International Friction and Cooperation in High-Technology Development and Trade Papers and Proceedings (1997) / Chapter Skim
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Regional Cooperation in Core Technologies: The Case of Airbus
Regional Cooperation in Core Technologies: The Case of Airbus
Pages 46-61
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From page 46... ...
Briefly, Dr. Paque is head of the Department of Growth and Structural Policy in the International Division of Labor at the Kiel Institute of World Economics in Germany.
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From page 47... ...
The respective aerospace industries of France, the United Kingdom, Germany, and Holland certainly entered the 1960s with substantial technological assets and substantial involvement in the large commercial aircraft industry. What triggered the formation of the Airbus Consortium was the recognition of the end of the road for the national champion policy, wherein individual gov
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From page 48... ...
support of its domestic aerospace industry was motivated largely by national security considerations; such support was much less consciously structured to advance national competitiveness, and it was not directed at specific individual commercial aircraft development projects. By and large, the focus of U.S.
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From page 49... ...
is that although there has been a great deal of pulling and hauling within the Consortium over the distribution of benefits and jobs, the distributive politics operating within the Airbus Consortium have been far less pronounced than what we see within other consortia sponsored by the European Union, such as ESPRIT and other programs. It is far from obvious to me that the EU Commission itself could have sponsored and launched the type of focused program that is represented by Airbus, with very large expenditures devoted to a small number of national champions brought together in a regional consortium.
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From page 50... ...
These provisions raise messy issues of how to define or measure direct and indirect support. These problems are not unique to this agreement, but are likely to occur in any sectoral agreements elsewhere.
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From page 51... ...
on Aircraft Trade, advisers to the Tokyo Round of Multilateral Trade Negotiations, met the day after a briefing by the government concerning the results of the apparent direction of the Tokyo Round. They believed that the Tokyo Round Subsidies Code was not going to address subsidy issues adequately, because subsidies to Airbus were going to be adversely affecting U.S.
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From page 52... ...
There was some additional language that referenced the Standards Code; Article Four discussed how governments should conduct themselves in marketing campaigns; Article Two provided for tariff-free treatment of products covered by the agreement, etc. In the early 1980s, the Europeans provided additional supports for a new program designated as the A320.
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From page 53... ...
We send them a lot of aerospace "stuff" and they send us a lot of "stuff." While the industry did not want to spoil its market in Europe, at the same time it did not want to face subsidized competition. This issue resulted in a marathon negotiation, and in 1988 we entered strenuously into formal negotiations to develop what became an interpretation of two articles of the GATT Aircraft Agreement: Article Six, which is the subsidies language; and Article Four, which is the so-called inducements language.
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From page 54... ...
First, it is a partnership of the major aerospace and defense contractors of Europe: Aerospatiale, DASA, Daimler-Benz, and British Aerospace, with Dutch, Spanish and Belgian companies, and now an Italian company participating as well. These are not small companies.
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From page 55... ...
For example, for the subsonic super jumbo aircraft, we have a study group that comprises Boeing and the Airbus partners. In the small aircraft sector, we have active studies under way with our Japanese colleagues at the Japan Aircraft Development Corporation and with China and Korea.
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From page 56... ...
And you can be sure that this will not happen within the next year. When Sally Bath mentioned trading "stuff" with the European market, it reminded me of the engine business at United Technologies in the 1970s when
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From page 57... ...
But spillovers also were created by the military procurement programs of the member nations involved in Airbus, and certainly there was a history of launch aid in all of the member states with respect to airframes and engines before the formation of Airbus. In other words, there is a pre-Airbus history of subsidization in Europe, and there is a pre-Airbus history of indirect spillovers in the United States.
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From page 58... ...
If the Europeans argued that government procurement in the defense industry was a major source of innovation, then I suppose the rationale for intervention rested on the first-mover advantage that would create a potential monopoly supplier. The reason I am raising this issue is because I think that in high technology, I have never considered Airbus a model of friction for the reasons that have been discussed here today.
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From page 59... ...
RAYMOND WALDMANN: Just one factual matter. We should not assume that there was a first-mover advantage or any momentum in the United States in the civil aircraft jet business.
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From page 60... ...
. RAYMOND WALDMANN: The triple seven program has approximately 20 percent Japanese content and an additional 4 or 5 percent foreign content beyond the Japanese content.
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From page 61... ...
The amount of capital required for this industry, the long time lines, and the government involvement in most areas makes this a strategic industry. And that makes it a unique industry.
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