WASHINGTON: Republicans defending free trade and Democrats defending displaced workers split sharply on Feb. 12 over the benefits and drawbacks of moving jobs out of the United States. [There has been an outcry in India about the possibility of a ban on outsourcing in the U.S.]

Commerce Secretary Don Evans struck first, appearing on Feb. 12 morning on CNBC to defend the Bush administration’s position that the “offshoring” of U.S. jobs benefits the economy in the long run. Criticism of offshoring threatens principles of “free andtrade” that have been endorsed by every American president since Herbert Hoover, Evans said.

“Yes, American companies invest in other countries,” Evans said. “But guess what? Foreign companies invest here and hire American workers, which means higher standards of living and better paying jobs and it also means the consumers pay less for what they purchase.”

That ignores the pain of displaced workers, contended Senate Democrats. Standing before a “Keep Jobs in America” banner, they announced their plan to introduce the “Jobs for America Act.” Their bill would require any U.S. company to give three months’ public notice of any plan to lay off 15 or more workers in order to replace them with overseas workers. The notice would include the number of jobs, where they are being sent, and why.

The Democrats said their measure would remind companies of their local responsibilities and give government agencies time to help the workers and their communities cope with the loss of jobs. It would expand the Worker Adjustment and Retraining Notification Act, which was designed to help workers hit by mass layoffs. “Exporting jobs isn’t an accident ---- it’s (Bush) administration policy,” Senate Minority Leader Tom Daschle (D-SD) claimed.

He asked Bush to repudiate the president’s annual economic report, which was issued on Feb. 9 under his signature. The report, prepared by Bush’s economic advisers, said, “When a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically.”

As Gregory Mankiw, the president’s chief economic adviser, released the report, he went further. The shift of American jobs overseas as “just a new way of doing international trade” and “probably a plus for the economy in the long run,” Mankiw said.

Asked about the role of farming out production and services to low-wage countries, Mankiw said the practice was on the rise but said it would ultimately benefit the U.S. “I think outsourcing is a growing phenomenon, but it’s something that we should realize is probably a plus for the economy in the long run,” he said.

“We’re very used to goods being produced abroad and being shipped here on ships or planes. What we are not used to is services being produced abroad and being sent here over the Internet or telephone wires. But does it matter from an economic standpoint whether values of items produced abroad come on planes and ships or over fiber-optic cables? Well, no, the economics is basically the same.”

(By Permission, The New York Times)