- The Washington Times - Tuesday, March 9, 2004

The Bush administration this year is stepping up pressure on China and India to open their markets to U.S. goods and services, U.S. Trade Representative Robert B. Zoellick told a Senate panel yesterday.

The White House’s top trade official laid out administration trade priorities and responded to concerns that blue- and white-collar jobs are increasingly shifting overseas because of rising foreign competition.

“Isolating America from the world is not the answer,” Mr. Zoellick told the Senate Finance Committee in a defense of the administration’s trade policies, echoing recent comments by President Bush and Treasury Secretary John W. Snow.

Since Mr. Bush took office in January 2001, the economy has shed 2.2 million jobs.

“Some of those jobs are moving overseas, and increasingly the jobs that are moving overseas are high-paying and higher-skilled jobs,” Sen. Max Baucus, Montana Democrat, said at the hearing.

China is frequently a source of concern for lost factory jobs, and India for “offshoring,” by which firms export back-office jobs to low-wage nations.

“I hear it from the press, from my colleagues in Congress and from constituents. Manufacturing plants moving to China. Call centers moving to India,” Mr. Baucus said.

The debate has become especially intense, and an election-year topic, since N. Gregory Mankiw, chairman of the president’s Council of Economic Advisers, said “outsourcing is just a new way of doing international trade. More things are tradable than were tradable in the past and that’s a good thing.”

Forrester Research, a technology research company, projected that 3.3 million U.S. service industry jobs would move offshore to countries like India, Russia, China and the Philippines by 2015. Firms like Bank of America and IBM already have turned to foreign workers for some back-office and information-technology labor.

Mr. Zoellick did not endorse Mr. Mankiw’s view but neither did he repudiate offshoring. He did say help should be available for people to adjust to a dynamic and changing economy.

And he said the administration would help American companies sell their goods and services in growing markets, like China and India, by using the World Trade Organization and with political and economic pressure.

The administration has been “aggressive” with China but the country still has to make progress in a number of areas, including enforcement of intellectual property rights for products like movies and software, tax rules that discriminate against U.S. companies and artificial barriers for farm products, Mr. Zoellick said.

The administration is moving toward a case against China at the WTO that is specifically aimed at tax policy that discriminates against U.S. semiconductor manufacturers, Mr. Zoellick said. The case also would send a broader message that China must live up to obligations it negotiated when it joined the global institution.

“If they don’t fix it very soon, we’re going to bring a case,” Mr. Zoellick said of the tax policy.

With India, Mr. Zoellick said that in meetings last month he told officials in New Delhi they would have to make it easier for U.S. companies to sell their products or risk a backlash against offshoring.

“And the point that I emphasized to the Indians is that if we’re going to remain open for them, it’s got to be a two-way street,” Mr. Zoellick said.

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