783 



-7- 



R&D. One is tfie ability (legal, political and psychological) of the U.S. 

 Government to work cooperatively with individual companies, or with a 

 consortium of companies, to support R&D designed to improve the international 

 competitive position of U.S. industry. Antitrust considerations, among 

 others, have deterred such joint activity in the past. 



Two initiatives in the past Administration have shown that the barriers 

 can be overcome, at least for rather fundamental work. The joint research 

 programs on automobile engines with a consortium of auto companies 

 (Cooperatiave Automobile Research Program), and the cooperative program for 

 ocean margin drilling with a group of oil companies have received the advance 

 blessing of the Justice Department. These are now, however, in jeopardy or 

 cancelled, apparently from the conviction that industry should make these 

 investments on its own. Tne international economic payoffs of closer 

 government/ industry R&D cooperation (and the costs of not easing the way) will 

 likely prove to be important enough over the next several years to justify 

 reconsideration of this policy. Whether the Government is involved or not, 

 the advantage for international competitiveness of allowing R&D cooperation 

 among companies in the same industry is likely to lead to interest in 

 modifying antitrust policy legislation. Clearly, such proposals would induce 

 major political controversy. 



A related aspect of industrial policy is the tendency of the U.S. to 

 attempt to apply to U.S. companies operating abroad the same rules and 

 constraints that apply inside the country. 1 The essentially adversarial 



Lester Thurow, Zero-Sum Society, Basic Books, New York, 1980. 



