Hello Kenneth!!! Thank you for the great speech! 😲
Just wanted to clarify something! When you talk about ‘integration’, are you referring to different companies / governments / industries working closely together to achieve shared goals? 🙂
Also! Would it be accurate to say that the difference between positive integration and negative integration is that positive integration is sustainable, fair for all collaborators and economically strategic while negative integration is none of these?
Appreciate it, Julian! When I say “integration,” I’m talking about purposeful coordination across companies and governments to deliver a commercially-viable product/set of standards, joint financing, pooled IP, and explicit work-shares.
* Negative integration: we remove barriers (tariffs/quotas/regulatory frictions). It's good for efficiency, but it doesn’t guarantee local capability. It is market-creation for a yet-deferred payoff.
* Positive integration: we create shared institutions and projects — joint R&D, procurement, financing vehicles, standards bodies — so partners specialise and co-produce. Partners negotiate upfront.
Positive integration tries to aim for fairness and sustainability (since they are probably necessary to get countries to commit in the first place). It also enables us to build capabilities (not just market access), so I think it's economically strategic. That's not to say that negative integration is none of these, but rather it is silent on these questions, and can fall on either side of the fence (fair or unfair, sustainable or not). That's why I believe countries may proceed slowly on implementing the spirit of tariff-removal, putting up non-tariff barriers - because they cannot easily judge the balance of payoffs for their domestic economies. You may create a market, but who benefits?
But the two ideas are not opposed, and they can co-exist and complement each other.
Hello Kenneth!!! Thank you for the great speech! 😲
Just wanted to clarify something! When you talk about ‘integration’, are you referring to different companies / governments / industries working closely together to achieve shared goals? 🙂
Also! Would it be accurate to say that the difference between positive integration and negative integration is that positive integration is sustainable, fair for all collaborators and economically strategic while negative integration is none of these?
Appreciate it, Julian! When I say “integration,” I’m talking about purposeful coordination across companies and governments to deliver a commercially-viable product/set of standards, joint financing, pooled IP, and explicit work-shares.
* Negative integration: we remove barriers (tariffs/quotas/regulatory frictions). It's good for efficiency, but it doesn’t guarantee local capability. It is market-creation for a yet-deferred payoff.
* Positive integration: we create shared institutions and projects — joint R&D, procurement, financing vehicles, standards bodies — so partners specialise and co-produce. Partners negotiate upfront.
Positive integration tries to aim for fairness and sustainability (since they are probably necessary to get countries to commit in the first place). It also enables us to build capabilities (not just market access), so I think it's economically strategic. That's not to say that negative integration is none of these, but rather it is silent on these questions, and can fall on either side of the fence (fair or unfair, sustainable or not). That's why I believe countries may proceed slowly on implementing the spirit of tariff-removal, putting up non-tariff barriers - because they cannot easily judge the balance of payoffs for their domestic economies. You may create a market, but who benefits?
But the two ideas are not opposed, and they can co-exist and complement each other.