it costs to retain me.

I guess it just makes good business sense. Bleh!!!

Any ideas on a good 'outsourcing-proof' choice for my next career? No, I don't want to manage my local Dairy Queen.

[The Green Goblin]

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.

Bush is a fool. Odds are that some Democrat will seize this issue (as Christopher Dodd is already starting to) and win the election with a broad base of middle class support.

[scottlang]

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

I agree, people vote their pocket books. If they fear for their jobs, and a dem promises to do something about it the center will go for it.

[dennisw]

Hatch is, at best, senile............

I've seen off the wall stuff coming out of him for years. He was still 95% good but with a real flake quotient.

[George W. Bush]

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?

Bush is using federal power to restrict the rights of states to regulate business and employment practices. What about states' rights? Why not let them restrict the outsourcing if they want and then the free market can correct it if necessary by doing outsourcing in other states.

Or would you object to the free market working this out on a state-by-state basis?

[VeniVidiVici]

Funny how we consider the NYTimes as a step above (or below) The Enquirer, but the India Times is gospel.

[Delphster]

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?

Lets see for starters EEOC ( affirmative action ), OSHA, EPA, Social Security taxes. It is great the Federal Governemnet does not interfere with American Business.

[freeeee]

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?

It's not a level playing field. Indian programmers entire pay is less than what American programmers pay in taxes alone. That coupled with the enormous cost of complying with innumerable government regulations makes us non-competetive. The American wage is inflated as a result.

This problem was caused by the government to begin with. "Retarded libertarians" indeed.

[jjm2111]

I agree w/ you. Hatch lost it there.

[Mamzelle]

I take your point. This story does come on the heels of the "technical skills lagging" story, which I dismissed on the hope that the media didn't supply context...

[dennisw]

I'm sick of people with idealistic theories that have nothing to do with the situation at hand. That don't apply for reasons that you state.

So Kevrom spouts some free market (libertarian) babble off of his cloud nine. He feels better but contributes zip.

[ex-snook]

"Bush is against using the powers of the government to dictate to businesses how they can and can't operate? "

Seems like he is using the power of government that arose from thousands of pages of government-to-government trade agreements. (Which lobbyists could see but our Reps could not).

Mr. President your mission 'if you care to accept it' is to grow jobs in America not foreign lands.

[StolarStorm]

" 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."

What is with these people??!! They are lucky that we allow them to steal out jobs. Indian Vampires.

[org.whodat]

"If this is true, this is one conservative who is voting for ANYBODY BUT BUSH next election." Seconded here. This, coupled with the fact that he won't protect us from the invasion by illegal aliens, just about does it. He's destroying our country, our culture, our freedoms and our right to make a living in the land of our birth. ENOUGH!!!

And people think that the drop in the poll is because of the war, BS, Protecting american jobs is protecting america, protecting the border is protecting america. Spending, spending, spending, spending on rat programs is mostly what is going on and that is not protecting america. In short as it now stands I'm setting the next election out.

[freeeee]

I'm sick of people with idealistic theories that have nothing to do with the situation at hand. That don't apply for reasons that you state.

I don't understand what that means. Could you clarify?

[Jeff Head]

As a senior manager, I left a company about four years ago over these issues.

I began consulting, communicating my own feelings about circumstances through writing books, helping other like-minded people publish their own books, using my self-taught html skills to develop web sites and have finally coupled those latter two with working on computer systems locally here in SW IDaho. Ultimately, a major earnings hit...but I am completely self-employed and we are making ends meet.

I still offer consulting services for offshore production...but find no one wants to hear my advise, which is to NOT use countries like China, to make sure that they use multiple sources in far flung geographic locations that are friendly to US interests, and to ensure that they develop ways now to keep critical capabilities and mfg. here in the USA as guard against potential geo-political upheavel.

Like I said, in most corporate board rooms, those are messages that they do not want to be hear right now.

[dennisw]

nowayjosé ...you on you own in this free market of ideas

[billbears]

Bush is using federal power to restrict the rights of states to regulate business and employment practices. What about states' rights?

Exactly, however be careful about bringing up that phrase. With all the Hamiltonians that have infested the 'conservative' party, it's okay for the national government to overrride the rights of the states even if what they're overriding is not covered in the Constitution under the rights of the nation's power

[Monty22]

Sadly, just about any service will be shipped overseas, following the manufacturing that left in the early 90's. And it won't be coming back.

This will directly lead to the destruction of the middle class in the USA, and probably a revolution down the road.