Economic Affairs
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David G. Victor
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Having backed down from its trade dispute with the EU over GM food, the Bush administration will find it hard to make the threat of going to the trade organization credible again and to continue the momentum toward removing Europe's ban.

STANFORD, California - The Bush administration wisely backed away this month from formally challenging Europe's ban on genetically modified foods. It made no sense to antagonize Europeans over the food they eat when they are pivotal to more weighty matters, such as a new resolution on Iraq.

Still, Washington's threat that it would file a case against the European Union at the World Trade Organization had palpable benefits. Even the countries with the most hostile policies on engineered food - France and Germany among them - took steps toward allowing the European Union to work on replacing the blanket ban with a new system for tracing and labeling engineered food.

But the decision to back off also means that American farmers are still denied access to the lucrative European market. European consumers still pay more for food than they should. And developing countries that could most benefit from engineered crops are still frightened that losing their "engineering-free" status will make it impossible to export food to Europe.

Yet the science on food safety is as certain as it ever gets: There is no known danger from eating engineered food.

Having backed down, the Bush administration will find it hard to make the threat of going to the trade organization credible again and to continue the momentum toward removing Europe's ban. But even harder for the administration will be keeping domestic politics at bay.

The biggest threat to the success of the U.S. strategy on engineered foods is in the American heartland, which is angling for a fight with Europe over the ban as the 2004 elections approach. Senator Charles Grassley of Iowa called the decision to defer a trade dispute "the usual snobbery" of a State Department "more concerned about international sensitivities than the American farmer." Two tactics should guide the effort to open Europe's markets. One is to let the Europeans lead their own reform.

The engineered foods available to consumers today mainly benefit farmers who can grow them at lower cost. These foods look and taste the same as their traditional counterparts. For rich consumers in Europe willing to pay a bit more, it is easy to focus on hypothetical risks and shun these products. But the next generation of engineered foods, already nearing the marketplace, will have healthful benefits for consumers - fruits that contain cancer-fighting lycopene, for instance - and this will make it harder for European countries to bar all these foods.

During the furor last summer over Zambia's rejection of genetically modified corn, prominent European politicians were forced to declare that these foods were safe - a blatant contradiction of Europe's own policies.

The other tactic is outreach to the developing world. In the poorest nations, agriculture provides the livelihood of most of the population, and agricultural research proves that genetic engineering can make crops that poor farmers grow both healthier and more productive.

Yet research on engineered crops and support for farmers who grow them lack money, not only in U.S. agricultural development and extension programs but also at the international agricultural research centers that were the engine of the first green revolution. In the last decade American support for international agricultural research has declined considerably.

An American program that would finance agricultural research on novel uses for genetically modified crops in developing countries would help those countries and could eventually help open European markets.

An American-led effort to pry open those markets would backfire. But one led by a developing country could succeed, as Europe considers the moral issues posed by barring food from a country which needs to sell its crops to survive. So far, few developing countries (South Africa is one exception) allow commercial planting of engineered crops. The United States needs to overcome the fears of the developing nations by growing such crops there and demonstrating how they could transform agriculture.

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This seminar is part 2 of SPRIE's 5-part series on "Greater China: Entrepreneurial Leaders."

From a venture capital investor's perspective, what are the key opportunities and challenges of doing business in China in the current environment? Why? How is China's emerging private equity investment industry? What are the major differences between "home-grown" Chinese private equity firms and foreign capital firms? Bobby Chao will address these questions, based on personal experience gained over the past twenty years.

Bobby Chao began his career as one of the five original founders of Cadence Design Systems. A year after Cadence's successful IPO, Bobby founded Ocron, a leader in Optical Character Recognition (OCR) technology and document management software. Bobby was chairman and CEO of Ocron until Umax Technologies, Inc. acquired it. He then became part of the Umax team serving as senior vice president of marketing in charge of corporate marketing and investment. Bobby was previously general partner for Technology Associates Management Company and has served as chairman and CEO of VA Linux Systems.

Mr. Chao currently serves as chairman of Dragon Venture Inc., a cross-pacific venture capital, consulting, and M&A company, bridging the U.S. and Greater China markets. Portfolio companies focus on telecommunications, Internet infrastructure, Linux, fables IC designs, and EDA. Mr. Chao is currently on the board of several companies and professional organizations.

Mr. Chao holds a B.S. in physics from Taiwan, an M.S. in physics from Georgia State University, and an M.S. in aeronautical engineering from Stanford University.

Philippines Conference Room

Seminars
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Elections in Thailand in January 2001 yielded a remarkable near-majority for the Thai Rak Thai ("Thai Love Thai") Party of computer and telecommunications billionaire Thaksin Shinawatra, who became prime minister despite serious legal charges of tax evasion. Although the Constitutional Court acquitted him (by a close 8-to-7 vote), his tenure in office has given rise to widespread impressions of populism on the one hand and corruption on the other.

In her talk, Dr. Phongpaichit will explore the background and implications of Thaksin's rise to power and his ongoing use of it. Pasuk Phongpaichit is Thailand's best known and most widely read economist. Books authored or coauthored by her include Corruption and Democracy in Thailand; Thailand: Economy and Politics; Thailand's Crisis; Thailand's Boom and Bust; The Thai Village Economy in the Past; Employment, Income and the Mobilization of Local Resources in Three Thai Villages; Challenging Social Exclusion: Rights and Livelihood in Thailand; Guns, Girls, Gambling, Ganja: Thailand's Illegal Economy and Public Policy; and From Peasant Girls to Bangkok Masseuses.

Her current research is on "The Structure and Dynamics of Capital in Post-Crisis Thailand." In fall 2002 she was a visiting professor at the School of Advanced International Studies in Washington, DC. She received her Ph.D. in economics from Cambridge University.

Daniel and Nancy Okimoto Conference Room

Pasuk Phongpaichit Speaker
Seminars
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Vinod Aggarwal is professor in the Department of Political Science, affiliated professor of Business and Public Policy in the Haas School of Business, and director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at the University of California at Berkeley. He has been at Berkeley since 1980, and from 1991-1994 was chairman of the Political Economy of Industrial Societies Program.He is also the founder and editor-in-chief of the journal Business and Politics. Dr. Aggarwal consults regularly with multinational corporations on strategic planning, trade policy, and international negotiations. In the public sector, he has been a consultant to the Mexican Government, the U.S. Department of Commerce, OECD, the Group of Thirty, IFAD, and the World Bank. In 1990, he was special adviser on Trade Negotiations to the United Nations Conference on Trade and Development (UNCTAD) in connection with the GATT Uruguay Round negotiations and has also served as an adviser to Dr. Fred Bergsten, chairman of the APEC Eminent Persons Group. In 1997, he won the Cheit Outstanding Teaching Award at the Haas School of Business. Professor Aggarwal's authored books include Liberal Protectionism, International Debt Threat, and Debt Games, and his edited volumes include Asia-Pacific Crossroads. He is currently completing a volume on American corporate market and nonmarket strategies in Asia. He received his Ph.D. from Stanford University. This seminar is part of the Shorenstein Forum's ongoing series, "The California-Asia Connection." Lunch will be served to those who RSVP to Debbie Warren at dawarren@stanford.edu or 650-723-2408 by Friday, January 31, 2003.

Daniel and Nancy Okimoto Conference Room

Vinod Aggarwal Director, APEC Study Center Speaker Professor, Political Science, University of California, Berkeley
Workshops
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This lecture is part of a special series on Contemporary China hosted by Shorenstein APARC's Walter H. Shorenstein Forum.

Philippines Conference Room

David Lampton George and Sadie Hyman Professor of China Studies and Director, China Studies Program Speaker Paul H. Nitze School of Advanced International Studies, Johns Hopkins University
Workshops
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This lecture is part of a special series on Contemporary China hosted by Shorenstein APARC's Walter H. Shorenstein Forum.

Philippines Conference Room, Third Floor, Encina Hall, Central Wing

Nick Lardy Senior Fellow, Foreign Policy Studies Speaker The Brookings Institution
Workshops
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This lecture is part of a special series on Contemporary China hosted by Shorenstein APARC's Walter H. Shorenstein Forum.

Philippines Conference Room

Workshops
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This lecture is part of a special series on Contemporary China hosted by Shorenstein APARC's Walter H. Shorenstein Forum.

Philippines Conference Room, Third Floor, Encina Hall, Central Wing

Barry Naughton So Kwanlok Professor of Chinese and International Affairs Speaker Graduate School of International Relations and Pacific Studies, University of California, San Diego
Workshops
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As Secretary of the Technology, Trade, and Commerce Agency, Lon Hatamiya advises the governor and the legislature on all matters related to international business, serving as the voice of California's private sector in the State Cabinet. Appointed by Governor Gray Davis in 1999 and confirmed unanimously by the State Senate, Secretary Hatamiya is the first Asian-American to hold a cabinet-level position in California history. As the state's primary promoter of economic development, he directs numerous programs stimulating economic activity for international trade and investment, and under his leadership the Agency added the Division of Science, Technology, and Innovation, focusing on R&D and the commercialization of new technologies. Prior to his appointment as secretary, Mr. Hatamiya served as administrator for the Foreign Agricultural Service in the United States Department of Agriculture (USDA). He holds a degree in economics from Harvard University, and JD and MBA degrees from the University of California, Los Angeles.

The Oksenberg Room, Third Floor, Encina Hall, South Wing

Lon Hatamiya Secretary Speaker California Technology,Trade and Commerce Agency
Workshops
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