Article by Mark Levey, Senior Researcher and Rami

Fakhouri, Senior Editor

On August 6, the Governor of Ohio issued an

Executive Order prohibiting the use of State funds for offshore

services. This is the first such assertion by a State, and it comes

just weeks after the U.S. passed national legislation that sharply

increases H-1B and L-1 visa fees, a move that was perceived as

discriminatory against the Indian outsourcing industry.

Ohio Gov. Ted Strickland defended his order to ban offshoring of

state government work. In a letter to U.S. Trade Representative Ron Kirk,

Strickland said that, “Indian officials have admitted they do

not have a case in the World Trade Organization because my

Executive Order does not violate any trade agreement with

them.”

India's commerce and industry minister, Anand Sharma, in

Washington on talks with U.S. trade officials called the move by

Ohio, “ill-advised”, according to the Press Trust of

India, an Indian news agency.

While the WTO GATT Agreement on Governmental Procurement

generally bars discriminatory treatment by governmental entities of

signatory nations1, the U.S. accession to the AGP

maintains total exceptions to that commitment for at least 12

States, including Ohio, and allows partial discrimination in state

contracting for a number of others.2

News of the Governor's Order, and comments by Indian trade

officials and groups, have fanned smoldering expressions of

opposition to H-1B workers in the American political net-roots into

an expression of outrage against outsourcing.

This focusing of public attention upon trade and immigration

issues is ill-timed, coming as it does in the weeks leading up to

an American mid-term election in which high unemployment and a

stalled economic recovery are the central political issues.

Footnotes

1. See, WTO GATTS, Agreement on Governmental Procurement,

(AGP), http://www.wto.org/english/docs_e/legal_e/gpr-94_01_e.h…

; see, related, http://www.wto.org/english/docs_e/legal_e/legal_e.htm.

2. See, Annex 2 of the US Agreement, http://www.wto.org/english/tratop_e/gproc_e/appendices_…,

Click: United States, Annex 2.

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