Challenging New Protectionism Before It Dismembers Global Trade

John Neuffer photo

Today in The Wall Street Journal, ITI president and CEO Dean Garfield and Tom Donohue, the president and CEO of the U.S. Chamber of Commerce, shine bright a light on a new trend of protectionism that threatens job growth and economic opportunity here in the U.S. and around the world.  The op-ed’s title captures the problem plainly:  “Protectionism Is Back.  The 21st-century euphemism is ‘indigenous innovation,’ and it’s as damaging as ever.”

"Despite the stunning power of innovation, there are forces trying to stifle it and replace it with economic schemes that threaten global trade and recovery. A new kind of protectionism is turning innovation policy on its head, unfairly benefiting domestic firms at the expense of foreign players. Left unchecked, the result could be calamitous. Instead of thriving in a globally integrated economy, we will limp toward Balkanized, closed systems."

Several countries – most notably China, with Brazil, India, Russia, Indonesia, and others following close behind – are implementing policies, often under the "indigenous innovation" brand, designed to boost their own domestic manufacturing, high-tech, and R&D capabilities by discriminating against foreign companies.  These policies share a number of troubling elements, which veer markedly from global norms and may violate global trade agreements, including mandatory technology transfer requirements, local sourcing obligations, sharing of proprietary source code and other sensitive design elements, and restrictions on the free flow of data.

If unchecked, ITI fears these policies will lead to a crippling loss of competitiveness and global market share for technology companies and goods and service providers in sectors across the board.  Importantly, this kind of creeping protectionism will undermine economic growth and job creation here in the United States at a time when we can least afford it.

Failure to prevail in this struggle for the soul of the global economy would reverse decades of global growth and innovation and the millions of quality American jobs tied to the technology industry.  It could fracture the global trade system that relies on open-markets and deep supply chains.  That’s why we are urging the U.S. leadership, along with other economic powers around the world, to step up and push back this wrong-headed protectionism.

Take a look at today’s WSJ op-ed, and check back here often for updates on the effort to reverse these practices and keep markets open. 

-- John Neuffer is ITI's vice president for global policy.

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