An engineer's tecnocracy for industrial circulation

With the US government's tariffs on the Canadian automotive sector remaining unchanged, Stellantis, the maker of the Jeep Compass, announced a $13 billion investment to relocate its Brampton, Ontario, plant to Illinois. Canadian Industry Minister Mélanie Joly, a successor to the Trudeau administration, threatened economic sanctions against the company for violating its operational commitments in Canada, claiming it had received subsidies to establish operations there. Stellantis also received subsidies for another plant in Windsor, Ontario, to produce electric vehicles, according to information obtained through a parliamentary inquiry into the federal government.

Industrial circulation is common practice in this sector: while administrative threats are the flip side of poorly allocated subsidies, tariffs directly impact the exchange of components and vehicles, costing Stellantis, according to its CEO Antonio Filosa, some $350 million to date. For this reason, Jeep wants to return to the United States, the country it officially calls “home.” While Western politicians apply sanctions after the fact and without any engineering knowledge, hiring exorbitantly expensive independent consultants, a dedicated technocracy is building an empire to export its industrial model.

The technocracy of engineers

For over five years, China has pursued a dual-circulation strategy to curb any foreign dependence on intellectual property. It promotes self-sufficiency and expands its domestic market by establishing high-tech industries. It combines domestic factors with foreign direct investment and champions a post-humanist philosophy that explains how technology, AI, and wearable devices redefine and decentralize human existence. It recognizes post-human rights and maintains an autocratic social order with technological intelligence, broadening the ethical spectrum to encompass a balanced relationship between humans, animals, plants, and machines.

Furthermore, it translates the technical language of engineering concepts into plain legal terms, thereby diminishing the importance of the individual craftsman and mitigating the impact of intellectual property. China avoids distinguishing between technical and ordinary regulations because both are readily understood by the average citizen who enjoys unrestricted access to technological development. It assumes that engineers regulate, innovate, and create for the common good and values ​​its technocracy because it controls this two-way flow. It avoids any political debate, distancing itself from the complexities of Western democracy, because it authorizes the unrestricted application of technology in the service of social progress.

China graduates 1.38 million engineers each year, seven times more than the United States. Xi Jinping is a chemical engineer, a graduate of the prestigious Tsinghua University, which has educated 22% of his party members, who manage the country's most important STEM (Science, Technology, Engineering, and Mathematics) center. At the end of 2024, of the 75 members of the Chinese Politburo, the CCP, 63 held postgraduate degrees (35 with PhDs), 5 were graduates from abroad (4 from the United States and 1 from Australia), and 29 were engineers, including 9 specialists in the military industry.

The technocracy of engineers operates at the national level to manage technology transfers. It cleverly exploits the inefficiency of the WTO regulatory system, while its domestic market develops at an incredible pace and expands globally through decisive and calculated investments by its engineers. Today, even the freest Western countries advocate adopting some form of technocratic system to remain competitive.

Deviations from multilateralism in intellectual property

The application of the TRIPS Agreement has always generated controversy within the WTO. While WIPO applauds Jayce Payackapan, the artist-entrepreneur who founded Songatew Sync, a small business that manages copyrights for Asian musicians, its director, Francis Curry, believes that multilateralism is the only path to the global mobility of intellectual property. He criticizes national regulations for failing to keep pace with the speed of technological change.

However, it is the clash between the monopoly of ideas, or intellectual property protection, and the principle of global free trade that strikes at the ideological heart of multilateralism. This legal conflict between monopoly and freedom has paralyzed all multilateral organizations. The failure of multilateralism, flawed by the unenforceability of its fragile dispute resolution mechanisms, has underestimated the technocracy of engineers, favoring cumbersome political debate over orderly development. This is not, as Curry argues, a disconnect from the speed of innovation, but rather a Western disregard for undeniable geopolitical, economic, and technocratic success. The deviations from multilateralism are proliferating, weakening free trade through hidden taxes that mask ill-gotten subsidies, precisely because democracies fail to keep pace with technological change, subsuming it instead into costly and unproductive political debate. From this clash, no real winner emerges, allowing a constant stream of demagogic, regulatory debate to continue.

Demagoguery of taxes and subsidies for technology transfers

In August, Brazil's Supreme Federal Court (STFB) set a tax precedent regarding the Economic Intervention Contribution (CIDE) in extraordinary appeal 928943 filed by Scania Latin America Ltda. The CIDE, as it is known in Brazil, levies a 10% contribution on remittances abroad to finance a business-university incentive program for innovation. It is a cost of doing business in Brazil, not an income tax.

Following the Supreme Court ruling, the CIDE tax, which previously only applied to technology contracts and patent or software licenses, began to affect contracts for technical and administrative services, copyrights, and royalties paid to foreign companies. It became known as the "CIDE-remittances" tax, increasing the country-specific costs of numerous international transfers. For leading companies like Netflix, this resulted in a $619 million loss in accounting provisions and a 10% drop in their stock value last month.

Conversely, a month later in September, the government launched Redata, a promising measure that stimulates the creation of data centers by incentivizing foreign investment in research and development of digital production chains. Redata was presented to the Trump administration at the bilateral meeting in Malaysia, but OpenAI announced its installation in Milei's Argentina.   

How to manage this contractual context?

Starting November 5th, the United States Supreme Court will hear arguments regarding the constitutionality of tariffs. This marks the beginning of a process to build a case against free international trade in goods, aimed at reducing a massive trade deficit that has never been offset by the revenue generated by intellectual property. Following the TikTok ruling, the court is examining a different kind of technocracy, one built on trade tariffs.

By 2026, without a doubt, the intelligence of contracts linked to industrial circulation will be defined sectorally, likely moving away from intellectual property to strengthen free access to technology. For example:

• In the automotive sector, trade quotas have been set. In the agreement between the UK and the United States, the British secured a quota of 80% of their cars (100,000) of those exported by 2025. Canada, on the other hand, has challenged the legality of its neighbor's tariffs, publishing an extremely expensive advertisement financed by Ontario, now criticized as misleading for editing an old speech by Ronald Reagan, in an attempt to influence the Supreme Court's analysis. That advertisement effectively ended bilateral negotiations. Japan and the EU wisely reached reasonable tariff agreements at 15%.

• The pharmaceutical sector will invest more in the US because it relies on government purchases for 43% of its business. Companies like J&J and Roche have committed investments of nearly $55 billion, Gilead $32 billion, among others, with a major expansion of GLP-1 (anti-obesity) drugs.

• In the consumer goods market, international distribution contracts are designed implementing a "just-in-time" model, based on the elasticity of each product to avoid compromising stocks that run out with the tariffs.

• Innovation and licensing agreements will disrupt revenue-sharing, forcing parties to choose between market access and operational efficiency. This loss of flexibility affects the governance of open-source and general-purpose intellectual property, favoring the choice of US law and the establishment of technology companies in that country.

• Subsidies disguised as taxes are now commonplace for attracting foreign direct investment. It remains to be seen whether they are ideologically aligned with the concept of digital sovereignty, which, far from incentivizing, forces technology transfers.

• In general, contractual execution periods are shortened to less than five years, adding clauses that address possible regulatory changes in technology transfers and that impose a duty of immediate adaptation, a flexibility of force majeure in the face of distribution disruptions.  

• Clauses emerge that govern freedom of communication and the validity of NDAs, in the face of new regulatory contexts, supported by the agreed interpretation of concepts and technological changes.

• Termination and modification clauses for convenience can resolve disputes that are impossible to resolve in a litigious context in the face of changes in international trade.

• Risk provision and deadline extension clauses will be common to correct delays in projects, such as the construction of data centers.

• Industrial circulation will be flexible and continuous; establishment and foreign direct investment will be temporary gains, adding transparency in countries where subsidies are granted.

The regulatory technocracy of engineers does not allow for demagogic failures, and it is this experience that is now being imposed on the Western world when negotiating industrial circulation and innovation. It is necessary to assimilate an efficient posthumanism and superimpose it on the old welfare state to carry out a technological engineering that ethically shakes the monopoly of ideas, freeing the straight path of global development.