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Bush defends outsourcing in heartland

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FRONT PAGE - FIRST SECTION: Bush takes outsourcing battle to US heartland
By James Harding in Cleveland, Ohio and Edward Alden in,Washington
Financial Times; Mar 11, 2004

President George W. Bush yesterday staked out a firm defence of economic globalisation, travelling to a state hit hard by manufacturing job losses to denounce Democratic attacks on the "offshoring" of US jobs.

After several months of the Bush administration floundering on the issue, the president told an audience of women entrepreneurs in Cleveland, Ohio: "I want the world to buy America.

"Instead of building barriers to trade, we must break down those barriers.

"The old policy of economic isolationism is a recipe for economic disaster," he added. "America has moved beyond that tired defeatist mindset and we're not going back."

The speech was the opening salvo in a co-ordinated campaign responding to Democratic charges that the disappearance of some US jobs to low-wage countries was damaging the economy, administration officials said yesterday.

It contrasted sharply with earlier uncertainty in Washington over economic policy. Gregory Mankiw, chairman of the president's Council of Economic advisors, was harshly criticised by many senior Republicans for saying earlier this year that outsourcing of jobs was good for the US economy.

Yesterday's robustly worded speech was aimed at persuading voters that economic openness had been a source of growth and prosperity and that Democratic efforts to restrict the movement of jobs abroad would hurt the economy.

Before Mr Bush's speech yesterday, Scott McClellan, White House spokesman, said: "There are obviously concerns in our changing economy about jobs going overseas and that's why the president will outline what is a better way to strengthen our economy and create jobs here at home."

The president pointed out that Honda, the Japanese carmaker, employs 16,000 people in Ohio, one of the most keenly watched battleground states of the 2004 election, and that another 6.4m Americans across the country "draw their paychecks" from foreign companies. Since the launch of the North American free trade agreement in 1994, Ohio's exports to Mexico had tripled, he added.

Mr Bush won Ohio by a 3.5 percentage point margin in 2000 and no Republican has made a successful bid for the White House without winning the state. But unemployment in the state has risen from 3.9 per cent when Mr Bush took office to 6.2 per cent in January.

Advisers to John Kerry, the Democratic presidential candidate, have become concerned that the White House has sought to recast the Democrats as isolationists. A senior Kerry aide denied the Democratic challenger was a protectionist but said the economic climate in America would not allow Washington to sign "future trade agreements without decent labour and environmental standards".

Mr Bush's defence of free trade is also tempered with support for programmes to help workers who lose their jobs.

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