International Friction and Cooperation in High-Technology Development and Trade Papers and Proceedings (1997) / Chapter Skim
Currently Skimming:
Technology Issues in the International Trading System
Technology Issues in the International Trading System
Pages 304-324
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 304... ...
For the sake of convenience, the term hightechnology could be applied to both. There are a number of reasons why technology issues have featured more prominently in the international agenda over the past decade and a half.
|
From page 305... ...
But there is more to the story than opening international markets for particular goods. High-technology industries became a domestic concern as well, both in the United States and Europe, in part as a response to what were believed to be successful Japanese industrial policies, especially industrial R&D consortia targeted at advancing new generic technologies.
|
From page 306... ...
bRevealed comparative advantage is calculated as a country's exports in an industry divided by its total exports, normalized by the same ratio for the OECD countries. CImports divided by total domestic demand j (production plus imports less exports)
|
From page 307... ...
This remarkable enlargement of the activities of the MNEs reflects the surge in foreign direct investment in the second half of the 1980s (see Table 4~. It was the investment surge of the 1980s that spawned the term globalization.
|
From page 308... ...
is a measure of two-way trade within the same industrial or product classification. An example of intra-industry trade is when Japan exports laptop computers to the United States while the United States exports mainframe computers to Japan.
|
From page 309... ...
Thus, the traditional international rivalry among MNEs is greatly intensified by the ongoing technological revolution, as corporations seek to capture economies of scale and scope, customize products to satisfy consumer tastes, generate sophisticated high-quality inter- and intra-corporate networks, and strive to gain access to knowledge, both technological and "tacit," which is accessible only by continuing on-site learning. For the globalizing MNE, preponderantly in high-technology sectors, market entry by means of trade and investment is essential: The two modes are complements rather than alternatives.
|
From page 310... ...
There is one exception, however, to this adaptive incrementalism, which is the need for new rules for international cooperation in science and technology, which is discussed in the concluding remarks. TECHNOLOGY ISSUES IN INTERNATIONAL POLICY As the review in the preceding discussion suggests, high-technology frictions in international trade and investment arise basically from two main sources: the international spillover from domestic policies designed to enhance the technological capabilities of home-based firms (including policies designed to increase technology inflows and decrease outflows)
|
From page 311... ...
As the policy matrix below illustrates, some existing trade policy rules in the World Trade Organization (WTO) could be adapted to improve their effective TABLE 5 Technology Policy Matrix International Policy Domain High-Technology Policies Trade Investment Competition Enhancing Domestic Technology Capabilities Subsidies Government procurement Product standards Antidumping Intellectual property Technology flows inflow incentives outflow disincentives strategic technology alliances Increasing Effective Access and Presence Structural impediments to trade Structural impediments to investment x x x x x x x x x x x x x x x x x ?
|
From page 312... ...
Finally, the proposals with respect to structural impediments are intended to launch a discussion rather than propose rules because there is little agreement today even about the legitimacy of the concept, let alone its precise dimensions. HIGH-TECHNOLOGY POLICYMAKING Trade Policy Subsidies The Uruguay Round Agreement provides specified exemptions from countervailing duties for basic and applied industrial research.
|
From page 313... ...
Because the national security exemption in the subsidies code is not precisely specified, the shift to dual-use R&D programs opens up the specter of a replay writ large! of the Airbus dispute as well as tit-for-tat "strategic industry" plays by countries.
|
From page 314... ...
So the new code, a major accomplishment of the Uruguay Round, provides a good launching pad for further negotiations. Product Standards The Uruguay Round Agreement on Technical Barriers to Trade shows a marked improvement over the previous Tokyo Round code by covering all signatories, including a strong push for transparency, mutual recognition, and international standards, enjoining countries to participate in international bodies.
|
From page 315... ...
Because convergence, or agreeing to new international rules, will be a lengthy process, a strong case could be made that, in the absence of a supranational authority, bilateral agreements might be contemplated to ensure a fair hearing of disputes over enforcement where there is a charge of spillover on the trade front. Intellectual Property Rights The Uruguay Round achieved a major breakthrough in establishing trade rules for the protection of intellectual property rights (IPRs)
|
From page 316... ...
A recent report from the Commission on International Investment and Transnational Corporations (UNCTAD) documents the increase in both the number and range of incentives for MNEs since the mid-1980s in both developing and OECD countries.
|
From page 317... ...
In addition, in the WTO it would be useful to launch discussions to expand the TRIMs to cover mandatory technology transfers, which was dropped from the Uruguay Round negotiations. On the technology outflow side, an increasingly contentious issue concerns participation by foreign subsidiaries in research consortia jointly funded by government and the private sector.
|
From page 318... ...
Although it will be difficult to elicit information on alliances (indeed, if the term "strategic" is accurate, many corporations may not be prepared to reveal much; the data currently available are based on published information) , the issue of how statistics bureaus of member OECD countries might tackle the data problem could be launched in the OECD, which has long experience in this field.
|
From page 319... ...
but much more so in the Uruguay Round, where services exemplified this trend in dealing with government regulation designed primarily to achieve specific domestic objectives. In the domains of investment and technology, most impediments are inside the border, arising from government or private actions or from embedded structural characteristics such as the nature of financial markets and corporate governance or the role of universities in the innovation system.
|
From page 320... ...
are per se offenses in any current competition policy regime, negotiating new international rules for removing private sector structural impediments would require reconciling conflicts between competition policy and trade policy objectives. The new WTO dispute settlement agreement provides an opportunity to begin a discussion of this issue and also to promote more consultation and discussion between competition policy and trade policy authorities in national capitals.
|
From page 321... ...
A case concerning exclusive dealerships, for example, could have served two purposes: to establish a foothold in the WTO for consideration of international rules for competition policy and, equally important, to launch a review of such vertical arrangements in national capitals since they exist in a number of OECD countries. It would be useful to launch such a review of domestic policies and their impact on import access in the OECD.
|
From page 322... ...
First, international cooperation may be a route for offsetting asymmetry of access. In this regard it is noteworthy that Japan has been the initiator of two international projects, one in basic science (the human frontiers science program)
|
From page 323... ...
Thus the case for more international cooperation is strong. What is needed are mutually agreed-on, transparent rules to establish a new architecture of international research consortia.
|
From page 324... ...
1995. Incentives and Foreign Direct Investments, April 6, Geneva.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.