The trade agreement was a media disaster. It suggests that the only way American companies can compete is heavy state protection. In fact, that is not true. For complex chips, which are the highest high-tech technology, U.S. products are the world leaders. Even in Japan, U.S. companies such as Texas Instruments Inc. and Intel Corp. are market leaders. But Silicon Valley`s willingness to rely on Uncle Sam naturally gives the impression that it cannot stand alone. Under the threst of criticism from U.S.
consumers who paid the bill, the U.S. semiconductor industry is now agreeing to lift trade restrictions on rowing chips when the 1986 agreement expires in September. But industry lobbyists say they want to maintain government restrictions on other chips and maintain a mechanism to protect against semiconductors when U.S. industry asks for help. In other words, they want the consumer to be restocked with electricity. After a marathon 33-hour session, U.S. and Japanese negotiators agreed Friday morning on a new trade pact on semiconductors, which replaced a decades-long agreement created to improve foreign access to the Japanese chip market with a much smaller series of private and state agreements. The European Community (EC) argued that the semiconductor agreement amounted to price fixing by governments and was therefore illegal under the General Agreement on Tariffs and Trade (GATT). In 1987, the European Community filed a lawsuit against the United States and Japan under the GATT.
In 1988, a GATT committee ruled in favour of the EC and found that the pricing of semiconductors for third countries was contrary to international trade rules and therefore should be stopped. (The Momentum of Managed Trade“ The Economist, January 13, 1990, p. 19.) 3) Set the price at which Japanese companies sell semiconductors in collaboration with the U.S. government; The Japanese market was very competitive, with most companies competing directly with each other for finished products. On the other hand, few U.S. semiconductor manufacturers also produce finished products. This indicates that the Japanese government has not played a key role in supporting the development of the industry. Michael Porter, of Harvard Business School, notes in a competitiveness study that „one of the strongest empirical results of our research is the link between national rivalry and the creation and perseverance of competitive advantages in an industry. (Michael Becker, „Semiconductor Protectionism: Goodbye Mr Chips,“ Citizens for a Sound Economy, Issue Alert No. 9, August 27, 1986, p. 1.) „Our semiconductor industry is much stronger than it was five or ten years ago,“ said a senior U.S. trade negotiator.
„If you have a 30% foreign market share, you obviously don`t need a similar deal.“ The Semiconductor Council (the Japanese prefer to call it the World Semiconductor Council) will be open to other chip-producing countries that have agreed to remove tariffs on semiconductor imports. For now, this excludes chip manufacturers in Europe, Korea and Taiwan. A separate global government forum will address semiconductor issues at the government level. Many U.S. semiconductor manufacturers have backed a plan that goes far beyond Sematech. The plan would create a multi-billion dollar U.S. government-funded investment company to finance companies entering the semiconductor industry, as well as established companies. In this context, consumer Electronics Capital Corporation would provide cheap capital to companies wishing to produce consumer electronics. However, the federal government has no privileged knowledge of the winners and losers in the marketplace. And choosing the winners and losers is exactly what the federal government does when it funds a consortium like Sematech or an expanded plan.
„Capital Plan for U.S. Electronics,“ Financial Times, November 9, 1989, p.