Bush Defends U.S. Outsourcing

By Peter Wallsten

Times Staff Writer

8:12 AM PST, March 3, 2006
HYDERABAD, India — Touching on one of the most politically heated aspects of the U.S. relationship with India, President Bush today defended American corporations that "outsource" jobs overseas in pursuit of cheap labor.
Bush spoke on the final day of a state visit to India in which he declared that the two nations, estranged for much of the 20th Century, are now "closer than ever before."
Shortly thereafter, Bush departed India and landed in Islamabad, Pakistan, where he is scheduled to spend Saturday in talks with President Pervez Musharaf amid intense security following a bombing in Karachi that left a U.S. diplomat dead.
"People do lose jobs as a result of globalization, and it's painful for those who lose jobs," the president said during a "round-table" discussion with students and young business people at the India School of Business, about 800 miles south of New Delhi.
"But the fundamental question is, 'how does a government or society react to that?'" he added. "And it's basically one of two ways. One is to say, losing jobs is painful, therefore, let's throw up protectionist walls. And the other is to say, losing jobs is painful, so let's make sure people are educated so they can find — fill the jobs of the 21st century."
The outsourcing issue has been a political hot-button throughout the Bush presidency, with the White House arguing the practice makes economic sense. But many Democrats and labor union leaders accuse corporations of undermining American workers.
The debate threatens to undermine the major accomplishment of Bush's three-day stop in India: a landmark nuclear cooperation agreement in which the U.S. would lift its ban on selling nuclear materials and technology to India.
India, in exchange, has agreed for the first time to make some of its nuclear reactors available for international inspection — a move that U.S. officials believe could limit the production of nuclear bombs.
Congress must approve the agreement, but some lawmakers — particularly in economically hard-hit industrial states — could be reluctant to support a deal viewed as favorable to India.
Critics charge that the Bush administration ceded too much in the agreement, giving India the freedom to close as many reactors as its wants to inspection, and to escalate its weapons production.
Bush said today that the deal will help India and the U.S. move beyond its traditional estrangement in world affairs.
"We're getting rid of the Cold War," he said at the business school.
On outsourcing, Bush is seeking to recast the issue in the public's mind.
"We won't fear competition, we welcome competition, but we won't fear the future, either, because we intend to shape it through good policies," Bush said. "And that's how you deal in a global economy. You don't retrench and pull back. You welcome competition and you understand globalization provides great opportunities."
Bush's remarks underscored the leading role played this week by U.S. corporations in pursuing tighter ties between the U.S. and India, a potentially fruitful market with a population of 1.1 billion and growing.
Bush's White House has built unprecedented ties to the business community, closely cooperating with corporations on everything from campaign strategy to lobbying for tax cuts and Social Security reform.
On Thursday, the president hosted a joint meeting of CEOs from each country focusing on trade policies and other economic issues. The event included executives from corporate giants Cargill Inc., J.P. Morgan Chase, Citigroup, Honeywell, PepsiCo., Visa and Xerox.
Also, administration officials predicted this week that the nuclear agreement could reap "billions" of dollars for U.S. businesses that would finally be allowed to sell technology and fuel to India.
Today, Bush toured an agricultural university to highlight growing cooperation on agriculture matters. He lifted a pumpkin, surveyed mangos and even briefly tried to till a garden.
In a speech later today in New Delhi, Bush predicted the future success of U.S. businesses in Indian markets. He offered a litany of companies already making forays into India.
"Americans who come to this country will see Indian consumers buying McCurry Meals from McDonald's, home appliances from Whirlpool," he said. "They will see Indian businesses buying American products like the 68 planes that Air India recently ordered from Boeing.
"They will also see American businesses like General Electric and Microsoft and Intel who are in India to learn about the needs of local customers and do vital research that makes their products more competitive in world markets," he added.
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