New thinking in International Trade: National Strategies to Build Comparative Advantage

Event Title: New thinking in International Trade: National Strategies to Build Comparative Advantage
Sponsor: Woodrow Wilson International Center for Scholars
Location: Woodrow Wilson Center Dinning Room
Date: Thursday, November 17, 2006 Time: 10:00 p.m. – 1:30 p.m.
Approximate Number of Attendees: 95
Intern Attending: Ahreum Jung

Speaker: John Cranford, CQ Weekly; Carl Dahlman, Georgetown University;
T.N. Srinivasan, Yale University; Bryan Ritchie, James Madison College; Bruce Stokes, National Journal; Vinod Aggarwal, University of California, Berkeley; Susan Butts, Dow Chemical Company; Rob Atkinson, Information Technology and Innovation Foundation; Ralph Gomory, President, Alfred P. Sloan Foundation

The panel that I attended addressed Strategies in Emerging Market Countries and Policy and Private Sector Implications. The general themes of this conference were two-fold: (1) how the national policies of foreign competitors are designed to change their respective comparative advantages and thus the pattern of world trade, (2) how one is to evaluate the appropriate U.S. public and private sector policies for dealing with the evolving competitive strengths of other countries.

The world of public policy is beginning to rethink the impact of global trade in the 21st century. There are several forces at work. Established competitors are actively attempting to adopt and adapt the U.S. approach to innovation. The rise of China, India, and the former Soviet Union has created a new set of competitors that increasingly combine advanced manufacturing or services with very low wages. The spread of the digital economy and the increased availability of broad band capacity have brought international competition to a growing array of services.

Panelists and participants focused on the impact of overseas innovation on U.S. comparative advantage and the potential gains from trade. The panelists also looked closely at the policy implications of the new thinking for trade negotiations with advanced and developing countries.

Finally, the conference attempted to make some recommendations. These included the following: (1) Creating incentives for organizations to invest in innovations and innovation-based production in the United States; (2) Fighting foreign mercantilism, particularly in technology-based, high value-added sectors. In the twenty-first-century global economy, nations can no longer be indifferent to the industrial and value added mix of their economy.