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Anti-BPO bills may jeopardise US trade pacts
Seema Hakhu Kachru in Houston | April 21, 2004 16:30 IST
The proposed US legislation aimed at banning or restricting outsourcing may violate the country's constitution and jeopardise American obligations under various international trade agreements, according to a study.
"Much of the proposed legislation, if implemented, could invite retaliation from other nations," the study by the National Foundation for American Policy said, noting that in 2001, 6.4 million American residents were employed by foreign corporations in the United States.
"Before moving further down this path of passing or proposing more such measures, policy makers should be fully informed and confident that such actions are both legally sound and capable of withstanding international challenges," it warned.
So far, at least 36 states have introduced more than 100 bills to curb or ban offshore outsourcing, and legislation on the issue has also proliferated at the federal level, the study observed.
"Most of these bills have not yet become law, but the sheer volume of bills seems to indicate that more may become law," it said.
State outsourcing legislation generally applies to contracts between private businesses and the state because these contracts, as opposed to contracts between two private companies, are directly under state control, the study added.
The proposed state legislation also has, however, ventured into regulating the operations of private sector call centres that contact or receive telephone calls from state residents or entities, including centres that send financial, medical, or other data overseas.
"International concerns are significant since much of the proposed legislation, if implemented, could invite retaliation by other nations," said Stuart Anderson, executive director of the NFAP, and Shannon Klinger, who co-authored the study.
The study says it isn't meant to serve as the last word on this issue, adding that: "Its aim is to serve as the beginning of a necessary dialogue that transcends emotion and politics and highlights the core constitutional and legal concerns raised by the proposed outsourcing legislation."
The NFAP is a nonpartisan, Arlington-based public policy research organisation.