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The Legal Validity of Anti-Offshoring Laws, Bills, and Policies in the United States and Other Countries

34 Pages Posted: 18 Apr 2012  

Amar Gupta

Massachusetts Institute of Technology (MIT)

Deth Sao

Pace University

Date Written: April 17, 2012


The adoption of anti-offshoring legislation by federal governments can potentially violate the commitments made by such governments to the World Trade Organization and other bilateral and regional trade agreements. This motivates examination of the constitutionality and legality of governmental actions in the offshoring arena. The Obama administration has taken several steps to favor performance of tasks in the United States. Over 40 state governments in the US have considered anti-offshoring legislation, and some of these bills have been enacted by the respective legislatures. According to the US Constitution, the federal government possesses exclusive rights over the areas of interstate commerce, foreign affairs, and foreign trade in the US. All these constitutional principles are arguably violated when state governments approve anti-offshoring legislation. Some of the policy directives of the European Union (EU) and other countries also hamper the practice of offshoring. In particular, those relating to protection of privacy of personal data are discriminatory in nature and place foreign suppliers of services at a disadvantage compared to their domestic counterparts. The US and EU are major proponents of free trade; this is a two-way street, and comes with benefits and constraints. These issues are analyzed with respect to the current situation.

Keywords: anti-offshoring legislation, impact on domestic IT workforce, impact on foreign IT workforce; constitutionality of restrictions on offshoring; offshoring of services; World Trade Organization; GATT

Suggested Citation

Gupta, Amar and Sao, Deth, The Legal Validity of Anti-Offshoring Laws, Bills, and Policies in the United States and Other Countries (April 17, 2012). Available at SSRN: or

Amar Gupta (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
Building 32-256
Cambridge, MA 02139
United States
617-253-0418 (Phone)

Deth Sao

Pace University ( email )

White Plains, NY
United States

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