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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings Session 5 Foreign Direct Investment Restrictions: Consequences for Trade and Technology Moderator: Sylvia Ostry, University of Toronto CHARLES WESSNER: It is my pleasure to introduce Sylvia Ostry. Dr. Ostry's work has originated some of the topics that we are considering in this conference. She would no doubt not want to take responsibility for every part of the program, but our project does owe her an intellectual debt. SYLVIA OSTRY: First I want to say that the OECD work on investment is an important issue. One reason why investment has gone to the top of the agenda is because of the disappointing results in the Uruguay Round. The Uruguay Round introduced radical new issues. I say "radical" in a very fundamental sense: services, trade-related intellectual property, and trade-related investment. They got two out of three. Investment really dropped off the table for a variety of complicated reasons, but while the Uruguay Round was going on in Geneva, the world was being transformed in the mid-1980s largely by the enormous wave of FDI [foreign direct investment]. There was a slowdown in 1991 and in 1992. We are now experiencing the beginning of a new wave, but it will not be as big as it was in the 1980s. The end result of the slowdown in the 1980s was that the degree of global interdependence became much tighter. The Brookings project that I was involved in called this interdependence "deeper integration." This term essentially involves the far greater ubiquitousness of the multinational corporation. Since that transformation has taken place, and since the multinational enterprises are the main agents for trade, investment, and technology flows, the investment issues are now at the top of the post-Uruguay agenda. This issue is also associated with new definitions of market access that involve effective access by exports and effective presence by investment. This issue has pushed the policy template of deeper integration inside the border.
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings Deeper integration resembles the paradigm of the U.S.-Japanese structural impediments initiative. It involves trade flows, the interrelationship between trade and investment flows, technology flows, and it involves structural impediments. Compared with the surge in the 1980s and the slowdown due to the recession, the new surge looks very different. For the first time in history the main outflows are into non-OECD countries, such as East Asia, particularly China. So if this is the beginning of a new phase of deeper integration, one could argue that any investment policy should involve the non-OECD countries. On 24 May 1995 we received a major announcement that OECD ministers had requested that the negotiations begin immediately on a multilateral agreement on investments (MAI) and that they should be finished by 1997. As a former drafter of communiques, I consider the ambiguity in this announcement to be very well done. The words are very careful. The announcement describes "a freestanding international treaty open to all OECD members and the European Community and to accession by non-OECD-member countries, which will be consulted as the negotiations proceed." I do not understand what that means. It also states that ministers "should prepare for discussions on investment in the WTO, which it would be appropriate to envisage in the future and encourage the OECD to cooperate with the WTO to this end." The OECD has played a major role on other issues. It did all the basic work on services. It did all the basic work on trips. It did all the work on agriculture, but it never did anything that was not done with full linkage with the GATT. This is a very different project. This is moving to rules and dispute settlement. But the OECD has never had rules. It has had voluntary codes. It is significant that the growing resentment, which I have seen at meetings and heard of from the excluded countries, unfortunately threatens a new NorthSouth dispute. And unless we take firmly into account the importance of the Uruguay Round, the friction will be very serious. Thank you. Investment, Trade, and Corporate Strategies Bruce Duncombe, Department of State I am here to make a few remarks on the relationship between trade and investment and to say a few additional words about the exercise that we have launched in the OECD. We hear more and more today about market access and that the increasing emphasis on market access will push investment issues to the fore of future trade negotiations. This is particularly true of trade in services, in which delivery often depends on having a physical presence in the market where the services are sold. But the need for a presence in the market is also crucial for many manufactured goods in which design must be tailored to market requirements, in which service and reputation are important and in which a fast response is frequently key.
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings Thus, although foreign direct investment was once seen as a substitute for international trade, it is viewed increasingly as a complement to trade or even a necessary component of trade. In fact, foreign direct investment is growing much more rapidly than trade. Since the early 1980s, foreign direct investment has nearly quadrupled. Companies increasingly need an investment or presence abroad to increase their exports. For example, U.S. subsidiaries abroad are the best customers for U.S. exports. Over one-fourth of the U.S. merchandise exports go to subsidiaries and affiliates of U.S. companies overseas. This means that exports to affiliates of U.S. companies overseas account for more than two million of the eight million U.S. jobs supported by our overall merchandise exports. Removing foreign barriers to U.S. investment is thus a key element in promoting U.S. exports and enhancing the international competitiveness of U.S. companies and the U.S. economy. It is vitally important to ensure that U.S. companies investing abroad have access to markets—that is, the right of establishment—and are treated fairly and are otherwise able to compete on the same basis as other companies, both foreign-owned companies as well as domestic firms. The agenda in which the United States is promoting this market access includes a bilateral investment treaty program in which the United States signed bilateral investment treaties with 35 countries. One of the important features of the U.S. prototype of the bilateral investment treaty is that U.S. companies do have the right to either national treatment or most favored nation treatment, whichever is more favorable, both in the establishment phase as well as the postestablishment phase. This is very, very important from the point of view of market access as viewed by the United States, and it is one of the issues that we will be particularly concerned with in the multilateral agreement on investment in the OECD. Other countries generally do not have this as a cornerstone of their investment policy, in that they would have access to markets in the establishment phase. It provides a scope for screening, for example, foreign investments. It means that in some countries you would not necessarily have access to the initial sale of shares of stock in privatizations. As we know, privatizations are taking place around the world. Within the OECD itself, another $200 billion or so of privatizations is envisaged probably by the turn of this century. So, market access is very important. Dr. Ostry referred to the fact that we have had discussions with the Japanese. We have also had discussions with the Koreans that were aimed at the particular problems that American investors have encountered in a number of these countries. The United States supported the services negotiations in the Uruguay Round and is particularly concerned, and is watching very closely our market access on financial services. We are also very supportive of the initiative in the OECD that was launched at the OECD ministerial meeting last week. Dr. Ostry mentioned how the multilateral
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings agreement on investment refers to nonmembers, but let us look at the other part of what the ministers approved, that is, the structure of the investment agreement itself. For the OECD initiative, the ministers provided for a multilateral agreement on investment that will provide a broad multilateral framework for international investment, with high standards for liberalization of investment regimes and investment protection and with effective dispute settlement procedures. We in the United States deem this as very important. First of all, on the liberalization front, we will certainly be looking at the outcome of the GATT negotiations on services and then telecommunications. We will be looking to see, once those outcomes are determined, whether or not in the OECD context it might be possible to go beyond those sectoral liberalizations just as, for example, we expect in the OECD, and if it will be possible to go beyond the rather limited trade-related investment measures [TRIMS] results that we had in the Uruguay Round. We do believe that the OECD countries will be able to do better on TRIMS than they did in the Uruguay Round. We will also be looking at liberalization in a more generic, nonsectoral sense by way of having rights to establishment rather than rights to most favored nation or national treatment only in the postestablishment phase. In the OECD context there are still some countries that have screening mechanisms and limit access of foreign investors to the initial sales of shares in privatizations. High on the MAI agenda for the United States will be significant accomplishments on the market access front. We are also concerned about investment protection, and we will seek the free right of transfer of funds, absence of performance requirements, and expropriation that is taking place only for a public purpose in a nondiscriminatory manner, and on the payment of prompt, adequate, and effective compensation, as set out in the international law standards. We are also looking at dispute settlement. The exact form of dispute settlement, both for investor-to-state and for state-to-state dispute settlement, will be worked out as the negotiations unfold, but we are concerned that investors will have the right to take governments to dispute settlement, and that, in some cases, governments will want to take other governments to dispute settlement. For the investor-to-state dispute settlement mechanism, of the 25 OECD countries, 22 are members of ICSID [International Center for Settlement of Investment Disputes]. I would not be surprised that, if the parties to a dispute cannot agree to another forum as a default mechanism, the ICSID mechanism would be available under the multilateral agreement on investment as at least a forum that would be offered for binding international arbitration. There are models in the NAFTA [North American Free Trade Agreement] and the WTO for how to handle government-to-government dispute settlement. Precisely what forums will be adopted for the multilateral agreement on investment will be worked out during the negotiations. Now I would like to comment on one point that Dr. Ostry made and that is in
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings regard to the OECD as opposed to the WTO. Although it is true that in recent years there has been a lot of investment flowing to the Pacific Rim, it remains the case even today that approximately 80 percent of the foreign direct investment flows on an annual basis between OECD countries. There is an enormous amount of flow between OECD countries, often in the form of mergers and acquisitions as part of the overall corporate structures and strategy of the investors rather than in the form of greenfield investments. Greenfield investments are important, but mergers and acquisitions are certainly the dominant type of foreign direct investment flow today, and the lion's share of that remains between the OECD countries. So we believe that, in that sense alone, the OECD is a suitable forum in which these negotiations can be carried out. We recognize, however, that nonmembers are interested in what is happening and are concerned. We have had consultations with nonmembers about the program of work that is taking place in the OECD. For example, there are five countries that are on membership track for the OECD (four countries in Central Europe and Korea). We have consulted all five of them. The OECD has an established forum for dealing with the so-called dynamic nonmembers. These are basically countries on the Pacific Rim, plus Chile, Argentina, and Brazil. The dynamic nonmembers met recently in New Zealand with representatives from the OECD Secretariat and a number of the OECD countries as part of an ongoing dialog. They were joined by India, China, and Indonesia, and there were consultations on the investment initiative in the OECD. We recognize that there are concerns on the part of some nonmembers about not being parties to the negotiations. We have an outreach program to hear their views and keep them informed as to the work that we are doing, but we believe that if a country is going to have a high standard agreement, it needs to be done with the OECD. In APEC [Asian Pacific Economic Council], we did agree on some nonbinding investment principles. They are at a rather low standard. We are aiming for a high standard agreement. Just as nonmembers found added value over the postwar period to becoming members of the GATT and the International Monetary Fund (because they were not there at the time of the establishment and the setting up of the initial disciplines), we believe that nonmember countries will find it in their interest to accede to an investment agreement that is negotiated in the OECD. Thank you. Asymmetries in National Patterns of Foreign Direct Investment: Consequences for Trade and Technology Development Simon Reich, University of Pittsburgh Recent extensive empirical work by the Office of Technology Assessment has done much to add validity to the claim that there are at least two distinct
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings patterns of behavior among the world's leading multinational corporations in regard to how they link their trade and overseas investment policies. Traditional patterns of behavior have often meant policies that are designed to substitute foreign trade for foreign direct investment. The export of finished products has therefore been replaced by the formation of overseas affiliates and building of fully integrated overseas plants. The manufacturing process has subsequently been shipped abroad by firms—first, the final assembly process but eventually the entire process—as they seek to take advantage of lower overseas labor costs and avoid protectionist trade barriers. Economists, studying this pattern of corporate behavior, claim to have identified a routine pattern that they label ''product cycle theory." But the OTA's work supports the notion that a second, alternative corporate strategy exists. Instead of replacing domestic production with production at the manufacturing plants of their foreign affiliates, some multinational corporations focus their direct investment policy on efforts to increase domestic exports. This trade-promoting corporate strategy places a premium on intrafirm trade or, more broadly, trade within traditional parent-supplier networks as a conduit for increased exports. To achieve this goal, foreign direct investment focuses on the development of wholesale and manufacturing assembly facilities rather than fully integrated plants. The optimal goal of such an investment strategy is to increase domestic exports, not to substitute domestic production for foreign production. Minimally, although the overall volume of exports might nevertheless fall as a result of overseas investment, it will not fall as precipitously as would normally be expected. Crucially, the high-value-added end of the production process will be retained at home. This "trade-promoting" approach to investment by corporations challenges the traditional foreign direct investment pattern of behavior because it is designed to sustain the firm's domestic manufacturing base and shift as little of the production process offshore as possible. Evidence suggests that such a pattern of "trade-promoting" behavior by multinational corporations is systematic, widespread, and, where appropriate, effective in sustaining a vibrant domestic manufacturing base while increasing foreign sales. The capacity to pursue this strategy is, however, curtailed by three factors: the limits of host government regulation, the exogenous effects of macroeconomic forces, and requisites of sectoral constraints. Nevertheless, a major bifurcation in the preferred patterns of direct investment behavior among the world's leading firms is readily evident. The preference in behavior appears strongly correlated with the country of origin of the foreign direct investor. Japanese firms appear to be the leading exponents of this alternative, trade-promoting strategy, as measured by the concentration of their investments and consistently high levels of IFT [intrafirm trade]. This observation is evident in data concerning both their global patterns of investment as well as their investments within the United States, where they
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings enjoy sustained free market access within a market characterized by minimally intrusive regulations. Other new investments by some German and Korean firms show preliminary evidence that they are engaging in similar patterns of behavior. The capacity of these firms to invest in ways that maximize exports to the United States is, in part, a product of the American policy of national treatment that minimizes government regulation in the hope of maximizing the volume and gains of foreign direct investment. This approach seems to be justified, in view of the record aggregate growth in foreign investment in the last 15 years. Anglo-American firms have often encountered a different pattern of regulation when investing abroad. They have often been forced by host governments to invest in fully integrated production facilities and in exchange market access for patents and have often been denied any investment access at all. Recent evidence suggests, for example, that a series of "structural barriers" continue to deny U.S. firms the type of access to the Japanese market that their Japanese partners enjoy in the United States. Indeed, the denial of such access has become so routine that some U.S. government and corporate officials have concurred confidentially that it may be better to avoid entering such markets at all and to move on to other less-regulated or "structurally impeded" investment markets. This approach has become an implicit part of U.S. government policy, with the decision to focus on "emergent markets'' for both trade and investment, and to turn away from some mature markets. I argue that such an approach bears a heavy cost. The consequences of this unreciprocated access and the "avoidance strategy" it has spawned are important for at least three reasons. These apply directly, although not exclusively, to Japan, traditionally the most elusive market among OECD members for U.S. investment. If the analysis suggesting that foreign direct investment has taken on increased importance in enhancing the significance of intrafirm trade is indeed correct, then the persistent inability of U.S. firms to invest in Japan naturally curtails the capacity of U.S. firms to export to Japan. With the majority of U.S.-Japanese trade accounted for by intrafirm trade, and with and overwhelming proportion of that trade being among and within Japanese firms, the inability of U.S. firms to invest in Japan and thus sell goods there has major implications for the recent, present, and future size of the bilateral trade deficit. It may indeed go a long way toward explaining the durability of the trade deficit in the face of significant currency fluctuation. Furthermore, constraints on the ability of foreign firms to invest in another country affords that country a sanctuary home market. Although competition between domestic firms may exist, the collective effect is the creation of a sanctuary market, and in some cases, this generates cartelistic arrangements. Here, artificial profits are often generated as domestic consumers are forced to pay artificially high prices. This is undoubtedly the case in many sectors in Japan, where a variety of goods—from agricultural to consumer products—cost more
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings than identical goods sold overseas by those same Japanese firms. Thus, the inability to invest thwarts competition and awards domestic firms artificial profits to subsidize exports. Finally, preliminary evidence suggests that these same artificial profits serve domestic firms in a new, irreplaceable manner. As the cost of successive rounds of development of new high-technology grows at exponential rates, firms are increasingly pressed as to how to finance successfully the research, development, engineering, marketing, and distribution of innovative products. Even the largest computer companies, for example, have had to enter into strategic alliances so as to raise the necessary capital to develop the next round of semiconductor chips. Sanctuary markets therefore provide firms with artificial profits that prove to be an effective source of capital in financing these efforts. The policy implications of this issue are not without major significance. Faced with this problem in the case of Japan, administration officials have tended to pursue economic possibilities in large, untapped potential markets such as China, Brazil, Southeast Asia, and Eastern Europe. The potential flaw in this approach is that U.S. firms often face competition in these third markets from the very firms that benefit from the privileges of sanctuary markets. Because Japanese firms are armed with artificial profits that subsidize sales and finance new technology development, U.S. firms face the short-and long-term prospect of being outcompeted in their efforts to attract new customers. Second, the investment-access problem may not be confined to Japan. It may prove to be a growing problem, even in the age of apparently growing liberalization, globalization, and deregulation. A variety of regional requisites and agreements, nontariff (e.g., technical) barriers, and the consolidation of private sector access barriers have compounded a tendency by some countries to use Japan's traditional public sector regulatory behavior as a model for development. Although this tendency has been most avidly discussed in the behavior of newly industrializing economies, recent evidence points to the use of discriminatory trade barriers in the Vizegrad countries of Eastern Europe against U.S. products, as well as the denial of trade and investment access in select cases in other OECD countries—such as Westinghouse's recent experience in Germany. Finally, it appears increasingly likely that such issues as the linkages between trade, investment, and high-technology will have to be managed in the context of multilateral, regional, and bilateral cooperative frameworks if policy friction is to be avoided. Anecdotal evidence suggests that the onus is increasingly on those critics of negotiated agreements to justify their claim that a laissez-faire approach yields an optimal outcome for all parties. Left alone, the international economic system appears under too much stress to hope for satisfactory, nonnegotiated outcomes. In sum, foreign direct investment access appears to be the key to the realization of global and regional liberalization, to mutually beneficial and balanced trade, and to the capacity to fund the next generation of technological develop-
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings ment. In turn, the failure to secure satisfactory access among the home of the world's largest multinational corporations does not augur well for global free trade, for the future competitiveness of America's largest and most prosperous firms, or for the vitality of the U.S. economy. Thank you. Sanctuary Markets and the Development of New Industries Michael Gadbaw, General Electric I am going to talk about General Electric, the role of technology and technology policy, the impact of the global framework of trade and investment, and, finally, I will make an observation about the role of multinational corporations in shaping the global environment. First of all, GE prides itself on being a technology-based company, whether it is aircraft engines, engineered plastics, or advanced imaging equipment, built around technological discoveries, or whether it is in our more traditional lines of business, such as advanced turbines for power generation, energy-efficient lighting products, or locomotives and other transportation equipment. The harnessing of technology is key to our competitiveness and essential to our globalization strategy. This means that we have very strong views about the role of governments in promoting technology, and, at the same time, we are very realistic about the environment in which we must operate. Our basic strategy has been to build strong technology-based partnerships that enable us to penetrate markets and harness the capabilities of local partners. To cite a few examples, in aircraft engines we have what I believe is the most successful joint venture in the world with a French company, SNECMA, which is now the second largest manufacturer of aircraft engines in the world. And, in power generation, technology-sharing arrangements allow us to capture a large share of the global power generation equipment base. Part of my responsibilities are to spend my life traveling around the world, counseling GE businesses on the relevance of the global framework for trade and investment—relevance, that is, to our business problems as we encounter them, particularly in emerging markets. There is a consensus globally as never before about the direction in which the system should go and the policy orientation that individual countries must choose. This orientation, more than anything, is driving the globalization strategies of companies such as General Electric. In Russia we struggle with the absence of basic legal and tax regimes. We are in China and India because we see these countries as the megamarkets of the next century, based on policies that are essentially liberal and market oriented. The departures from this free market model are blatant. In emerging markets it is amazing how local content requirements and nontariff barriers make a mock-
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings ery of newly negotiated trade concessions, with forced technology transfer arrangements accepted as the order of business. In developed markets, restricted procurement regimes, anticompetitive market structures, and laws and business practices that do nothing to combat the institutionalization of corruption in global markets are prevalent as we look at the international system. What is interesting is the extent to which these departures from the ideal policies that we would all embrace are justified implicitly or explicitly by the desire to capture some technological edge. In emerging markets, it is the desire to capture a piece of the technology pie. In developed markets, it is to capture some monopoly rents to feed the insatiable appetite for funds to develop new technologies. This leads me to an observation that is a response to the question, "So what?" More than at any time in history, multinationals play a critical role in shaping the policies of the new global marketplace. Multinationals are the beneficiaries of both the liberalization initiatives and most of the remaining restrictions. We are entering a period in which you cannot have it both ways. The world is too small. There will be less and less tolerance for inconsistent policies. Failure to get ahead of the liberalization process will come to haunt companies more quickly than ever before, increasing the risk that a company or a policy will choose the self-serving, short-term choice. This is true whether the multinational is a U.S. company, a German company, a Japanese company, or a Singapore, Malaysian, or Indonesian multinational. Thank you. DISCUSSION SYLVIA OSTRY: We heard one message here that there are different systems, and the need to invest and the linkage with trade and technology means that domestic impediments, including corruption, bribery, lack of law, lack of transparency, are affecting the freedom of the multinationals. Is that your message? There are system differences, and deeper integration means that there is a latent pressure for harmonization of regimes? TAKASHI CHIBA: I believe that international investment is one of the very effective means of rectifying the trade imbalance among the nations. Mr. Duncombe mentioned that national treatment must be guaranteed for international investors. In this respect, I am concerned that in the United States, Congress and government officials are arguing that the so-called conditional national treatment must be applied to the investors. BRUCE DUNCOMBE: It is true that recent Congresses have enacted legislation that has conditional national treatment provisions. The record also shows that
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings there were many bills that were introduced into the previous Congress that also contained these provisions but were not enacted into law. We recognize that there is a concern on this matter. However, the record shows that, where there are conditional national treatment provisions as part of the legislation, foreign firms have had access to these programs, and I am aware of only one case in which a foreign firm was denied access to a program. I believe what we are talking about is a small blemish on an investment climate that is really very hospitable to foreign investment. SIMON REICH: In regard to Dr. Ostry's comment suggesting that there was a latent process of convergence, I suggest that we qualify that because, despite the exogenous economic factors that should be pushing us toward convergence, if you actually examine the contrasting behavior of different firms, it is by no means clear that the convergence is toward an Anglo-American variant. In examining the behavior of new entrants into the American market in the case of German firms, for example, it does not appear at all clear that there is convergence toward this Anglo-American variant. SYLVIA OSTRY: Let me correct that. I did not mean to say that there is convergence. I said that there are pressures that create system friction. CHARLES WESSNER: I have a question for Michael Gadbaw. First, why do you think we can get an agreement on investment? How could we enforce it? Would you also comment on Professor Reich's last point that the models that we discussed today that seemed to work most effectively are the East Asian models? There were also a lot of compliments concerning effectiveness of the European model, in semiconductors, for example, which is one that has high performance requirements, is slow to accept acquisitions, and encourages greenfield investments. MICHAEL GADBAW: First of all, I am not optimistic in the short run about the prospects for negotiating an investment treaty. An investment treaty at the multilateral level is less likely to lead policy than to follow policy. What can make one optimistic is what is happening at the national level within countries, what is driving them toward liberalization of trade and investment. I am acutely aware of the problems alluded to in even the German market. Here is a country that is at the forefront, or should be at the forefront, of both regional and multilateral liberalization, and, yet, it is way behind many European countries in implementing the European Community laws, particularly with respect to procurement practices. However, I am optimistic that those companies that are the biggest beneficiaries of that regime are also very cognizant of the impact that this will have on their ability to penetrate the U.S. market and to work with U.S. companies in
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International Friction and Cooperation in High-Technology Development and Trade: Papers and Proceedings penetrating global markets. As that awareness becomes more and more acute, these companies will influence their country's policy toward greater openness. The fact that German utilities are now taking some of the money they made in the power generation sector and are putting it into telecommunications is a further sign that they will realize that you cannot have it both ways. You cannot play in a global game and have an exclusive national game at the same time. It is difficult to generalize about the Asian model. Because companies pursue different parts of a strategy depending on the business and the product line, it is difficult to characterize an entire company as embracing one or another strategy. But my conviction is that, as the world becomes smaller as a result of this liberalization process, we are at the dawn of an era in which the prominent model will be rationalizing on a global basis, wherein it is no longer possible for a company to go into even a protected market and think that that protection is going to be secure. I see this constantly in GE businesses. GE accepts a partner based on the notion that a certain regime or environment will survive. Within three or four years, that environment is changed. That commercial relationship does not work because the problem it was designed to solve, the barrier it was designed to get over, no longer exists and GE is stuck with a commercial relationship that does not work because it is not realizing real commercial value. As companies realize the implications of this, they will move to force the process. In Europe, this happened with the Single Market Agreement. Companies came forward and said we have to accelerate the integration process. In Asia, as the Koreas of the world reach out to try to change their policies, there is more pressure toward a convergence. Yes, there will be different approaches. There will be a lot of bumps along the way, but it is not a question of whether; it is really a question of when. * * * Close of the First Day's Proceedings
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