International Trade Regulation of Outsourcing
Posted October 16, 2009 by Bierce & Kenerson, P.C. · 
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The Trade Act of 2002, signed by President Bush on July 27, 2002 , H.R. 3009, authorizes the President to negotiate trade agreements that will be approved, or disapproved, by Congress without any changes. The law identifies the same old American public policy objectives. In relation to trade in services and trade in intellectual property, the objectives stated for the Doha (Qatar) Round are essentially the same as set forth in existing WTO agreements under the Uruguay Round.
The principal negotiating objective of the United States regarding trade in services is to reduce or eliminate barriers to international trade in services, including regulatory and other barriers that deny national treatment and market access or unreasonably restrict the establishment or operations of service suppliers. [Section 2102(b)(2).]
For international outsourcing, this legislation may allow the extension of U.S. IT-enabled business services into foreign countries that presently restrict such services. This could provide benefits to U.S. IT and business process outsourcers, if they can find ways to leverage their systems. More likely, offshore service providers could enter the U.S. markets, but might be subject to certain restrictions that relate to foreign ownership of U.S. regulated industries. Currently, regulated industries generally manage the regulatory problems by supervising their services providers, rather than by declaring foreign service providers ineligible to work.
At that time, President Bush did not appears to contemplate any major changes in the existing Trade Agreement for Services, Trade Agreement on Intellectual Property or the Trade Agreement on Investment Measures. Neither of these agreements, which already grant substantial openness for trade in services and related intellectual property and direct investments, is as controversial as the Bush Administration’s use of anti-dumping rules against foreign steel.
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Filed under: White Paper
Tagged: business process outsourcers, outsourcing, service providers, sourcing, trade agreement