International Trade Conflict in High Technology Sectors: The Japanese Satellite Example

Abstract

INTERNATIONAL TRADE CONFLICT IN HIGH TECHNOLOGY SECTORS: THE JAPANESE SATELLITE EXAMPLE Glenn H. Reynoldst I. INTRODUCTION Commerce in high technology items has been a source of international trade friction for some time.' Arguments address- ing the friction have frequently focused on the feasibility of an activist or strategic policy in this field 2 and the constructive re- sponses of other trading nations to the development of such poli- cies. 3 Of late, two particular industry sectors have received t Associate Professor of Law, University of Tennessee. J.D., Yale Law School, 1985; B.A., University of Tennessee, 1982. Professor Reynolds chairs the policy committee of the National Space Society, and the International Space Law committee of the American Bar Association, and is the author (with Robert P. Merges) of OUTER SPACE: PROBLEMS OF LAW AND POLICY (Westview Press, 2d ed. 1994). This article is based on prepared testimony presented to the United States Senate Finance Committee, Subcommittee on International Trade, in June 1993 and on comments submitted to the United States Trade Representative's office in July 1989. 1 would like to thank my research assistant, Brannon Denning, for his usual excellent work. 1. See, e.g., THOMAS HOWELL ET AL., THE MICROELECTRONICS RACE: THE IMPACT OF GOVERNMENT POLICY ON INTERNATIONAL COMPETITION (1988); RICH- ARD NELSON, HIGH TECHNOLOGY POLICIES: A FIVE NATION COMPARISON (1984); LAURA D'ANDREA TYSON, WHO's BASHING WHOM? TRADE CONFLICT IN HIGH TECHNOLOGY INDUSTRIES (1993); Glenn H. Reynolds, United States Telecommuni- cations Trade Policy: Critique and Suggestions, 58 TENN. L. REV. 573 (1991). 2. Traditional analysis of international trade matters has generally turned on questions of comparative advantage. See ROBERT GILPIN, THE POLITICAL ECON- OMY OF INTERNATIONAL RELATIONS 22 (1987). The assumption was that some na- tions, because of relatively immutable factors, such as climate and natural resources, would have an advantage in producing particular commodities over others. Since the causes of such an advantage were fixed, governmental policies might do harm, but could not do much good. Id. at 173-75. More recently, however, an increasing number of nations have proven capable of creating their own comparative advan- tage through technological, economic, and regulatory approaches designed to foster international competitiveness. Theories that purport to explain the success of these approaches generally refer to them as strategic trade policies, and thus are known as strategic trade theories. See generally Reynolds, supra note 1, at 594-98 (dis- cussing strategic trade theories). 3. For a summary of this debate, see Reynolds, supra note 1, at 586-98.