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Let's stop kidding ourselves.

The Cold War may be winding down, but the economic war continues to rage on. Witness the collapse of talks late last year designed to update the General Agreement on Tariffs and Trade. For four years negotiators have been seeking to extend GATT's coverage to agriculture, textiles, intellectual property, investment, and services; and to strengthen enforcement provisions, all to no avail. In many ways, the walls separating nations may be crumbling, but when it comes to trade, the name of the game still seems to be "take

At the heart of the collapse is the European Community's insistence on appeasing its agricultural constituency. It won't give up its farm subsidies, which act as a nontariff trade barrier against US agricultural exports. Europe and Japan also are protective of their financial and service industries and thus are reluctant to open them up to international competition.

Unfortunately-or perhaps fortunately-in the US free-enterprise system there is much less inclination for the government to get involved in protecting its own. Because of the United States' open market philosophy, US business and industrial firms are left to fend for themselves; to stand alone against the business-government socialistic alliance of foreign competitors in the war over markets, both domestic and international.

That's why it is critical for US manufacturers to wean themselves away from the warmth and security of serving only the domestic market they were born into. The US market is no longer domestic. It has been globalized.

It appears US manufacturers are finally starting to realize the position they are in and just what is at stake. In 1987, Coopers & Lybrand, an accounting and management consulting firm, surveyed American manufacturers only to find that many of them were relatively naive even oblivious-to the threat of foreign competition. Its most recent survey results are more encouraging. It found a greater awareness of the global competitive challenge; that many manufacturers had established foreign operations.

Even so, while US manufacturing executives agree that it is appropriate for their companies to globalize, less than half have a strategy to do it; only a third of the respondents are moving aggressively enough to capture leadership positions as global competitors. Too few have responded with any "significant vigor" and, more alarmingly, a significant number do not even invision that their operations will ever have to become global, the study showed.

Globalization is a trendy term that executives want to be associated with. They claim to have global operations until confronted with questions such as: Are products manufactured in several countries and shipped worldwide, supporting global demand requirements? Is capacity managed on a worldwide basis providing global logistical response to changing markets? Are materials, processes, and tolerances standardized worldwide, allowing for trans-shippability of a global product line?

That's what international competitiveness and being a player in the globalization game is really all about. Until US manufacturing executives start strategizing toward that end, they'll not be globally competitive.
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Title Annotation:General Agreement on Tariffs and Trade
Author:Modic, Stanley J.
Publication:Tooling & Production
Article Type:editorial
Date:Feb 1, 1991
Previous Article:Machine-tool accessories.
Next Article:Companies build global competitiveness.

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