“Global services” are services that are delivered across national boundaries. The development of global services has created political strains in the United States and Europe, as service providers from countries with masses of highly educated (and less educated) workers seek opportunities to sell their services on a competitive basis.
The political strains have spawned xenophobic legislation and political action to contain the spread of globalization. The law of outsourcing reflects the cultural evolution of the service recipient countries and their political relations with countries of service providers.
Such strains have a familiar tinge. In the 1980’s, the United States conducted a campaign to reel in the “unfair trade practices” of Japan, which was exporting massive amounts of goods and creating economic imbalance. “Japan, Inc.” responded by bringing their manufacturing technologies and building factories in the United States and hiring American workers.
In the 2000’s, the allegations of “unfair trade practices” have been directed at China. China’s exponential growth in supplies of goods and, increasingly, services to American and European markets, its controlled currency peg and its communist legal system create economic and legal challenges to which the World Trade Organization and traditional trade relief are not well suited.
Other service provider countries have worked diligently to preserve the openness of American and European markets.
The politics of global services play out in individual countries. The politics of the service recipient countries define the laws that protect national interests, such as consumer protection, labor protection, domestic market protection, national security and foreign policy. The politics of the service provider countries define the laws that provide encourage the exportation of services.
Lawyers advise on existing and emerging legal issues that affect outsourcing. These issues are constantly evolving and require ongoing attention. Lobbying, the influencing of legislators, will continue to attract attention as interested constituencies seek to promote and protect their selfish political interests. The resulting legislation and political decisions reflect the dynamics of each individual country’s legal system and cultural heritage, as well as its emerging role in international trade in services.
Within the legal framework that results, enterprise customers and service providers have room to negotiate deals and engage in domestic and international outsourcing. Like project finance lawyers and international M&A lawyers, outsourcing lawyers apply both the international framework and the deal framework to promote their clients’ business interests.