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BEYOND20


S&T agreements that systematically coordinates cross-borderR&Dto capitaliseonnewopportuni- ties both to enhance the countries’ collective international competitiveness and to better cap- turethevalue oftheinvestmentstheyundertake. The time has certainly come for the G7 to


move beyond ‘science diplomacy’. But this does not mean international S&T agreements should be shoehorned into the existing regimes of inter- national tradeagreementsorinvestment treaties. Rather, international S&T agreements need


to be modernised to generate more dexterity in establishing and managing international R&D relationships to serve both the economic and national security interests of the signatories. Indeed, the G7 countries need to redesign their approach to R&D collaboration so that it is inte- grated into their international trade and invest- ment strategies. Put another way, international S&T agreements should now be viewed as the ‘third leg’ of each nation’s international trade and investment stool. That stool will be unstable so long as S&T agreements are relatively weak and misdirected. This fix is long overdue. G7 countries have


entered into a sizeable number of S&T agree- ments with each other. Most, it should be said, are structured only on a bilateral rather than a plurilateral basis. Despite some admirable goals stated in the texts, they often lack clear, measur- able objectives, enforceable terms or anticipated economic and other impacts they have the potential to deliver. Their contrast withinternational tradeagree-


ments and investment treaties is stark. I know this first-hand in the case of the US because, ear- lier in my career, as US Assistant Trade Representative, within the Executive Office of the President, I oversawUS negotiations of inter- national trade agreements and investment trea- ties at thesametimethat I co-ledUSnegotiations for international S&T agreements with a cohort from the State Department. Then, as is stillmostly true today, while nego-


tiatingandoverseeing theimplementation ofUS international trade agreements and investment treaties typically draw on contributions from a range of federal departments and offices, my agency and the State Department were largely the only entities involved in carrying out those functions for international S&T agreements. In most G7 countries, the agencies that lead


the negotiation and oversight of international S&Tagreements are frequently the ministries for foreign affairs. The governmental entities with economic and S&T policy expertise play a less consequential role. At the same time, there tends to be a well-


defined process for government officials to inter- act with important domestic stakeholders who will be affected by international trade agree- mentsandinvestmenttreaties as they are negoti- ated andmonitored. In the case of international investment treaties, in particular, there is a pub- lic airing of a ‘model’ text that serves as the basis for the negotiations withforeign parties.Overall,


February/March 2021 www.fDiIntelligence.com


the process governing these arrangements is inclusive, in contrast with that for international S&T agreements. Perhaps most importantly, S&T agreements


do not typically contain bedrock principles that give the international trade agreements and investment treaties their real power: ‘reciproc- ity’, the same benefits or penalties are applied to all parties to an agreement; and ‘national treatment’, treating foreigners the same as domestic parties. EvenwhenS&T agreements do contain these


provisions, they are routinely viewed as lip ser- vice and go unenforced. In fact, few if any S&T agreements contain any meaningful tools to exact remedies when there are violations or dis- putes. The result is foreign firms engaging in commercially oriented, pre-competitive R&D in another country have no protection against less favourable treatment than domestic counter- parts. Even worse, few international S&T agree- ments specify who owns the intellectual prop- erty generated by jointR&Dactivities, howconfi- dential business informationis to be treated,and the parameters governing joint R&D commer- cialisation. These amount to disincentives to cross-borderR&Dcollaboration. The role of China speaks directly to the


urgency of strengthening international S&T agreements. In the area of wireless technology, for example, Chinese companies are moving quickly to establish primacy that would essen- tially force other countries to rely on them and their standards. That could hobble efforts to maintain personal privacy and a level commer- cial playing field. Democratic, market-oriented countries therefore have a strong incentive and responsibility to establishrules that protectdem- ocratic norms and prohibit one country from gaining outsized strategic leverage over the rest. In this context, much of the current debate


about the undue concentration of G7 countries’ production located in, or supply chains emanat- ing from, China is focused on the wisdomof, or eventhe ability for, instituting governmentman- dates to force foreign companies to ‘decouple’ from China. Putting aside the dearth of understanding by


proponents of decoupling how foreign firms actually function in China, the objective they are pursuing is, at its core, one of defence, not offence. Moreover, their focus is centredmoreon incumbent products than on R&D investments that will not only drive the next generation of them but also enhance such firms’ abilities to capture the value from such investments. It is the latter area on which fresh collective


efforts for devising the next generation of inter- national S&T agreements among the G7 must focus. Establishing the R&D7 in Cornwall this summer would be an important step in that direction.■


Harry G. Broadman is managing director at BerkeleyResearchGroupandafacultymember atJohnsHopkinsUniversity


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