"Perhaps because of the perception that foreigners were taking advantage of U.S. weakness, the surge in foreign direct investment in the 1980s provoked a political backlash. The height of this backlash probably came in 1992, when Michale Crichton published the best-seller Rising Sun, a novel about the evil machinations of a Japanese company operating in the United States. The novel, which was made into a movie starring Sean Connery the next year, came with a long postscript warning about the dangers that Japanese companies posed to the United States.

As youcan see from Figure 7-5, however, foreign direct investment inthe United States was slumping even as Rising Sun hit the bookstores. And public concern faded along with the investment itself...

The political reception for foreign investors in the 1990s was utterly different from that given to the previous wave. It's not clear to what extent Americans were even aware of the wave of money pouring in; Michael Crichton gave up on economics and went back to writing about dinosaurs."

- Krugman & Obstfeld, p. 162-3


"A variant on the import quota is the voluntary export restraint (VER), also known as a voluntary restraint agreement (VRA). (Welcome to the bureaucratic world of trade policy, where everything has a three-letter symbol.)" - p. 191

[On EU "1992" harmonisation of regulations] "The most emotional examples involved food. All advanced countries regulate things such as artificial coloring, to ensure that consumers are not unknowingly fed chemicals that are carcinogens or otherwise harmful. The initially proposed regulations on artificial coloring would, however, have destroyed the appearance of several traditional British foods: pink bangers (breakfast sausages) would have become white, golden kippers gray, and mushy peas a drab rather than a brilliant green. Continental consumers did not mind; indeed they could not understand how the British could eat such things in the first place. But in Britain the issue became tied up with fear over the loss of national identity, and loosening the proposed regulations became a top priority for the government. Britain succeeded in getting the necessary exemptions. On the other hand, Germany was forced to accept imports of beer that did not meet its centuries-old purity laws, and Italy to accept pasty made from - horrors! - the wrong kind of wheat." - p. 211

"Major international trade negotiations invariably open with a ceremony in one exotic locale and conclude with a ceremonial signing in another. The eight round of global trade negotiations carried out under the GATT began in 1986, with a meeting at the coastal resort of Punta del Este, Uruguay (hence the name Uruguay Round). The participants then repaired to Geneva, where they engaged in seven years of offers and counteroffers, threats and counterthreats, and, above all, tens of thousands of hours of meetings so boring that even the most experienced diplomat had difficulty staying awake." - p. 227

"The economic impact of the Uruguay Round is difficult to estimate. If nothing else, think about the logistics: To do an estimate, one must translate an immense document from one impenetrable jargon (legalese) into another (economese)" - p. 229

[On Venezuela vs the USA in the WTO on oil imports in 1995] "In the mythology of the anti-globalization movement, which we discuss in Chapter 11, the WTO's intervention against clean-air standards has taken on iconic status: The case is seen as a prime example of how the organization deprives nations of their sovereignty, preventing them from following socially and environmentally responsible policies." - p. 230

"For the most part, commentators who believe that rapid growth in the HPAEs [Ed: High Performance Asian Economies] is due to aggressive government intervention are not trained economists; indeed, the whole debate over the sources of Asian growth is tied up with a broader and quite acrimonious debate over the usefulness of economic theory in general. For an influential example both of the claim that Asian growth was fostered by interventionist policies, and of hostility to economists, see James Fallows, Looking at the Sun: The Rise of the New East Asian Economic and Political System (New York: Pantheon, 1994.)" - p. 255, footnote

"The Brander-Spencer analysis can be illustrated with a simple example in which there are only two firms competing, each from a different country. Bearing in mind that any resemblance to actual events may be coincidental, let's call the firms Boeing and Airbus, and the countries the United States and Europe." - p. 262


"Others pointed out that the shipbreaking industry of Alang was in many ways exactly what a country like India needed... [it] directly or indirectly supported perhaps a million people and provided India with overseas earnings it desperately needed. The workers of Alang earned very low wages and endured terrible working conditions by Western standards, but by Indian standards they were relatively well paid. And beyond economics, there was something heroic about the industry: The shipbreakers were proud of what they did, of their skill and courage.

So was the shipbreaking industry of Alang something to be condemned or praised? In their efforts to shut it down, were activists helping India, or were they depriving desperately poor people of much-needed opportunities in order to satisfy their own fastidiousness?" - p. 273