While conceding that the issue of outsourcing was 'complex,' the United States has said India had no right to complain about proposed legislation in Congress and some state legislatures prohibiting the trend as it was the most 'closed' economies in the world.
"The Indians," US Trade Representative Robert Zoellick told the Senate Finance Committee, "have absolutely no right to complain because they don't belong to the 'government procurement code' in the World Trade Organisation, which sets obligations for making procurement deals transparent.
"Frankly, they are not that liberal on the services side," he alleged, adding that India, which is attracting some of the outsourced US jobs, is maintaining "one of the most closed economies in the world."
The services sector, he said, offers increasing opportunities for developed and developing countries to work together for mutual benefit and demanded that more competitive developing countries such as India, China and Brazil open their markets in order to sustain support for open markets in the US and elsewhere.
"If countries around the world that are emerging economic powers want to get the benefits of the system they are going to have to contribute to the system."
Zoellick said bluntly that he would rather negotiate agreements that open trade in two directions than simply give one-way preferential entry to the US market.
White House Press Secretary Scott McClellan told reporters earlier that while President George W Bush is against economic isolationism and for free trade, he also wants 'fair trade.'
Analysts point out that the phrase 'fair trade' is an ambiguous phrase which can be used either to promote free trade or to block it.
Zoellick in his testimony reflected that view. Arguing the case for 'fair trade,' Zoellick said, "95 per cent of the world's customers live outside our borders, and we need to open those markets for our manufacturers, our farmers and ranchers, and our service companies."
Zoellick said India's 'once-closed economy' has become substantially more open in recent years but the country has been a 'difficult player' in the current round of WTO negotiations.
He claimed to have asked the Indian government that it must be more 'forthcoming' in trade talks.
He claimed the US had 'an important victory in June 2003 when the WTO rejected India's challenge to US laws on determining the country of origin of textile and apparel products.'
In a prepared statement about reopening the Chinese market further, he said: "We recognize the enforcement of China's commitments (to the WTO) requires sticks as well as carrots, and we are certainly willing to utilize the tools Congress has made available to us."
"These include the careful use of the China Textile Safeguard (which the Administration invoked for three product categories last December); anti-dumping laws; the product-specific safeguards; and WTO dispute settlement, an option that we may need to deploy very soon."
Meanwhile, US Democratic Senator Dianne Feinstein has called for a Treasury investigation of the outsourcing practices of American Banks, the Pasedena Star News reported.
She said she was concerned that sensitive personal information may be at risk in outsourcing.
Many large US banks use third-party contractors from other countries for a variety of core banking functions, she said, including payroll and merchant processing, customer call centers and mortgage servicing.
"I am greatly concerned that national banks are sending American citizens' sensitive financial data abroad to third- party vendors without adequate privacy and security protections,' Feinstein said in a recent a letter to John D Hawke Jr, comptroller of the currency.
Feinstein has requested, among other things, that banks direct their third-party providers to 'fully disclose breaches in security resulting in unauthorized intrusions that may materially affect the bank or its customers.'
