High-Tech Trade Wars: U.S.-Brazilian Conflicts in the Global Economy (review)

In the 1970s, Brazil instituted a controversial industrial policy for its computer and telecommunications sector. Designed to break the country's dependence on foreign technology, the Informatics Law protected national producers from competing imports and kept foreign investment out of the minicomputer and personal computer markets, effectively preserving these markets for Brazilian firms. In High-Tech Trade Wars, Sara Schoonmaker recounts the subsequent conflict between Brazil and the United States within the larger context of globalization. Combining political economy with the insights of poststructuralism, she conceptualizes globalization as a discourse, or a narrative of knowledge and power: "By defining the market as driven by objective underlying laws, the neoliberal globalization discourse supported the interests of global capital and first World governments" (p. 172). In contrast, Brazil's "informatics strategy formed an oppositional, nationalist development discourse where the underlying cultural values and specific policy regulations were designed to challenge efforts by global capital to control the Brazilian informatics market" (p. 16).

Schoonmaker describes the global political conflicts over telecommunications policies and their implications for digital trade. The United States successfully reframed the debate over telecommunications policies in terms of transborder data flows, which then fell under the rubric of national trade policies, and ultimately, multilateral institutions such as the General Agreement on Tariffs and Trade. She then recounts how the United States imposed trade sanctions against Brazil due to its "unfair trading practices" in informatics and details the Brazilian government's responses to the foreign and domestic pressures emerging from these actions. In analyzing the subsequent dismantling of the market reserve in 1990, Schoonmaker argues that it represented "the defeat of an oppositional, nationalist approach to development." Despite the market opening to foreign investment, however, many domestic firms survived, firms that had developed their own niches and capabilities, usually in alliance with foreign firms. What's more, local and foreign firms—former adversaries—together defended policies supporting national productive capacity against fully liberalized imports.

Schoonmaker succeeds in illustrating how the outcome of globalization is "socially constructed through a complex, volatile process of political and economic struggle" (p. 3). She demonstrates how countries like Brazil are not simply subject to the dictates of global capital, but may have some autonomy to shape their insertion in the global economy; how the international market presents "both economic opportunities and constraints on efforts to implement development policy" (p. 118); and how the "denationalizing tendency" of globalization does not always lead to the elimination of local firms. This book is an important contribution to the large body of work that analyzes how the impact of international structural constraints on less-developed countries is mediated through the particularities of economic, political, and historical conditions—an important insight within the current debate over globalization, though not novel.

At times, Schoonmaker subsumes her complex story into deterministic categories, as when she claims that "Brazil's dependency on exports to foreign markets" was a key constraint (p. 119). While she convincingly describes how Brazilian exporters subjected to U.S. trade sanctions rallied against the informatics policy, she fails to demonstrate how this was connected to Brazil's "historic dependency," unless trade by definition makes all countries "dependent." In fact, Brazil is relatively less "trade dependent" on the United States than other Latin American countries.

The conflict with the United States was as much about investment as about trade, and cannot be understood in isolation from the larger historical context of Brazil's industrial development, which Schoonmaker largely ignores. While trade protection was nothing new in Brazil, foreign firms had been encouraged to invest and were treated as national firms as long as they produced locally. The market reserve for informatics was a conscious exception to this strategy and an attempt to address its perceived limitations in high-tech industries. After the sector was opened to foreign investment, local-foreign...