Introduction

This chapter discusses to establish the impacts of Japanese and European nontariff barriers (NTBs) on the international marketing, investment, and technology strategies of small- to medium-sized high-technology US firms. A huge US trade deficit and the perception that this deficit results in part from discrimination in major markets against US products that would normally be competitive are part of the explanation for the growing controversy over NTBs. Market-based perspectives on protectionism view NTBs as a natural and predictable reaction to cyclical periods of low economic growth, superimposed on longer-term structural changes in international competitiveness, the “trading-up” of newly industrializing countries, long-term price advantages stemming from disparate costs for factors of production, and the increasing ease of international technology transfer. The Japanese government’s strategy of blocking Texas Instruments’ entry into Japan’s markets provides a good example of this use of targeted NTBs.