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| Cases A | Case B | Case C | Teacher's Notes/Bibliography |
This
case study is intended to fill in a crucial gap in exploring the
linkages between trade policies and the goals of technology/industrial
policies with which they are often in conflict. Ultimately it is hoped
that the study as a whole stimulates a lively debate over the question
of how public policy professionals can ensure greater complimentarity
between the needs of specific constituents involved in global
competition, and the overall national economic aims which derive from
productivity, consumer welfare, and national security arguments. It is
equally of use to students of international management who may find it
necessary to have a firm grasp of how their investment decisions and
competitive well being are worked upon at the government policy level.
More specifically, the use of this study may be recommended as follows: Case A
Technology and Investment Strategies in the FPD Industry
With
the exception of the members of the ADMA, most industry observers,
including those who favor industrial policies, have blamed the failure
of U.S. manufacturers to establish a significant market share in FPD’s
on factors other than Japanese trading practices. This assessment has to
be qualified by noting the ways in which Japanese trade and investment
practices may have discouraged potential investors. Case A aims to place
later developments in the context of the differing attitudes towards
knowledge, innovation, and economic policy formation in Japan and the
United States. These attitudes determined in large part the manners in
which private firms outlined technological “road maps” for the
development of new technologies, and formed the foundations upon which
investment decisions could be made. It
is recommended that this part of the study be accompanied by lectures to
acquaint students with the basic principles of international trade
theory, political economy, and management, though it is assumed that
they will already be familiar with these concepts. At the very least
they should be familiar with and be able to apply theories of
comparative and absolute advantage to a discussion of the relative
merits of mercantalist and liberal economic theory, and be able to
hypothesize how political economy structures can impact on the ability
of firms and nations to develop innovations in technology. More advanced
students could benefit from raising the discussion to an argument of the
pros and cons of industrial policies, the differences between these and
technology or science policies, and the impact of these on what are
referred to as national innovation systems by neo-Schumpeterian
economists. Case B Competition and Conflict in the Flat Panel Display Industry This
section focuses on the application of Antidumping measures as a trade
remedy to counteract and provide protection against predatory pricing
strategies. Such measures have been roundly criticized for a variety of
reasons, most of which are highlighted in the body of the case study.
Critics in the past have focused upon the failure of these measures to
address dumping in third country markets and the concerns of downstream
producers. Also, in the context of several antidumping cases there have
been criticisms leveled at the complexity of the proceedings and at
alleged questionable methods of calculating dumping margins and harm to
the effected industries. More
recently of course, antidumping and countervailing duties measures have
become an issue of contention within the multilateral system. Here the
concern has been that their application is overtly unilateral and
protectionist, and is a remedy available only to the largest and most
developed nations in the system. Currently AD/CVD measures are an
additional issue of contention as government and industry leaders debate
the inclusion of competition policy codes at the multilateral level. This
case is interesting because it includes all of these elements. It is an
excellent tool for introducing the problems associated with these
measures to students who have been exposed to them in an introductory
trade policy course but have not yet developed the analytical tools and
case background with which to assess their continued usefullness.
1.
Books Although
no comprehensive book on the Flat Panel Display industry has been
published to date, we are using a variety of sources which analyze U.S.
- Japan trade conflict in high technology industries, R&D and
investment strategies in both countries within these sectors, and
security and economic factors which impact on the topic. These books
include: Tyson, Laura D.
1993. Who’s Bashing Whom?: Trade
Conflict in High-Technology Sandholtz, Borrus,
Zysman, Conca, Stowsky, Vogel, Weber, eds. 1992. The
Highest Arrison, Bergsten,
Graham, Caldwell Harris, eds. 1992. Japan’s
Growing Patrick, Hugh. 1986.
Japan’s High Technology
Industries: Lessons and Limitations Johnson, Chalmers.
1982. MITI and the Japanese
Miracle: The Growth of Industrial
2.
Source
Documents We
are using several documents from U.S. government sources that cover
details of the Flat Panel Display Initiative and the anti-dumping
petition brought by the ADMA. We have not found any relevant Japanese
sources in this area. DARPA Electronics
Technology Office. 1994. National
Flat Panel Display Initiative. DARPA Electronics
Technology Office. 1997. Review of
Flat Panel Display Programs Department of
Commerce; International Trade Administration; Import Japanese Technology
Evaluation Center. 1992. Display
Technologies in Japan Baltimore, 3. Additional
References by Category A.
General/Comprehensive Borrus, Michael, and
Hart, Jeffrey A., 1994. “Display’s the Thing: The Real Stakes in the Harvard Business
School. 1994. The Flat Panel
Display Initiative. Boston: Harvard “U.S.
Display Industry on the Edge”. IEEE
Perspectives, May 1995, 62. “Flat Panel
Flop”. New Republic, August
1993, 16. “The Pentagon’s
‘Flat Panel Display’ Boondoggle”. American
Enterprise, January Shelton,
R. D. “Japanese Industrial Policy: Lessons for the US”.
International Technology Research Institution, <http://justice.loyola.edu/~rds/asee1a.html Hart,
Jeffrey A. “The Anti-dumping petition of the Advanced Display
Manufacturers of America: Origins and Consequences”. The
World Economy. 16. January 1993. P85-109 B.
Technical/Manufacturing/Market
Trends O’Mara &
Associates. 1996. Manufacturing
Flat Panel Displays. Palo Alto, CA: O,Mara &
Associates. 1996. Flat Panel
Displays in Asia: Why the U.S. Can’t Get There
From Here. Palo Alto, CA: W.C.
O’Mara & Associates, <httt://atip.org/fpd/src/presen/omara/sld001.htm> National Technology
Alliance. 1997. Informations
Display Technology and Market “Win the
Technology Battle and Lose the Manufacturing War.” Laser
Focus World, Center for Display
Technology and Manufacturing. 1997. What
IS a Flat Panel “The Challenge for
LCD Monitors Starts.” Nikkei
Kogyo Shimbun, Oct. 10, 1995. “Competitive
Dimensions of Flat Panel Displays.” Los
Angeles Times, Oct. 26, 1995. 4. Defense/Security
Issues and U.S. FPD Initiative Moran, Theodore H.
1990. “The Globalization of America’s Defense Industries.” Flamm, Kenneth.
1996. “Asia’s Role in U.S. Display Initiatives.”Paper presented at
“Flat Panel
Display Makers Win Big in Defense Awards.” The
Wall Street Journal, Kaminski, Paul G.,
Under Secretary of Defense for Acquisition and Technology. “Enabling
Intelligence Technologies for the 21st Century.” Statement
Before the House Permanent Select Committee on Intelligence. Oct.18,
1995. Kaminski, Paul G.,
Under Secretary of Defense for Acquisition and Technology. “Dual
Use Technology.” Statement
Before the Subcommittee on Defense Technology, Acquisition and
Industrial Base of the Senate Committee on Armed Services. May 17,
1995. |