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Offsets and the lack of a comprehensive U.S. policy: What do other countries know that we don't?

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Publication Date: April 2008

Publisher(s): Economic Policy Institute

Author(s): Owen Hernstadt

Topic: Labor (Employment and labor supply)
Trade (Export-import trade)

Type: Brief


Over the past several years, the outsourcing of hundreds of thousands of white-collar and service jobs from the United States to countries like India and China has
received increasing attention. But there is a particular outsourcing arrangement that takes place under the radar, that involves high-paying, high-technology jobs in the export sector, and that impacts national security. This arrangement, known as an offset, is the transfer of technology and/or production from a U.S. company to another country in return for a sale. While off sets are virtually unregulated in the United States, other countries have well established policies that are feeding the development of their own industries by bringing U.S. productive capacity and technology to their shores. The failure of the U.S. to adopt and enforce straightforward, transparent, and common sense policies to govern off sets costs the United States thousands of jobs and poses a serious threat to national security.