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Q&A Frank Pallone

Pallone: BPO bashing

How often have you heard Frank Pallone described in the Indian media as a 'friend of India'? Ad nauseam, right? Good. That is precisely why his opinion on this whole brouhaha---as seen from India--- over American work being outsourced to India matters. And maybe less so, his opinion on India's place in global geo-politics as ordered by the US. Here he is, in a one-on-one with BT Online's Ashish Gupta.

Q. You are seen as a 'friend of India'... so why are you against outsourcing?

A. I am a Democrat. My work in the US and around the world has been oriented around the average person---you know, the Little Guy. In my constituency and large parts of the country, a lot of people have been impacted by it, and so they are naturally concerned. In the US, we are a Capitalist country. We don't have any significant social welfare system, so when people lose their jobs, they're not automatically retrained... they don't necessarily have income. So it's become a major concern, and what I've done during this trip is highlighted the issue on my own---because I want different leaders and elected officials here to understand that this is a problem in the US.

And one way to counteract it, is to talk about the fact that there are export opportunities for US goods in India. In other words, that trade is a two-way street, and that the US can benefit from exporting goods to India. And also that there are Indian companies that are beginning to invest in the US and create jobs there. One example that we highlighted was Ranbaxy, because they have a plant in the district.

And so we went to two other Ranbaxy facilities. I thought that it was significant when I went to the Pravasi event that the (Indian) Prime Minister in his speech talked about how Indian companies can invest overseas up to a hundred per cent of their net worth. So that should allow more companies to invest in the US, which is already happening. So rather than say 'Outsourcing is good for the US', which I don't think it is, I talk about other ways that the US can benefit from trade with India, and that we need to do more to promote exports to India and encourage more Indian companies to invest in the US so that there is some trade coming the other way.

Q. People have the idea that on one hand you want Free Trade (import duties reduced to zero), but on the other are opposed to the free movement of professionals...

A. Keep in mind that historically, the majority of Democrats have not been advocates of this free trade legislation in the same way that Republicans have. Remember you primarily get the viewpoints of the American politicians who are in power.

And so, many of us on the Democratic side were not as quick to move to this Free Trade because it does have an impact on the US. Not to say that we want to put up protectionist barriers, but we have not in our party been as much of an advocate of complete Free Trade because of the concerns of American workers.

Q. Many people say that this outsourcing controversy exists because of the presidential elections this year....

A. I don't think that President Bush has addressed this at all. He has been a total advocate of Free Trade. In the past three years, he has signed a number of Free Trade Agreements (FTAs) with many countries that didn't exist before he was there. So I don't think that it is a presidential issue.

And I also want you to know that it hasn't reached the point where it's a major election issue at all. It's a concern that I have for the future. And for whatever reason, I don't know why. I can speculate---the emphasis has been more on India than any other country. And that worries me because as an advocate of strong Indian-US relations, I don't want India to be perceived as the target.

And I don't know why India is the target, other than what has been happening in the last few months. There has been more attention to the white-collared workers. You know, the IT sector, healthcare sector... and India is perceived in the US as being more professional. The fear is that India could become the outsourcing hub for white-collar jobs as opposed to China for blue-collared jobs (and that's why China hasn't been the focus of as much attention).

And also that in the last three years, three million jobs have been lost due to the economic slump. If you had better economic times, I don't think there would be this much focus.

And if the economy does improve significantly, then I don't think there would be this much focus, because people who lose a job will be able to find another job.

Q. Given the fact that you are an advocate of India, how do you see this SAFTA, ASEAN, regional trade coming through?

A. I think in Washington, SAFTA like the EU is very much supported. We think that it is very important for US policy that South Asia achieves an economic union and perhaps in the long-run a defence union. I can easily see the US having some defence pact like the NATO with South Asia. All countries normalise relations and become friends---that's what is in the US interest. Customs union, defence union.... and be at peace.

Q. India could be seen as a services base for the world, but not as a manufacturing base. FDI is not coming into manufacturing. Do you think there is a perception that China is better?

A. I don't think it is a perception, it is more historical. I mean China is historically seen as a manufacturing base. I don't see why that couldn't change for India as well. The interesting thing is during this trip, there was a lot of things mentioned by Indian politicians and business people about the agriculture sector, which I had not paid attention to, especially in Gujarat where the CM talked more about agriculture.

And there are opportunities for the US to export machinery, processing and that type of thing...food processing. I think there are manufacturing opportunities in India as well. The perception is that India is professional, white-collar, IT. I don't think that has to be.

Q. Third-quarter growth of 8.2 per cent in the US... do you think there was a tech slowdown and that the economy in boom now?

A. I wouldn't say that there is a boom, but there is a recovery. A jobless recovery, so far. And the issue is whether it results in more job creation. Even the numbers for the last month in terms of unemployment were not that great.

And that, clearly, will be an election issue. And whether or not this is growth that's not impacting the average person.

Q. All the companies that are outsourcing... how are they taking this outsouring thing? How is their interaction with you?

A. We are essentially a Capitalist, market-oriented economy, and the corporations don't pay a lot of attention to us politicians. They do their own thing. It's sort of up to us to make the point. They are going to go wherever the money is.

Q. You have been canvassing for India's permanent seat on the Security Council. Why?

A. In the last 10 years since we started the India Caucus, the US-India relations have grown closer together. And one of the things that I find is the decoupling of foreign policy versus India versus Pakistan. They are not seen together anymore.

And the other thing---there has been a recognition in the US of India becoming a major power, and certainly has the potential of being a superpower in the future. So I think as time goes by, there is more and more support growing for India becoming a permanent member. The number of permanent seats extended has been on hold in the last couple of years, but when it's revisited, there will be more support in the US for India than there was, say, three years ago.

Q. Despite India being a nuclear power?

A. Nuclear, there is another change, even if officially the President and Congress may not say 'Support India being a nuclear power'. I think unofficially that it has been now acquiesced.

And that's another change in the last few years. Now there's no in part reference to Pakistan, because of Pakistan now transferring all its technology to North Korea, Iran, and now Libya in the last week. I think American politicians understand that India is the opposite---that it's homegrown, it's under control, and it's defensive in nature.

And so the opposite is true. We are now acquiescent in India's nuclear power.

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