NFTC Disappointed at Senate Passage of Outsourcing Amendment

Saturday, 5 March 2005

"Even though the amendment was modified to limit its impact, we believe its message that the United States is going to build new walls around our economy is the wrong one," said Bill Reinsch, president of the National Foreign Trade Council. "We appreciate Senator Dodd's motivation - to protect government contracts and domestic workers - but if fully implemented the amendment would complicate our foreign relations, discourage U.S. innovation, and ultimately cost more jobs than it would save. Offshore outsourcing is an issue that demands careful and thoughtful debate and consideration, and there are many steps the United States could take to address it. Erecting more barriers to commerce, trade, and investment, however, is not one of them."

Modifications to the Dodd amendment include giving Cabinet agency heads, along with the President, power to decide which contracts are not subject to restrictions due to national security, or due to the availability of resources for the contract only outside the U.S. Another modification includes a certification from the Secretary of Commerce that the contract would not contribute to a loss of U.S. jobs or that it would not hamper the U.S. economy. While the provisions attempt to address the complexity of the outsourcing issue, Reinsch contends that they still fall short in repairing the damaging affects the Dodd amendment will have if it remains in the bill.

"Naturally, lawmakers and policy makers are concerned with the ramifications of outsourcing on the American worker. However, tacking on shortsighted, 'band-aid' legislation to treat symptoms will only stunt our growth in the long-term. A better course of action is to remain open to the economic promise of the rest of the world, allowing U.S. businesses to share ideas, technologies and opportunities with their foreign counterparts," Reinsch concluded.

The National Foreign Trade Council is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves 300 member companies through its offices in Washington and New York.

USA*ENGAGE is a coalition of over 670 small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. For more information on USA*ENGAGE and the harmful effects of unilateral trade sanctions, visit the USA*ENGAGE web site at