New Delhi: Terming as "misplaced" the fear of job loss due to banning outsourcing from developing countries, UNCTAD today (Feb 20, 2004) said offshoring was a legitimate part of global trade liberalisation.

"Offshoring was a legitimate part of global trade liberalisation and this enabled developing countries to leverage their competitive advantage - abundant, competitive labour and lower cost environment," UNCTAD Secretary General Rubens Ricupero said.

In a statement at the eighth session of the Commission on Trade in Goods, Services and Commodities, he said, "Despite some attempts at provoking Government measures in some countries, I do not think this (outsourcing) is amenable to Government control and will be driven by market forces."

Exhorting developing countries to unitedly thwart the move to ban business process outsourcing (BPO), the United Nations Conference on Trade and Development (UNCTAD) said third world nations should seek binding multilateral commitments to pre-empt any protectionist measure.

"We cannot argue liberalisation abroad and practice protectionism at home. However strong the short-term costs appear to be, the long-term costs (benefits from offshoring services) are greater - for consumers and jobs," the UNCTAD chief said quoting British Trade Secretary Patricia Hewitt.

The global outsourcing spend is estimated to be $ 320 billion which should go up to $ 585 billion by next year and $ 827 billion by 2008, and India accounts for three per cent of the global IT spend.