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Panel Examines Global Trade

By Ramy Arnaout
and Eva Moy

Staff Reporters

The first plenary session of the Industry Summit, held last night in Kresge Auditorium, focused on "The Role of Government in a Global Industry." The session was attended by world leaders in industry and academia, as well as members of the MIT community.

The summit is not a one-time discussion, but an on-going dialogue about the relation of technology, economy, and management, MIT President Charles M. Vest said in his opening remarks. The dialogue in the next three days of the summit will be dominated by these forces as the Cold War era ends, he continued.

Vest expressed his hope that the forum be "a place to come together to discuss the latest developments of science and technology and economy" to prepare a new generation of engineers, scientists, and managers to lead tomorrow's world.

Heading the discussion were Vest and Klaus Schwab, president and founder of the World Economic Forum. The discussion panel also featured prominent figures in business and government: Gov. William Weld of Massachusetts; Percy Barnevik, president and chief executive officer of ABB Asea Brown Boveri, the Swiss multinational capital-goods company; John H. Gibbons, assistant to President Clinton for science and technology; Hisashi Owada, adviser to the minister of foreign affairs of Japan; and Robert W. Galvin, chairman of Motorola.

The major points that the panelists addressed last night reflected a shift from capitalism versus communism to capitalism versus capitalism, Owada said. The panelists discussed how to achieve free and fair international trade. But, as Vest summarized, the question is, "What's free, and what constitutes fair?"

Overall, the real job facing the nations of the world will be "to establish the rules of the game and establish them as soon as possible," Vest summarized. Trust and understanding between people are also vital, he said.

How to promote free, fair trade?

Weld said governments must find a balance between intervention and laissez-faire. "Governments should act as a referee as opposed to a spectator or player," he said.

Weld also stressed that the government must enforce the rules of the market to make free trade possible. "Free markets are not free unless the rules of the game are subscribed to by all,'' he said. He added that progress for every nation, and therefore for the world, will not be possible if governments take either too skeptical or too conciliatory an approach to trade.

However, Owada pointed out that international trade disputes may be hard to defuse because they originate in cultural and social differences. Also, given the disparate economies between first and third world countries, a global economy is even harder to achieve because individual national economies are not synchronized, he said.

Governments' roles

Galvin said that since the end of the Cold War, the role of government has shifted from defense to civilian production and global free trade. Galvin also stressed the role of investments in aiding economies, and urged governments to "understand that investments, honorably made, wherever they are made," will help people. "Investment overseas promote exports," he said.

"When we trust, when we invest well, we will increase the size of the [economic] pie," Galvin said.

Barnevik said the government should not intervene, but rather set a climate favorable for free market forces.

Gibbons emphasized that the government could help the economy with stronger interaction in the private sector - like better education for children, supporting basic research, and training and retraining for adults -- so that nations can operate more efficiently and more effectively.

Weld also argued the importance of setting tangible goals for advancement, explaining Japan's competitiveness by saying, "Japan has a better history of articulating a national agenda for technological advancement" than the United States. Gibbons also cited Japan as a role model for government support for small business to develop and purchase high tech equipment.