Report | Trade and Globalization

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

Briefing Paper #201

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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.1  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 offsets 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 offsets costs the United States thousands of jobs and poses a serious threat to national security.

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