The following article originally appeared on TradeReform.org.
The old, tired free traders have seen every prediction made false. Former Treasury Secretary Lloyd Bentsen predicted that passage of the Uruguay Round of GATT talks (creating the WTO) would result in an added $1700 income per family in the U.S.
Another prediction is that the so-called low-end manufacturing should be sent overseas so we could do high-end work here. That too was false. Low-tech, high-tech and green tech goes overseas without discrimination under the current globalization model.
R&D goes too... because you want to have the R&D done where the plant is to be more efficient about getting the new technology into production. So says Tektronix President Amir Aghdaei.
| In my experience, the home base, where IP is created, should house a minimum 25% of a company's entire R&D team. When it comes to maintenance and sustainability, I believe that 75% of this team could be transferred closer to the manufacturing base with direct access to customers. |
Ralph Gomory's corollary is that if you are going to cede a market to another country, you better gain in a market with sufficient volume and sales to fully replace it. R&D is simply too low in quantity to be a replacement industry to maintain economic health.
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