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Bush: Outsourcing painful, but remedy is worse

Speech precedes anti-terrorism talks in Pakistan

Bush said the U.S. shouldn't "wall off our economy from the world through protectionist policies."


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NEW DELHI, India (CNN) -- Praising India's expanding economy, President Bush warned Friday that fears about job outsourcing to other nations should not prompt the United States to limit global trade.

"It's ... important to remember that when someone loses a job it's an incredibly difficult period for the worker and their families," Bush said in a speech in New Delhi.

"It's true that some Americans have lost jobs when their companies move their operations overseas," he said.

"Some people believe the answer to this problem is to wall off our economy from the world through protectionist policies. I strongly disagree." (Watch Bush explain why the U.S. and India are natural partners -- 2:36)

"The United States will not give into the protectionists and lose these opportunities," Bush said.

"For the sake of workers in both our countries, America will trade with confidence."

But he added that "India has responsibilities as well."

"India needs to continue to lift its caps on foreign investment ... and to continue to lower its tariffs and open its markets to American agricultural products, industrial goods and services."

Bush delivered the address just prior to traveling to neighboring Pakistan for talks on terrorism Saturday in Islamabad with President Pervez Musharraf. Pakistan is an important ally in the U.S.-led fight against al Qaeda.

Bush's arrival was preceded by widespread protests and a deadly attack Thursday outside the U.S. Consulate in Karachi. (Full story)

"On my trip to Islamabad, I will meet with President Musharraf to discuss Pakistan's vital cooperation in the war on terror, and our efforts to foster economic and political development so we can reduce the appeal of radical Islam," Bush said.

"I believe that a prosperous, democratic Pakistan will be a steadfast partner for America a peaceful neighbor for India and a force for freedom and moderation in the Arab world."

High-tech tour

Earlier Friday the president toured India's high-technology hub Hyderabad, underscoring a landmark U.S.-Indian nuclear power pact. (See the Bush itinerary)

Under the nuclear deal announced Thursday, India pledges to open up its 14 civilian nuclear reactors to international inspectors and keep power generation separate from its military program. (Full story)

The two nations also announced an arms agreement that Washington said would allow India to buy more sophisticated fighter aircraft and other high-tech arms from the United States, including F-16s and F-18s.

The arms decision will be viewed with interest in Pakistan, India's regional rival.

India was disappointed by a U.S. decision nearly 12 months ago to sell F-16s to Pakistan.

Hyderabad's large Muslim population shut down markets and businesses in the old quarters in protest over Bush's visit.

The protests reflect India's mixed feelings about the United States -- a country seen as a loyal friend by some and a global bully by others.

On Wednesday, nearly 150,000 protesters, most of them Muslims, demonstrated in New Delhi.

However, only a few thousand protesters took part in Thursday's demonstrations -- made up of a mix of social and environmental groups.

"Bush is a killer," one sign read.

Local police in Mumbai said at least 65,000 anti-Bush protesters rallied there Thursday. Protesters burned effigies and shouted slogans.

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