International Trade Regulation of
Outsourcing
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.
As attorneys, we believe that there will be no 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.