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 protection of intellectual property, disparate competition
regulations, government preferences and standards manipulation.
Now here’s the crux of the question: is this a new
form of protectionism – “Protectionism 2.0”? Or are these rules and regulations 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?