How do the direct and indirect trade barriers of some nations unfairly harm the ability of foreign (particularly American) IT companies to monetize digital innovations and distribute intellectual assets globally? That’s the focus of a new paper from Rob Atkinson and Julie Hedlund at ITIF, entitled The Rise of the New Mercantilists: Unfair Trade Practices in the Innovation Economy.
Today’s innovations have much shorter life-cycles, so companies need broader, faster market distribution in order to earn returns on innovation–money they invest in tomorrow’s innovations. These companies seek sales and licensing markets all across our “flat world.” The ITIF report discusses how it’s not your father’s form of protectionism anymore (such as tariffs and direct subsidies). Companies also face protectionist trade barriers in the forms of lax enforcement of intellectual property piracy and counterfeiting, disparate competition regulations, government preferences and standards manipulation.
Now here’s the crux of the question: is this a new form of protectionism – what my colleague Steve DelBianco and I call “Protectionism 2.0”? Or are these more subtle forms of trade barriers the result of legitimate public policy goals? Probably a bit of both, but one has to ask – if Microsoft were a German company would it be facing the full wrath of competition regulators? Or if Apple were Dutch, or Norwegian, or French – would it be scrutinized by regulators in those countries eager to break the link between iTunes and iPod?
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.