Defense-related industries and trade relations

by C. Richard Neu

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Originally presented at the July 9, 1990, meeting of the U.S.-European Community High Technology Working Group, this paper examines the relationship between national defense efforts and trade policy. It discusses five key consequences of lessened international tensions and reduced defense spending--erosion of distinctions between military and civilian production, increased emphasis on the capacity to rebuild military forces, changes in the defense industrial base's corporate structure, more internal cooperative efforts to develop arms, and change in the locus of defense-related demand--that will make resolving trade policy questions more difficult. Focusing on likely developments in the United States, the author concludes that though the recent, dramatic changes in the global political situation are clearly welcome, they will bring change to trade patterns, important industries, and perceptions of national security interests, making life more difficult for trade negotiators.

This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

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