discussion underscored the challenge the growth of offsets poses to the international trading system.

For the United States to meet these challenges, participants at the 1997 workshop suggested that a key first step would be to develop a better understanding of America's long-term economic interest. While the current financial crisis in Asia has led many U.S. journalists to believe that the Japanese model of economic development has been discredited, Ambassador Wolff doubted these views were shared by government agencies such as the Ministry for International Trade and Investment (MITI). Indeed the papers to be presented today suggest that the industrial policy plans of many countries are still an important factor in the aerospace industry.

To better understand these challenges and trends, there was a sense from the participants in the 1997 meeting that a more focused and detailed discussion would be of value. Today's symposium seeks to meet that need by attempting to further clarify the issues and long-term U.S. interests. To that end, the STEP Board commissioned a series of papers that are the basis of today's discussion. In reviewing the papers, Ambassador Wolff suggested that the participants might keep in mind the following questions:

  • Do we have a clear idea of what is happening in aerospace offsets?
  • How extensive are they, both in terms of dollar value and technological value?
  • What is their impact, positive and negative, on both the industry and the country as a whole?
  • Is there any part of the government that has a good understanding of the nature, content, and potential consequence of current offsets agreements?
  • Does the government in fact have a need to know, or are offsets primarily a private matter even though public authorities are often involved as buyers?
  • Do the demands for offsets that represent the objectives of a foreign government's industrial policy require a policy response by the United States? If so, what should be the main elements of that policy response?
  • Are those foreign government industrial policies successful in their objective of transferring technology to better enable their companies to compete with U.S. firms?
  • Are these policies succeeding cumulatively as the result of separate deals with competing vendors?
  • Are these technologies being transferred crucial to long-term U.S. Interests?

In summary, participants were asked to consider what is the environment in which U.S. companies are forced to compete, and what policy would be appropriate for the United States to pursue, both internationally and domestically.

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