Balance of Trade in Advanced Technologies
I’ve been reading Emmanuel Todd’s “After The Empire”, in which he references the Census bureau statistics on balance of trade in advanced technologies.
The numbers speak for themselves, the U.S. is importing more advanced technologies than it is exporting, consistently, since 2001. This is less an indictment of the Bush administration specifically and more a global trend of post Y2K outsourcing of technology services.
I’ve been reading Emmanuel Todd’s “After The Empire”, in which he references the Census bureau statistics on balance of trade in advanced technologies.
The numbers speak for themselves, the U.S. is importing more advanced technologies than it is exporting, consistently, since 2001. This is less an indictment of the Bush administration specifically and more a global trend of post Y2K outsourcing of technology services.
There is yet to be a coherent argument that this is a positive trend, not a negative one – at best we get broad arguments that outsourcing is a symptom of free-trade policies applying to services. Indeed such an argument would hold if there was another emerging group of industries other than “Advanced technologies” that the U.S. will become dominant in, something that can replace tech as the leading export industry. While I’m hardly the one qualified to identify that industry, it would need to be pervasive and uniquely U.S. specific to address balance of trade.
One argument could be that cultural production of the U.S. will expand further to fill that gap. Indeed U.S. culture (Film, Music, Television, Internet based content) is already a well established export industry. Unfortunately the Census Bureau does not seem to break out cultural exports. Just looking at the SITC code 898 for Musical Instruments, Records & Tapes seems unlikely to accurately reflect the music industry – where Japan and Taiwan massively outperform the U.S. ($1.5bn imports from Japan vs. $395m exports December YTD 2003).
However there are major impediments to this industry fulfilling such a hefty role – the postmodernist frame of reference survives in cultural production and consumption philosophy – challenging a single hegemonic monocultural producer. This is doubly unlikely given current U.S. foreign policy behaviour.
Marshall McCluen’s global village is stretching first world consumptive tastes beyond a unified first world Western diet. This is, in Edward deBono’s term, “demassification” – the cultural market has fractured into self-supporting niches increasingly unrestrained by national borders (a combination of globalization and networking).
The concern is that if outsourcing continues and the U.S. becomes truly entrenched in importing advanced technologies, while no real replacement industry arises to counteract this balance of trade deficit, devaluation of the dollar is likely. As I have argued previously, this could have a trigger effect on OPEC to replace the USD with the Euro as oil transaction currency. While OPEC’s main mandate is to ensure stability of oil supply and demand, the losses incurred by member states due to the appreciation of the Euro has already lead them to consider such a move this year.
With an additional 10 countries to join the EU this year, strengthening the Euro further, there is only one ploy considered by the Bush administration (as ex-oil men and funded by the petroleum lobby). Flood the market with cheap Iraqi oil, thereby forcing the OPEC fixed price downwards. That approach requires a compliant and productive Iraq, which – despite the efforts of the stenographers, aka the corporate press, to paper over the possibility of civil war – does not appear to be possible in the near term.
A logical alternative would, of course, be to aggressively raise motor vehicle fuel efficiency standards, forcing engine manufacturers to raise the bar to meet as a minimum 40 miles per gallon – the already proven results of hybrid electric-gas vehicles. That figure would be sufficient to make the U.S. energy independent. It would also be the break-out export industry the U.S. is looking for and would easily allow the U.S. to take the lead in rejoining the Kyoto Protocol for reduction of greenhouse gas emissions. The diplomatic detente the rejoining would create in world affairs would in part address the anti-Americanism that has been created with the invasion of Iraq.