Powell wades into debate over outsourcing in India

By Seattle Times news services

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But Powell told a news conference "there's no quid pro quo here" and that "outsourcing is a reality of the 21st century global economy."

"Outsourcing" refers to the practice in which U.S. firms hire workers overseas, many of them here, to do jobs such as telephone customer support, accounting and transcription previously done by U.S. workers.

The number of U.S. jobs moving to India is still relatively small — fewer than 200,000 — but has become controversial in a U.S. presidential election year that has seen anemic job growth despite an expanding economy.

American job losses might be offset after "we can get the benefit of open trade," Powell said during one of two public appearances here in which sharp questions were raised about the growing U.S. political debate and India's anxious reaction.

Powell faced tough questions from Indian college students on a lively television program over what one student called U.S. hypocrisy.

One student gibed that the United States should outsource the counting of election results in the coming presidential election "because you've got backward stuff." India, the world's largest democracy, votes electronically over a period of days.

John Kerry, the Democratic presidential candidate, is promising to crack down on outsourcing if he is elected. Members of Congress and state legislators also are threatening new restrictions in the face of criticism from trade unions and others.

Powell and other U.S. diplomats are using the debate and India's anxiety to press for more and speedier liberalization of this nation's markets — and the extraordinary potential offered by 1 billion consumers.

Although it has taken dramatic steps toward reform since 1991, India still has a ban on direct foreign investment in its retail sector, and imported agricultural goods face a 38 percent tariff. Those barriers, U.S. officials say, are impeding efforts to pare a trade deficit with India that topped $8 billion in 2003.

In related developments:
 
• Labor groups asked the Bush administration yesterday to investigate whether to impose steep duties on Chinese goods because of alleged workers' rights abuses they said have caused massive U.S. job losses.

John Sweeney, president of the AFL-CIO, the United States' largest labor organization, said Chinese companies are able to pay their workers 47 to 86 percent less than they should because of routine workers' rights violations.

• The United States yesterday accused Mexico of violating world trade rules by imposing a 20 percent tax on soft drinks using any sweetener other than cane sugar grown in Mexico. In a complaint to the World Trade Organization, U.S. Trade Representative Robert Zoellick said the tax is a "discriminatory and protectionist" effort to lock out potentially hundreds of millions of dollars in U.S. high fructose corn syrup.

Compiled from USA Today, The Washington Post, Los Angeles Times, Chicago Tribune and The Associated Press

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