Eyes on Trade

Public Citizen's Global Trade Watch blog on globalization and trade

What's New -
Global Trade Watch

• January 20 - Press Release: Public Citizen Applauds Obama Administration's Appeal of Trade Ruling Against U.S. Dolphin Protection Measures
• January 06 -Press Release: Public Citizen Applauds Obama Administration's Continued Efforts to Reduce Teen Smoking
• January 04 - Listen to Lori Wallach talk about the WTO rulings' attack on consumer policies on The Kojo Nnamdi Show
• December 22 - Read the Teamsters, Sierra Club and Public Citizen's legal brief on the NAFTA Cross-border Trucking Case
  

2011 WTO Financial Deregulation

• Official Summary

Congressional Proposals

In terms of specific proposals at the federal level, there has been much discussion, but so far only three legislative proposals have been introduced that would directly restrict overseas outsourcing by the federal government:

• A weakened version of an anti-offshoring amendment to the Omnibus Appropriations bill of January 2004 forbids private contractors that win contracts through the A-76 bidding process from sending the work overseas, but only a very small proportion of contracts are awarded through the A-76 process. This prohibition will expire at the end of the 2004 fiscal year.
  
• A bill introduced by U.S. Sen. Dodd (D-CT) passed in the Senate by a 70-26 margin as a (modified) amendment to the "Jumpstart Our Business Strength" (JOBS) Act  on March 4, 2004 in extremely watered down form. This would have created a stronger prohibition against using federal tax dollars to subsidize pay for offshoring of U.S. jobs. However, as passed, it was significantly weakened by an amendment by Sens. McConnell (R-KY) and Frist (R-TN) that makes all provisions dependent on a certification by the Secretary of Commerce that they not "result in the loss of more jobs than [they] would protect and will not cause harm to the U.S. economy." This amendment was agreed to by unanimous consent (no vote taken).
  
• The original Dodd amendment was picked up by Rep. DeLauro (D-CT)  in the House. Rep. DeLauro offered it in the Budget Committee as a "sense of the House" amendment to the FY2005 federal budget resolution, where it was defeated along party lines by a 20-16 vote on March 17, 2004.

If you support these proposals, please let your Congressperson know.

Further Reading:

• Vote breakdown on modified Dodd Amendment passage
• "Election debate on job exports spills into corporate arena OFFSHORING," Financial Times (3/5/04)
• "'Outsourcing' And The Defense Debate," CongressDaily/A.M. (3/10/04)

Policy Tools and Challenges

Stopping the offshoring of government work requires changes to both the technical specifications (to be clear the service must be provided by a worker operating in the United States) and the supplier qualification language (to require a company to show that it can perform the government contract with U.S.-domiciled workers). Further, Congress could create a strong incentive against all offshoring by requiring that to be qualified for federal bids a company cannot conduct any offshoring – including in its nongovernmental work.

U.S. work has been offshored to several countries - China, Ireland, Russia and Israel among them. Interestingly, India, the hot offshoring destination for technology, is not a signatory to the AGP. The Bush administration supports offshoring (see comments by Mankiw and Snow), and has encouraged India to sign the AGP. Unless India signs the AGP, neither it nor other nonsignatories – including China and Russia, can attack U.S. anti-offshoring legislation at the WTO.