Washington, Feb. 11: President George W. Bush’s open defence of outsourcing has landed the issue smack in the middle of the campaign to elect America’s new President.

Democratic Party lawmakers today seized on the President’s unexpected support for the export of American jobs, putting the White House on the defensive, amid calls for the resignation of Gregory Mankiw, chairman of the White House Council of Economic Advisers on the issue.

“When a good or service is produced at lower cost in another country, it makes sense to import it rather than to produce it domestically,” Bush said in his annual economic report to the Congress yesterday. “This allows the US to devote its resources to more productive purposes.”

Mankiw has been quoted as saying in media briefings this week that “outsourcing is a growing phenomenon but it is something that we should realise is probably a plus for the economy in the long run”.

He is also quoted as saying: “We are not used to services being produced abroad and sent here over telephone lines as opposed to goods arriving in ships. But the economics are the same.”

The President’s comments on outsourcing dominated the airwaves last night even as Democrats were holding primaries in two states to elect their presidential nominee. Democratic candidates for the White House job have assailed Bush for not stopping the flow of American jobs to countries like India and China. It is estimated that three million American jobs have been lost since Bush came to office in 2001.

Yesterday, Pete Stark, a Democratic Congressman from California, said: “President Bush’s tax and trade policies have fuelled this trend in outsourcing, which has clearly contributed to job losses in our economy over the past three years.”

He accused the President of standing “idly by as jobs continue to take flight from the US, and now we know why — it is part of his economic plan”.

What has worried the White House, though, is criticism from a traditional Republican constituency — the National Association of Manufacturers (NAM) — today.

It accused the White House of being “insensitive” to unfair trade and complained of inadequate administration backing for American manufacturers.

The association’s president, Jerry Jasinowski, today threatened that he would be taking a closer look at the policies of Senator John Kerry, who is most likely to challenge Bush in the presidential election in November.

Rejecting calls for Mankiw’s resignation, White House spokesman Scott McClellan said today: “That is kind of laughable. Our economic team is doing a great job helping the President work to strengthen our economy even more.”

McClellan said: “We certainly don’t want to do anything that would undermine free trade…. Certainly free and fair trade is important to strengthening our economy even more and expanding job growth here at home.”

New software centre

BearingPoint Inc. said today it has opened a software development centre in India that will grow to as many as 3,000 employees, says a Reuters report.

The Virginia-based company said its Chennai development centre is already fully operational and is targeted to grow to 2,000 employees over the next two years. BearingPoint said it could add another 1,000 people in India if demand is strong enough.

The India centre will handle software development, integration and maintenance. BearingPoint said the hiring spree in India is not going to affect its current staff.

“No one at BearingPoint will lose their jobs as a result of this,” Siddharth Pai, managing director for the India Global Development Centre, said. “It’s a net add.”

BearingPoint now has about 150 to 175 people in India, mostly from subcontractors.