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Rediff.com  » Business » US experts against protectionism

US experts against protectionism

Source: PTI
March 12, 2004 12:17 IST
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US job security is better served by expanding domestic training and education opportunities than by employing protectionist measures to prevent companies from transferring work to lower-wage markets, according to a panel of experts.

"Isolating America from the world is not the answer," Assistant US Trade Representative Chris Padilla said at a conference on job outsourcing hosted in Washington by the Center for Strategic and International Studies.

A far better approach, he said, is the Bush Administration's policy of promoting job growth by negotiating freer markets for US goods and services, enforcing existing trade agreements, and increasing trade adjustment assistance for displaced US workers.

President George W Bush has described isolationism as a 'recipe for economic disaster.' The United States "has moved beyond that tired, defeatist mind-set, and we're not going back," Bush said.

Panelists at the CSIS conference on Wednesday -- including Democratic Representative Adam Smith of Washington state and representatives from business and academia -- generally agreed that protectionism is the least advisable path to securing US job growth.

But they also agreed that US workers are increasingly worried about their jobs and increasingly inclined to blame trade agreements for job losses, actual and potential.

"There is intense anxiety about jobs, and the anxiety is real," said Lael Brainard, a former Clinton administration official now with the Brookings Institution. The feeling among US workers, she said, is that "nobody is safe in the international economy."

Brainard said at the conference that US policy makers face the daunting task of building support for freer trade while also addressing public anxieties and finding ways to provide health benefits, re-training options and insurance for displaced workers.

Unlike the more generous government-mandated welfare systems in much of Western Europe, she said, "Our system just doesn't have a very good way to deal with displaced workers."

She also said that surprisingly little is known about the exact number and types of US jobs that have been lost to outsourcing. She predicted, however, that outsourcing is likely to increase as overseas labour markets become more competitive.

"We need to accept that we won't maintain an advantage in every single industry," she said.

Congressman Smith said that much of the current outcry on outsourcing is based on "anecdotal" evidence and that the General Accounting Office of Congress is in the process of compiling more reliable data.

While he said he disagreed with the 'protectionist talk' that emerged during the Democratic presidential primaries, Smith also took issue with what he called the Bush administration's "relaxed" approach to labour problems.

"People in this country are legitimately struggling" and should have access to the training and education they need to better compete with overseas workers, Smith said. He said he supports a substantial increase in trade adjustment assistance for US workers.

Smith also called on the administration to crack down on countries that fail to live up to their commitments to open their markets. He cited India and China as "examples of countries that are reaping the benefits of global trade but have not reciprocated by opening their own markets."

"We need to use trade rules to our advantage," Smith said.

On March 9, speakers recalled, US Trade Representative Robert Zoellick testified before the Senate Finance Committee and sounded a similar note on the importance of enforcement.

Recalling a recent meeting with Indian officials, Zoellick said he had acknowledged that outsourcing is a 'complicated' issue but also that India must accept its responsibilities under global trade rules.

"The Indians have absolutely no right to complain, because they don't belong to the government procurement code in the WTO sets obligations for transparency in procurement deals, Zoellick said.

"If countries around the world that are emerging economic powers want to get the benefits of the system, they're going to have to contribute to the system," he said.

Meanwhile, a group comprising of US labour unions and manufacturers has said offshore outsourcing is the biggest threat to the American worker.

"The rules of the global economy are written solely to benefit multi-national corporations," said United Steelworkers of America District 10 Director John DeFazio.

"We're in a race to the bottom where only a few will win," the Pittsburgh Tribune Review and Pittsburgh Post-Gazette quoted him as saying.

The United Steelworkers is part of the Coalition for Trade Sanity, a group that includes the Pennsylvania Manufacturers Association, the Pennsylvania AFL-CIO and Manufacturers for Free Trade.

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