technology for making free trade thrive was initially container shipping and in-termodal transport, lowering the cost of physical transportation. Later, computing technology ushered in an era of call centers, offshore software development, and business service delivery from remote locations such as India. The technologies at the forefront— Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), and the Internet—facilitated the dispersion of productive locations to design, manufacture, and provide after-sales service of complex products such as aircraft.

The power of new technologies to continue to promote geographically dispersed production networks is here to stay. But interestingly, new technologies may just as well be put to use to facilitate proximate design and production. When speed-to-market and reacting to covnsumer feedback in real time are important, locating design and production facilities close to final markets makes sense. There are signs of this happening. For example, the sportswear maker Under Armour has designers and manufacturers located under one roof in Baltimore, MD, USA. Adidas has one Speedfactory using robots in Ansbach, Germany, and another similar factory in Atlanta, GA, USA; and Nike’s New Manufacturing partnership with Flextronics located in U.S. states California and Tennessee appears to be more and more about design and innovation, and less about low cost. And of course, these proximate locations create onshore jobs, which happens to be compatible with the climate of neo-nationalism and protectionism.

It is the nature of the technology in 3D printing, robots, flexible manufac-Britain’s decision to exit the European Union—so-called Brexit—creates uncertainty. While Britain may be doing its best to keep its free trade flag flying, doing so at the same time as exiting a free trade zone undermines credibility.

From the perspective of developing countries, exporting raw materials and manufactured goods are as important as ever for their prosperity. In a neo-liberal world, the 19th-century German economist Frederich List’s memorable phrase ‘kicking away the ladder’ resonated with many observers. In the past, rich industrialized nations got richer by using high tariffs before lowering them. How can we insist that poorer nations attempt to industrialize without such protective ladders to climb up? 1 In the 2010s, however, no nation is kicking away the ladder. Rather, import substitution and industrial policies—once seen to be the preserve of developing economies—are applied in different shapes and forms around the world. Moreover, developing nations continue to face significant barriers to trade in sectors other than manufacturing, notably exporting agricultural produce to developed nations. Thus, advocates of free trade have always tempered their demand by accommodating the need to secure national sovereignty and national interest.

The Digital Dimensions
of Protectionism

The preceding analysis may give the
impression the pendulum swinging
between free trade and protectionism
is all about geopolitics and conflict be-
tween nations. But that is only partially
correct. Technology—particularly digi-
tal technology—has played a great part
in enhancing international trade. The
digital dimension is highly relevant
to people who work in the computing
world. In some cases our attention to
this may be restricted to what might be
called “pure” digital services or prod-
ucts. But often it involves services or
products that depend on digital tech-
nology in their creation, delivery, or
use. In fact, the rapid incorporation
of the digital into many services and
products could be of greater signifi-
cance than anything “pure.”
As noted here, GATT and WTO fa-
cilitated the unprecedented growth in
international trade in the second half
of the 20th century. The key enabling

The power of new
technologies to
continue to promote
geographically
dispersed production
networks is
here to stay.

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visit tsas.acm.org

ACM Transactions
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