WHOI-90-52

the case with many advance tehnology industries, the industral organization of the MEI field
is complex and does not lend itself easily to analysis. There are in fact severa identifiable,
overlapping markets, and the field is "unified" through end user similarties as well as product
complementaty or substitutabilty. Here we do not attempt a complete description of the
industrial organization of the Europe MEI industry. 4 Our purpse is to characterize broad
economic parameters of relevance to this industr and to examine domestic and international
government policies that may influence the competitiveness of products manufactured by U.S.
firms in Europe markets.
Europe Marne Sectors
The markets for advance marne technologies in Western Europe are large and growing. The
capabilties for resech and development, manufacturing, and marketing of marne technologies
are well established in France, Germany, Itay, Norway, and the Unite Kingdom. Similar
capabilties are nascent but growing in Denmark, Finland, and the Netherlands. Traditionally,
U.S. firms have maintaned strong competitive positions in advanced marne products markets
worldwide -- including Europe.
5 However, the strcture of the Europe market is changing
rapidly, due mostly to government influences as well as other factors.
In the Unite States, base upon a preliminar review, we estimate tota saes of MEI products
to be approximately $5 billion annually. 6 Comparble estimates for the size of economic
activity in the Europe MEI industr are rougher than those for the United States becuse of
a paucity of similar industr data. Severa Western Europe countres are "leaders" in the MEI
field. These countries are importt not only becuse of their production capabilties but also
4 Such a description wil be even more difficult for the industry in Europe than for the
industr in Nort America becuse of data inadequacies. Recnt attempts to begin describing
the strcture of the MEI industr in Europe have been initiated by the Deparment of Trade and
Industr (OT!) in the United Kingdom, IFREMER in Frace, and the Europe Communities
in Belgium. We report on some of these studies below.
5 Base upon limited trde data obtaned from the U.S. International Trade Commission, we
estimate that in 1987 of the tota U.S. exports of MEI products (about $1 bilion) about 30
percent went to Europe end users. We have only limited and incomplete data on trade
balances, but these data appe to suggest that the U.S. has.a trde surplus in MEI products with
Europe and a trde deficit with Japan and Canada.
6 Several methods have been use for this estimation, resulting in a range of estimates of
from $3-5 bilion. The world market is estimated at roughly double the U.S. market. Methods
for makg these estimates are described in Broadus et al. (1988). Two fundamenta statistical
sources have been the U.S. government's "Current Industral Reports" and "Census of
Manufactures" series. It has been possible in many cases to identify the value of U.S.
"shipments" down to the seven digit industral classification leveL. Statistics are available on
U.S. exports and imports as well, although the coverage is less complete.
15