You need to get him more accustomed to going outside and associating it with good things. How often does he get taken for a walk just for the sake of fun an exercise? If you make it more than just going out to do his business and then back in, he will be more used to the sounds and noises and distractions outdoors. Have you done a basic obedience class with him? What kind of training has he had? Are there any parks nearby you can take him to that will be nice that the train rumbling by? He's likely very smart, so this means you have to be smarter!

All good things come to doggies who go outside! Treats, praise, and fun! What is his biggest motivator - treats,, squeaky toy, a tennis pall ... Get everyone involved if you can, so everyone not only is having fun with him, but he's more well socialized with different people and things!