Bush: Outsourcing has a silver lining

Overseas growth good for U.S. producers, he says

BY RON HUTCHESON

Washington Bureau

WASHINGTON — President Bush found a bright side to outsourcing Wednesday, saying that the loss of U.S. jobs to foreign countries helps create markets for American business.

"It's true that a number of Americans have lost jobs because companies have shifted operations to India," he said in a speech previewing his trip next week to India and Pakistan. "We must also recognize that India's growth is creating new opportunities for our businesses and farmers and workers."

Bush's visit to South Asia is intended to strengthen ties to two countries on the front lines in the war on terrorism. His diplomatic mission is complicated by longstanding antagonism between India and Pakistan, both of which have nuclear weapons ungoverned by the Non-Proliferation Treaty.

Although Bush made sure to cover the big geopolitical issues in his speech, he acknowledged that many Americans are far more concerned about India's status as a magnet for jobs, especially in the high-tech sector. More than 1.2 million Indians work in high-tech jobs, many of them for U.S. companies or their affiliates.

Echoing a view widely shared by economists, Bush said the benefits from globalization more than offset the damage from lost jobs due to outsourcing. He noted that the United States accounts for only about 5 percent of the world's population.

"India's middle class is now estimated at 300 million people," he said. "That's greater than the entire population of the United States. And this middle class is buying air conditioners, kitchen appliances and washing machines — and a lot of them from American companies.

"Younger Indians are acquiring a taste for pizzas from Domino's, Pizza Hut," Bush added. "And Air-India ordered 68 planes valued at more than $11 billion from Boeing."

But even with India's growing prosperity, Americans buy more goods from India than they sell to Indians. The United States had a $10.8 billion trade deficit with India last year, because even though U.S. exports to India have been steadily increasing, imports from India have risen more.

Bush's prime objective in India is to remove the last hurdles to a landmark agreement that would acknowledge India's status as a nuclear power 32 years after it successfully tested a nuclear device. The agreement would open India's civilian nuclear program to international inspections while leaving it free to produce more nuclear weapons.

With time running out before Bush's visit, U.S. negotiators are pressing India for guarantees that the civilian program wouldn't be used to boost weapons production. Bush urged India to develop "a credible, transparent and defensible plan" to separate the two programs.

In Pakistan, Bush will seek to discuss both the war on terrorism and Pakistan's path to democracy. He praised Pakistani President Pervez Musharraf for his help in the war on terrorism, but said Pakistan "still has a distance to travel on the road to democracy."

He urged India and Pakistan to put aside the ethnic and religious tensions that have brought them to war three times since the two nations were carved out of the British Empire in 1947.