Outsourcing... It's the offsets stupid.

[Joanne98]

Offsets and the lack of a comprehensive U.S. policy
What do other countries know that we don't?
by Owen E. Herrnstadt

Over the past several years, the outsourcing of hundreds of thousands of white-collar and service jobs from the United States to countries like India and China has received increasing attention.1 But there is a particular outsourcing arrangement that takes place under the radar, that involves high-paying, high-technology jobs in the export sector, and that impacts national security. This arrangement, known as an offset, is the transfer of technology and/or production from a U.S. company to another country in return for a sale. While offsets are virtually unregulated in the United States, other countries have well-established policies that are feeding the development of their own industries by bringing U.S. productive capacity and technology to their shores. The failure of the U.S. to adopt and enforce straightforward, transparent, and common sense policies to govern offsets costs the United States thousands of jobs and poses a serious threat to national security.

Despite the loss of over 3 million manufacturing jobs in the United States in just the past few years and the emasculation of key industries like shipbuilding, tools, autos, electronics, and semi-conductors, U.S. policy makers maintain their refusal to adopt meaningful responses to the decline in the industrial base. Instead of developing policies to foster and strengthen key industries, policy makers relegate decisions to major companies in the private sector,2 where a short-term focus on individual firms' profits has devastating results for the overall economy and national security. In the meantime, U.S. competitors develop and aggressively pursue policies that are intent on maintaining and increasing their industrial base (see, for example, U.S. Department of Commerce 2007b, Appendix F).

Strangely from a national security standpoint, offsetting is common in production by the defense industry, and the number of offset deals in that industry alone is staggering. Over the 14-year period 1993-2006, U.S. companies reported over 8,500 transactions, valued at $42 billion, that involved the transfer of production and technology to 42 countries. A U.S. government report concludes that over 16,000 jobs were lost each year over the 2002-05 period due to offset transactions in the defense industry.

http://www.sharedprosperity.org/bp201.html

[truedelphi]

1. Is this policy a failure as the OP states, or is it just another

Of a series of deliberate maneuvers to destroy this country??

[John Crighton]

2. Howdy

There is a serious lack of topics dealing with "trade" in both Democrat and Republican forums on the internet.

With an 800 billion dollar per year (and still rising with a weak dollar) trade deficit, you'd think people would be talking about it.

[ramapo]

3. Can;t interfere with corporate freedom

I was not aware of this issue until now. If I understand it correctly, it sounds like another example of the complete, unfettered freedom given to the corporations to do anything and everything in pursuit of profit. The irony is that the answer to a call for regulation is that it'll cost jobs, all while the country hemorrhages jobs.