In the aftermath of the Great Recession an increasing number of countries, including China, India and Brazil, have come to embrace a new kind of protectionist trade policy that seeks to pressure foreign enterprises to "localize" economic activity in order to create domestic jobs. Not content to trust the global trade and investment system, these nations are putting in place an array of unfair trade practices to promote local production in lieu of imports. These practices, called localization barriers to trade, include measures such as local content requirements, forced offsets, and forced intellectual property or technology transfer as a condition of market access. These policies inflict significant damage on the countries affected by them, the broader global economy, and even, ironically, the very nations that implement them. This report offers an innovative typology of trade and development strategies, documents the extent of localization barriers to trade U.S. enterprises face in global markets, and offers policy responses that can assist in creating a new global trade regime that favors rules- and market-based trade while supporting the modern knowledge- and innovation-based global economy.
Localization Barriers to Trade: Threat to the Global Innovation Economy
The Pros and Cons of How LBTs like Offsets Impact the Global Innovation Economy
Stephen Ezell discussed the impact of localization barriers to trade (LBT) on the global innovation economy at the fall 2013 joint conference of the Defense Industry Offset Association and the Global Offset and Countertrade Association.
Privacy Advocates Set Their Sights On The Wrong G-Men
Since the exposure of the government’s PRISM program, privacy activists have been conflating the intelligence community’s questionable, closed-door electronic surveillance program with the voluntary, open, and legitimate collection of personal data by the private sector. Not only does this misdirection harm the efforts of policymakers to achieve real reform in government, it has the potential to disrupt the enormous economic and social benefits of the data-driven economy.
Getting the TPP Done Right More Important than Getting It Done Right Away
With the 19th round of negotiations toward completing the Trans-Pacific Partnership (TPP) free trade agreement underway in Brunei, time is rapidly running out to finalize a deal before the member countries’ self-imposed deadline of the end of this year. But with the recent entry of the world’s third largest market, Japan, into the TPP and key sticking points like intellectual property (IP) protections and enforcement provisions remaining to be negotiated, one is forced to ask: What’s the rush?
Innovation Economics: The Race for Global Advantage
On August 20, Stephen Ezell gave the keynote address at the 2nd Annual Triangle Biotech Research Symposium held in Research Triangle Park, North Carolina. Organized by the BioPharma Research Council in coordination with the North Carolina Biotechnology Center, the event served to connect leading biomedical researchers at North Carolina universities with representatives from small biotech start-ups and larger biopharmaceutical organizations, with the goal of facilitating the transfer of knowledge and technology within the biotech community. Ezell’s keynote presentation to the audience of 120 focused on policy implications to revitalize American competitiveness, drawing insights from ITIF’s work in Innovation Economics: The Race for Global Advantage and from ITIF’s 2012 report Leadership in Decline: Assessing U.S. Competitiveness in Biomedical Research.
Forced Localization Policies Threaten Global Trade in Innovative Industries
Localization barriers to trade constitute a distinct and rapidly growing class of trade barriers that seek to impose location-specific conditions on global production, procurement, investment, and data flows. These so-called "forced localization" policies are designed to protect, favor, or stimulate domestic manufacturing industries, service providers, and/or intellectual property (IP) providers at the expense of foreign competitors, particularly those operating in innovative industries.