US election focus on jobs could backfire on Ireland

In the super-heated atmosphere of the US presidential campaign, Ireland is at risk of being caught in the crossfire as Obama and Romney slug it out on the issue of outsourcing, writes LARA MARLOWEin Washington

‘OUTSOURCER in chief” is perhaps the strangest epithet levelled by Barack Obama and Mitt Romney against each other in the US presidential race.

Ireland is not yet in the firing line but, should US companies be criticised for creating jobs in Ireland during the campaign, Irish officials have prepared a pre-emptive strike in the heat of a US election debate about outsourcing.

Obama bases his attacks on Romney on a front-page investigative report published by the Washington Post on June 22nd. From 1993, Bain Capital, which was founded by Romney, invested in companies that specialised in relocating US jobs to low-wage countries including China and India, the Post reported, calling Bain “pioneers in the practice of shipping work from the US to overseas call centres and factories making computer components”.

Obama and advertisements broadcast by his campaign in swing states continually emphasise the words “pioneers in outsourcing”. Six companies investigated by the Post – Corporate Software, Stream International, Modus Media, GT Bicycle, SMTC and Hippac, a US subsidiary of Hyundai – began outsourcing customer support or manufacturing during the 1990s.

Independent fact-checkers say much of the outsourcing took place after Romney nominally left Bain in 1999 to organise the Salt Lake City Olympics. His campaign argues that he cannot be held responsible for decisions taken in his absence.

Romney seized on another front-page article published by the Washington Post on July 10th, entitled “Obama struggles to make headway on outsourcing” to label Obama the “outsourcer in chief”. The Post noted Obama’s failure to follow through on his promise during the 2008 campaign to “end tax breaks to companies that ship jobs overseas”, a promise he is again making on the campaign trail.

Obama has also been reluctant to declare China a currency manipulator, something Romney promises to do on his first day in office. Robert Scott of the pro-labour Economic Policy Institute said Chinese exports to the US cost some 450,000 US jobs between 2008 and 2010.

The use of stimulus money to finance “green” energy companies under the 2009 Recovery Act is the basis of the latest Republican attacks on Obama for alleged outsourcing.

On June 10th, the day the Washington Post cited a 2010 study by the Department of Energy which found that 60 per cent of the 40 largest wind farms financed by stimulus money used foreign components, the Republican National Committee set up a website called ObamanomicsOutsourced.compurporting to explain “how Obama shipped the recovery overseas”.