Bush: No Offshoring Protectionism

U.S. President George W. Bush on Friday ruled out protectionist measures by the United States to counter the loss of jobs in the country because of offshore outsourcing.

“We don’t fear competition,” said Bush addressing students at a business school in Hyderabad, India. People do lose jobs as a result of globalization, and it is painful for those who lose jobs, but protectionism would not be the right way for the U.S. government to respond, Bush said.

Globalization provides great opportunities, and the 300 million strong middle class in India provides a classic opportunity for American farmers and entrepreneurs and small businesses, Bush added.

A large number of U.S. technology companies, including Microsoft Corp., Oracle Corp., Hewlett-Packard Co. and IBM Corp., have set up software development, support and business process outsourcing operations in India.

India’s software and services exports are estimated to grow by 32 percent to US$23.4 billion in the fiscal year to March 31, according to data released last month by the National Association of Software and Service Companies (Nasscom) in Delhi. The country is on track to achieve $60 billion in exports by 2010, Nasscom said.

About 70 percent of the country’s software and services exports are to the United States, according to Nasscom.

A number of trade organizations in the United States have been protesting against the loss of jobs in the country, and this was a key item of the campaign by Democratic Party Senator John Kerry for the U.S. presidential election in 2004. The Washington Alliance of Technology Workers (WashTech) of Seattle, Washington, for example, objects to outsourcing to India as well as to an increase in H-1B visas for workers from India coming to the United States.

In a press conference Thursday in Delhi, Bush said he would like more H-1B visas to be issued to Indian engineers, scientists and physicists. The current H-1B visa limit of 65,000 a year has proven inadequate for India’s outsourcing industry, according to the industry.

For related CIO content, read Simple Successful Outsourcing.

For related news coverage, read Indian Outsourcer Satyam Looks to China, Study Downplays Outsourcing of Computer Jobs, Outsourcing Moves on Up and India Lures High-Tech Manufacturers.

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-John Ribeiro, IDG News Service