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arers wil bend to such review remains in question.
Procurement policies currently are undergoing close scrutiny by the Commission of the Europe
Communities (CEC). However, the focus of this scrutiny is directe
primarly at those
(nondefense) areas in which changes in procurement policies ca make the largest difference:
telecommunications, trsport, energy, and water (CEC, 1989). Under the provisions of the
GA'I, a "buy national" procurement policy for defense manufactures is not necessaly
considered a nontaff barer to trade. Beuse trditionally much of the international trde in
MEI has involved defense manufactures, we do not expet that the haronization of procurement
policies within the common market wil have much of an additional effect on the competitive
position of U.S. firms in the MEI industry.
A speial typ of nondefense procurement policy is relevant to the MEI industr. One source
of support for R&D in marne electronics results from the offshore oil and gas lease alloction
policies of the United Kigdom and Norway. In these countres, offshore exploration and
development licenses are not distrbuted by competitive bid, as in the United States, but instead
through a discretionar procss (OTA, 1985). There is no official requirement for Nort Sea
offshore energy producing firms to fund R&D as par of their British lease obligations, but R&D
expenditures are use as one criterion in allocting offshore entitlements. As a result, the U.K.
oil majors generate some $20 milion in annual external mare R&D funds--an order of
magnitude larger than direct British government R&D expenditures in this area. In Norway, the
government keeps recrds (voluntay supplied) of offshore firs' support of R&D conducted
by Norwegian companies and considers both the quantity and quality of this support when
makng lease alloctions. This has resulte in substatial financial and technica assistace from
energy companies for product development at Norwegian firms, although resulting products have
not always been successful commercially (Cook and Surrey, 1983).
The United Kingdom also has use offshore lease alloctions to enforce its policy of preferential
treatment for "British-base" offshore service and supply firms. The U.K. Offshore Supplies
Office (OSO) monitors interactions between energy companes and service firms and influences
offshore entitlement aloctions for the purpse of maintaning and supportng the existence of
an offshore service industr. In 1985, the "British-base" requirement was changed to "majority
British-owned, " prompting several U.S. companes to reorganize their operations in the United
Kingdom (DoS, 1989). OSO activities represent an explicit effort to keep Britan at the forefront
of new offshore tehnology developments.
There has been little evidence to date of technica stadards16 affecting MEI saes to Europe,
16 Technica product stadards are importt for severa reasons. Governments or nonprofit
stadard setting institutions may require that products meet minimum stadards to protect public
heath, saety, and the environment. By decreasing information asymmetres between producers
and consumers on complicate high tehnology products, public stadards also may be importt
in the prevention of consumer fraud. Industry groups ca play an importt role in market
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