Clinton, in India, says 'outsourcing is a concern for many'

But the U.S. rejects protectionism, she asserts

WASHINGTON -- U.S. Secretary of State Hillary Clinton finished up her trip to India on Monday with a promise to improve cooperation on high-tech trade between the two countries, but she offered no specifics about how that will be accomplished.

Instead, Clinton left with an agreement that the two countries will continue talking "with the objective of facilitating smoother trade in high technology between the two economies."

That statement appears to be an effort to lessen protectionist fears in India triggered by a number of events, including a comment in May, by President Barack Obama that the U.S. has developed a tax code "that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, N.Y."

But what has really drawn the concern of India's tech industry is the threat of action by Congress, namely legislation by Sens. Chuck Grassley, (R-Iowa), and Dick Durbin, (D-Ill.), that would set a number of restrictions on overseas firms that need H-1B visas to deliver their services.

In an interview on NDTV (New Delhi Television Ltd.), Clinton was asked about the concerns of India's business community by reporter Barkha Dutt. (Excerpt begins at the 8:50 minute mark.)

"Outsourcing is such a big issue for the Indian business community. We all remember President Obama's great metaphor of 'say yes to Buffalo, no to Bangalore' -- is this an unavoidable protectionism given the global economic meltdown?" asked Dutt.

"I think it's a friendly competition," said Clinton, who went on to explain that any country "is going to want to make sure we have enough jobs for our people. What President Obama has said is we do not want a return to protectionism."

"So we have to figure out how we are going to work together," said Clinton. "Outsourcing is a concern for many communities and businesses in my country, so how we handle that is something that we're very focused on doing in a way that doesn't disrupt the great flow of trade and services that go between our countries."

The agreement that the U.S. signed in India will be taken up by what is being called the High Technology Cooperation Dialog.

"I think the critical issue is whether all stakeholders have a voice in the policymaking process," said Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology and author of Outsourcing America. "To date, U.S. workers, especially American IT workers, have had no official channel with which to promote their interests," he said.

Hira said that it is clear that both U.S. business interests and Indian business interests are represented in the talks, 'But is there anyone representing the interests of U.S. workers? The answer is no. Since they are absent, or a more accurate description would be 'excluded,' American IT workers' interests can easily be ignored by politicians in the State and Commerce Department(s)," said Hira.

Copyright © 2009 IDG Communications, Inc.

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