Lou Dobbs Tonight

Aired April 20, 2004


Congress Probes Iraq War; Arab Hatred for United States Deepening?




DOBBS: Lisa, thank you -- Lisa Sylvester from Washington.


The National Foundation for American Policy just released a study, a study that alleges legislation to block the shipment of American jobs to cheap foreign labor markets and a number of states is outright unconstitutional. The board of the group include former aides to Vice President Cheney, President Reagan, and President Bush.


Stuart Anderson is the director of the foundation. He's written that state and federal legislation to restrict outsourcing is a rising threat to American competitiveness. He joins us tonight from Washington, D.C. Sir, good to have you with us.




DOBBS: Now, states are reacting, many states are reacting to the outsourcing of jobs, using taxpayer money to in fact ship jobs in their states to cheap overseas labor markets. And you think that's unconstitutional? Why?


ANDERSON: Well, essentially, Lou, what courts have found is that states don't have the right to make their own foreign policy or make their own trade agreements or trade policies.


There's something called the Foreign Commerce Clause in the Constitution. And courts have found that that, along the foreign affairs powers that are reserved for the federal government, generally make it unconstitutional for states to do their own thing when it comes to trade. For example, in the case of sanctions against companies involved in Burma in Massachusetts, Supreme Court struck down that law in Massachusetts.


DOBBS: This is somewhat different, is it not, Stuart, because they're exercising authority and control over taxpayer dollars?


ANDERSON: Well, it's somewhat different but, again, essentially, what you're talking about is the state is making their own foreign commerce decision, and particularly in cases where there could be retaliation for foreign countries.


DOBBS: What in the world would a country do in retaliation for the state of Indiana, for example, or the state of California, deciding they're not going to send their money overseas and take away the jobs of hard-working Indianans or Californians.


ANDERSON: Well, if you look at California, which is such a large part of the U.S. economy, they would essentially say that U.S. companies and U.S. citizens aren't going to be able to bid on contracts in their country. And that could cut off a lot of the market.


DOBBS: That's a little different, isn't it, bidding on a contract. What we might do, I guess, retaliation quid pro quo would be that India or Thailand or the Philippines or Romania wouldn't permit -- wouldn't come here to outsource their jobs. Wouldn't that be quid pro quo?


ANDERSON: Well, At the federal level, and the states are generally obligated to this, the U.S. signed the Government Procurement Agreement which says the U.S. won't discriminate based on where something is done for services for procurement for the government. And so the U.S. has used that to open up markets. And it allows U.S. citizens to be selling their know-how to other countries. It is a good thing.


DOBBS: But when you're exporting an American job overseas purely on a wage price basis, killing an American job, laying off an American, and giving that job to a worker overseas for export back into this country, that, certainly, wouldn't apply, would it?


ANDERSON: Well, it depends what the situation is, Lou. Well, certainly, if it involved a particular state making what a court decided was their own trade policy, it would apply.


DOBBS: It's trade policy, I suppose, and some far extension and reason, it's better, it seems to me, exercising authority over its own treasury and taxpayer money within its own state. But let me ask you this, if you are concerned about the constitutionality of the states taking action, how concerned are you about the abrogation of the sovereignty of the United States and giving up its constitutional responsibilities to tribunals of NAFTA or of the World Trade Organization? Because that's a clear, clear contravenes of the U.S. Constitution and powers of sovereignty.


ANDERSON: Well, clearly, that's one those issues that's going to continue to be controversial. So far, there haven't been a lot of constraints in that area. DOBBS: What are you talking about? We lost 88 percent cases where the United States was a defendant before the World Trade Organization.


ANDERSON: Yes, I understand that, Lou. In many cases, U.S. consumers are going to benefit from some of these decisions.


DOBBS: I see. How do they benefit, Stuart? How do they benefit?


ANDERSON: Well, you're benefiting if there's lower prices.


DOBBS: Lower prices. I see. We can kill millions of jobs just so a trinket comes down a few cents. Is that the idea?


ANDERSON: That's probably not the way I would put it.


DOBBS: I suspect not. But that is the effect, is it not?


ANDERSON: No, not necessarily, Lou. Markets go both ways. Unless the U.S. is going to engage in belligerent activity every time there's a trade dispute, it's better have these decisions made in a multilateral way.


DOBBS: Sir, I know you have a philosophy at your think tank and ideology if you will. But let me ask you this, isn't it about time to get belligerent? We have 5 percent of our GDP in deficit that mounts each year. We are outsourcing American jobs. We're killing middle class American jobs, high value jobs and we're not creating new ones. Isn't it time for people to get belligerent?


ANDERSON: Well, when you talk about the trade deficit, it's interesting, because when you look at France and Germany, they have a trade surplus. And because of their inflexible labor markets they have twice the unemployment rate of the U.S. Also, on services you end up -- the U.S. actually has a surplus in white-collar services we sell abroad. So, we have actually more to lose in retaliation.


DOBBS: And what has been happening to that surplus in technology and service jobs over the last three years, Stuart?


ANDERSON: It's -- it's still a $50 billion surplus. So still...


DOBBS: Well, the fact is, the surplus has declined 36 percent. That surplus is declining while our deficits and trade and general current account are declining. Isn't it time -- I appreciate ideological position, your political position. But isn't it time for people to start looking at this honestly? Putting away the scales of ideology and partisanship and say what is the best thing for the men and women who work in this country?


ANDERSON: Well, I think the best thing is to move to a more positive approach in job creation which would involve improving some of the things you pointed out on your show, which is education and job training. But also look at what California did in a worker's compensation reform. These are positive measure that could actually help create jobs in the country.


DOBBS: And it takes so much longer than outsourcing an American job overseas. Stuart Anderson, I hope you'll come back, because this is an important and critical debate. We appreciate you participating.


ANDERSON: Thank you for having me.


DOBBS: Stuart Anderson, thank you.

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