The United States is the home -country for the largest amounts of foreign licensing and direct investment. Therefore, its policies understandably arouse some of the major trade unions of such outward moments. One of these critics is organized labor, which argues that foreign production often displaces what would otherwise be US production. For example, big corporations have been criticized because they decided to shift some or all of their production to less costly countries, such as Mexico, because of the NAFTA agreement. Trade unions also cite many examples of highly advanced technology that has been at least partially developed through governmental contracts and then transferred abroad. An example is Boeing’s transfer of aerospace technology to China to produce aircraft parts. According to trade unions, if Boeing did not transfer the technology, China would purchase the products in United States, thus increasing U.S. employment and output.
Closely related to the question of job loss is the question of whether the outsourcing of production puts downward pressure on wages in the home country. On the other hand, there is anecdotal evidence that it does. For...
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