7116452 Role of MNCs in Shaping Internatinal Relationsgg

8/12/2019 7116452 Role of MNCs in Shaping Internatinal Relationsgg

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Table of Contents

Page No:1

. Introduction 2-8

2

. Significance of MNCs in world Affairs 8-9

a. Influence in Nations' Political Affairs

. MNCs and International Politics

!. "i#ensions of MNCs in$ol$e#ent in world affairs 1%-18

a. "irect engage#ent etween states and non-state actors

. Selecti$e engage#ent& or eisodic urden s(aring

c. MNCs circu#$enting states

)

. MNCs and *(e +*, 19-2!

5. A#erican oreign Polic and Multinational Cororations

6

. Indian MNCs-Can Indian rands #a/e 0rand India gloal3 24-29

5

. Cororate Social 6esonsiilit !%-!2

8

. Conclusion !!-!8


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Introduction

C(anging role of nation state in world affairs and Non state actors $i7. MNCs

,$er t(e ast decade& t(e wa we $iew foreign olic (as funda#entall s(ifted. +(ile

t(e ears fro# t(e *reat of +est(alia in 14)8 to t(e fall of t(e So$iet nion in 1991

was t(e era of t(e nation-state& t(e eriod since #a e $iewed in a $astl different lig(t

as t(e era of t(e non-state actor. or #ore t(an t(ree centuries& t(e nation-state (as ser$ed

as t(e foundation of t(e gloal olitical order(ence t(e international; sste#.

Alt(oug( t(e nation-state re#ains do#inant& no longer can it necessaril e considered

ree#inent. +it( t(e fading of suerower ri$alr& t(e ad$ent of econo#ic and olitical

gloali7ation& t(e di#inis(ed role of t(e state in econo#ic affairs& t(e asence of strong

suranational aut(orities& and t(e sread of new co##unication tec(nologies& t(e role of

t(e nation-state (as dra#aticall eroded. *(e end of t(e Cold +ar (as roug(t aout a

no$el redistriution of ower a#ong states& #ar/ets& and ci$il societ. National

go$ern#ents are not si#l losing autono# in a gloali7ing econo#. *(e are s(aring

owers...wit( usinesses& international organi7ations& and a #ultitude of citi7en grous

/nown as nongo$ern#ental organi7ations. *(e c(allenge for olic#a/ers is to

co#re(end t(e full anol of NSAs & ri$ate #ilitar contractorswit( t(e acti$e suort of t(e Clinton

ad#inistrationtrained t(e Croatian ar# for its #ilitar offensi$e against Serian reel-

(eld ositions in Croatia and osnia& w(ic( (eled us( t(e regions warring arties

toward eace tal/s. *(is is one s#all e?a#le of w(at #a e t(e #ost i#ortant et

#isunderstood olitical and social de$elo#ents of t(e ost@Cold +ar era: t(e growing

ro#inence and influence of NSAs in gloal affairs. Non-state institutions& cororations&

and ad$ocac grous are laing an increasingl ro#inent role in nearl e$er asect of

foreign olic& fro# ro#oting de#ocrac& ro$iding (u#anitarian relief& and fig(ting


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international terroris# to roelling econo#ic lierali7ation& curing disease& and e$en

waging war.

*(e international landscae aounds wit( e?a#les:

After #ore t(an a decade of international sanctions& Bia was finall forced to accet

culailit in t(e 1988 o#ing of Pan A# flig(t 1%! o$er Boc/erie& Scotland& in art

due to a ci$il lawsuit initiated t(e fa#ilies of t(e $icti#s and a grou of enterrising

trial lawers.

In 1995& a deter#ined acti$istusing e-#ail as (er toolroug(t toget(er an arra of

(u#an rig(ts ad$ocates to lead a gloal ca#aign to an land#ines.

Stretc(ed t(in #ultile conflicts in Afg(anistan and Ira& t(e .S. #ilitar (as

increasingl relied on ri$ate #ilitar contractors. As a result& #ore t(an 2%&%%%

unregulated #ilitar contractors& eui$alent to a .S. Ar# di$ision& ser$e in Ira

alongside coalition forces.

Contagious diseases t(at t(reaten #illions are eing attac/ed as ne$er efore

(ilant(roists and cororations to #a/e a difference.

The Changed Scenario

*ec(nological ad$ance#ent (as eco#e t(e one-si7e-fits-all e?lanation for #riad

social& econo#ic& and olitical c(anges. ut t(ere is little dout t(at t(e de$elo#ent of

co##unications tec(nolog (as laed a crucial role in di#inis(ing state ower. *o e

sure& t(e transfor#ati$e i#act of tec(nolog is not a new (eno#enon. *(e roots of

twentiet(-centur totalitarian rule deri$ed in art fro# t(e ailit of leaders to #aniulate

new for#s of #ass co##unication. *oda& we are witnessing t(e re$erse.

Infor#ation tec(nolog is slowl c(iing awa at t(e ower of states to s(ae and

create ulic oinion. *oda& #ore t(an 1%% #illion C(inese are surfing t(e +e& and

C(ina (as #ore t(an ) #illion logs. In fact& during t(e SA6S eide#ic& it was C(inese

citi7ens& o$er t(e oDections of go$ern#ent officials& w(o used t(e Internet to ring t(e

issue to t(e fore. More significantl& ad$ances in tec(nological enetration and t(e


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decreasing costs of cross-order co##unication also ro$ide non-state actors wit( t(e

ailit to oerate gloall. Creating an o$erseas resence can e as si#le nowadas as

lugging in a roadand Internet connection or relocating a call center to a foreign locale.

*(e ossiilities are not li#ited to for-rofit institutions. ollowing t(e tsuna#i in t(e

Indian ,cean last "ece#er& t(e Internet eca#e an in$aluale tool for raising #one&

(eling fa#ilies find #issing relati$es& ro$iding news and infor#ation& and e$en ser$ing

as an earl-warning tool. ,n-line donations (eled (u#anitarian agencies raise and

distriute #one& so #uc( so t(at wit(in ten das of t(e cala#it& online donations

al#ost #atc(ed t(e initial E!>% #illion ledged t(e .S. go$ern#ent. or etter or for

worse& cororations are increasingl seen as essential ro$iders of caital& tec(nolog&

#anage#ent s/ills& and e$en access to foreign #ar/ets in de$eloing countries. *(e

states set t(e rules& and t(e #a (a$e so#e inut into uilding and aing t(e tea#& ut

t(e are not necessaril t(e ones on t(e field laing t(e ga#e.

efore Sete#er 11& econo#ic integration and trade lierali7ation defined t(e

international agenda& a rocess largel dri$en ri$ate actors. *(e +orld *rade

,rgani7ation& t(e International Monetar und& and t(e +orld an/ o$iousl laed a

role. *(e Clinton ad#inistration also ressed ot(er countries to oen t(eir #ar/ets& uild

transarent regulator regi#es& and rotect intellectual roert. Fowe$er& states li/e

C(ina& India& and t(e for#er #e#ers of t(e +arsaw Pact undertoo/ t(e often-ainful

recess of econo#ic lierali7ation not si#l to lease +as(ington or international

financial institutions& ut to gain access to gloal caital #ar/ets& attract foreign direct

in$est#ent& and t(ere ac(ie$e roust and sustainale econo#ic growt(.

In t(is rocess& t(e efficac of foreign aid (as di#inis(ed. *went ears ago& go$ern#ent

assistance was four ti#es greater t(an t(at of ri$ate caital flows. *oda t(e nu#ers are

re$ersed: ri$ate in$est#ent is now si? ti#es greater t(an foreign aid& and c(aritale

gi$ing to international de$elo#ent is t(ree ti#es greater t(an t(e a#ount gi$en t(e

.S. go$ern#ent. ew would disute t(at co#etiti$e #ar/ets& t(e flow of cross-order

caital& and in$est#ent decisions (uge cororations are dri$ing gloali7ation. *(ese

cororate entities (a$e eco#e t(e #ost i#ortant econo#ic and social actors on t(e


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world stage& ri$aling and so#eti#es surassing t(e influence of states. More t(an >% of

t(e worlds 1%% largest econo#ies are ulicl owned co#anies wit( wor/forces in t(e

(undreds of t(ousands and offices in e$er #aDor region of t(e world.

Mega-si7ed usinesses can e as conseuential to t(e world econo# as e$en so#e

#ediu#-si7ed countries. *o e sure& t(e influence of #ultinationals is (ardl a new

de$elo#ent. *(e difference is t(at in t(e ast large conglo#erates often oerated in

tande# wit( (o#e go$ern#entsG w(ile todas cororate e(e#ot(s are gloal actors in

t(eir own rig(t.

What are MNCs?

As t(e na#e i#lies& a #ultinational cororation is a usiness concern wit( oerations in

t(an one countr. *(ese oerations outside t(e co#an's (o#e countr #a e lin/ed to

t(e arent #erger& oerated as susidiaries& or (a$e considerale autono#. *(e (a$e

t(e caacit to s(ae gloal trade& roduction& and financial transactions. Multinational

cororations are $iewed #an as fa$oring t(eir (o#e oerations w(en #a/ing

difficult econo#ic decisions& ut t(is tendenc is declining as co#anies are forced to

resond to increasing gloal co#etition. Multinational cororations are so#eti#es

ercei$ed as large& utilitarian enterrises wit( little or no regard for t(e social and

econo#ic well eing of t(e countries in w(ic( t(e oerate& ut t(e realit of t(eir

situation is #ore co#licated.

Multinational cororations (a$e e?isted since t(e eginning of o$erseas trade. *(e (a$e

re#ained a art of t(e usiness scene t(roug(out (istor& entering t(eir #odern for# in

t(e 15t( and 18t( centuries wit( t(e creation of large& Huroean-ased #onoolistic

concerns suc( as t(e ritis( Hast India Co#an during t(e age of coloni7ation.

Multinational concerns were $iewed at t(at ti#e as agents of ci$ili7ation and laed a

i$otal role in t(e co##ercial and industrial de$elo#ent of Asia& Sout( A#erica& and

Africa. t(e end of t(e 19t( centur& ad$ances in co##unications (ad #ore closel

lin/ed world #ar/ets& and #ultinational cororations retained t(eir fa$orale i#age as


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instru#ents of i#ro$ed gloal relations t(roug( co##ercial ties. *(e e?istence of close

international trading relations did not re$ent t(e outrea/ of two world wars in t(e first

(alf of t(e twentiet( centur& ut an e$en #ore closel ound world econo# e#erged in

t(e after#at( of t(e eriod of conflict.

In #ore recent ti#es& #ultinational cororations (a$e grown in ower and

$isiilit& ut (a$e co#e to e $iewed #ore a#i$alentl ot( go$ern#ents and

consu#ers worldwide. Indeed& #ultinationals toda are $iewed wit( increased susicion

gi$en t(eir ercei$ed lac/ of concern for t(e econo#ic well-eing of articular

geogra(ic regions and t(e ulic i#ression t(at #ultinationals are gaining ower in

relation to national go$ern#ent agencies& international trade federations and

organi7ations& and local& national& and international laor organi7ations. "esite suc(

concerns& #ultinational cororations aear oised to e?and t(eir ower and influence

as arriers to international trade continue to e re#o$ed.

*(e +orld *rade ,rgani7ation


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Alt(oug( foreign direct in$est#ent in de$eloing countries rose consideral in t(e

199%s& not all de$eloing countries enefited fro# t(ese in$est#ents. Most of t(e foreign

direct in$est#ent went to a $er s#all nu#er of lower and uer #iddle-inco#e

de$eloing countries in Hast Asia and Batin A#erica. In t(ese countries& t(e rate of

econo#ic growt( is increasing and t(e nu#er of eole li$ing at o$ert le$el is falling.

Fowe$er& t(ere are still nearl 1)% de$eloing countries t(at are s(owing $er slow

growt( rates w(ile t(e 2) ric(est& de$eloed countries


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Significance of MNCs in world Affairs

Influence in Nations' Political Affairs

MNCs' influence o$er countries& articularl t(ose in t(e less-industriali7ed world& (as

not een #anifest solel in s(eer econo#ic ower or #aniulati$e rice transfers. Suc(

influence (as also een reflected in cororations' willingness and ailit to e?ert le$erage

directl e#loing go$ern#ent officials& articiating on i#ortant national econo#ic

olic #a/ing co##ittees& #a/ing financial contriutions to olitical arties& and

rier. urt(er#ore& MNCs acti$el enlist t(e (el of Nort(erngo$ern#ents to furt(er

or rotect t(eir interests in less-industrialised nationsG assistance t(at (as so#eti#es (as

in$ol$ed #ilitar force. In 19>)& for instance& t(e S launc(ed an in$asion of Kuate#ala

to re$ent t(e Kuate#alan go$ern#ent fro# ta/ing


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reuire c(anges in t(e ter#s of a co#an's in$est#ent. Let suc( de$elo#ents (a$e

een #inor and te#orar ostacles to t(e aug#entation of MNCs' econo#ic ower& and

o$erall t(e ast t(ree decades (a$e een c(aracterised increased regional econo#ic

integration& t(e lieralisation of #an international #ar/ets& and t(e oening u of new

are as suc( as Central and Hastern Huroe.

MNCs and International Politics

Hseciall since t(e 198%s& MNCs' in$ol$e#ent at international olitical negotiations and

fora (as acco#anied and encouraged t(e rise of gloal cororate econo#ic ower. In an

effort to reduce arriers to trade and in$est#ent caital flows in t(e last decade& MNCs

(a$e loied $igorousl to s(ae to t(eir li/ing Huroe's Single Mar/et agree#ent& t(e

Nort( A#erican ree *rade Agree#ent


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well efore t(e Su##it too/ lace& MNC ressure (ad led to t(e re#o$al fro# NCH"

#aterials roosals to regulate t(e ractices of gloal cororations.

*(is success in 6io underscores a roader issue: alt(oug( MNCs are collecti$el t(e

world's #ost owerful econo#ic force& no intergo$ern#ental organisation is c(arged wit(

regulating t(eir e(a$iour.


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i!ensions of MNCs" in#ol#e!ent in world affairs

$.irect %ngage!ent

In Marc( 2%%)& A#ericans were s(oc/ed i#ages of c(arred and dis#e#ered odies

eing dragged t(roug( t(e streets of t(e Irai cit of alluDa( and t(en (ung in grueso#e

disla. *(e scene roug(t ac/ #e#ories of anot(er traged t(at deel affected

A#ericans and t(e conduct of .S. foreign olict(e /illing of 19 6angers in So#alia

in 199!. ut t(is ti#e t(e corses were not t(ose of .S. soldiers. *(ese #en were

e#loees of lac/water SA& a ri$ate #ilitar contractor. *(e .S. war in Ira (as

underscored one of t(e #ore rofound e?a#les of ulic-ri$ate cooerationt(e use

of ri$ate #ilitar co#anies


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A#ong t(e t(ousands of ri$ate contractors ro$iding logistical suort in Ira& at least2%&%%% e#loees fro# 4% different PMCs are under contract to t(e .S. go$ern#ent toro$ide securit ser$ices. %@5%&%%% unar#ed ci$ilians are in Ira to ro$ideot(er ser$ices& fro# deli$ering #ail to reuilding essential infrastructure.= Ar#edci$ilians& #an of t(e# for#er Secial orces& (andle an esti#ated !% ercent of

essential securit ser$ices& guarding reconstruction roDects& escorting con$os t(roug((ostile areas& and defending strategic locations and indi$iduals& a#ong ot(er t(ings. H$ent(e resident of Afg(anistan& Fa#id ar7ai& is rotected a ri$ate contractor& t(e .S.fir#& "n*(e use of PMCs (as grown steadil since t(e earl 199%s. "uring t(e Kulf+ar& t(e ratio of soldiers to ri$ate securit contractors was >% to 1G toda& it is closer to 5to 1. Pri$ate #ilitar co#anies are not onl suorting a s(rin/ing .S. force in IraGt(e are also laing critical roles for ot( state and non-state actors in staili7ation& druginterdiction& and (u#anitarian oerations around t(e world.

Mercenaries (a$e long een a art of war& ut as one of t(e fastest-growing sectors in t(e

defense industr& so#e PMCs are s(edding t(eir guns for (ire; reutation for a #ore

resectale& cororate i#age. Peter +. Singer& a senior fellow at t(e roo/ings

Institution& esti#ates t(at t(e 1&%%% or so co#anies t(at define t(e industr...currentl

ra/e in E1%% illion er ear for acti$e oerations in o$er >% countries around t(e world&

and t(e industr is e?ected to doule in si7e to E2%% illion 2%1%.; Sensing t(e

usiness otential& large defense contractors (a$e een uing u so#e of t(e oldest

ri$ate fir#sMP6I& "nCor& and Jinnell Cororation are now susidiaries of B-!

Co##unications& Co#uter Sciences Cororation& and Nort(ru Kru##an& resecti$el.

Pri$ate #ilitar co#anies are increasingl art of larger conglo#erates t(at offer a

range of ser$ices fro# co#at suort to ost-conflict reconstruction and ro$ide

go$ern#ents wit( a $irtual one-sto; war-fig(ting s(o.

*(e ri$ati7ation of #ilitar oerations reflects a go$ern#ent-wide e#(asis on

ac(ie$ing greater cost-effecti$eness and efficienc in ulic institutions. *estifing

efore Congress earlier t(is ear& S Secretar of "efense "onald 6u#sfeld asserted t(at

contracting ci$ilians was freeing u additional tens of t(ousands of #ilitar ersonnel

for #ilitar resonsiilitiesresulting in an increased usale #ilitar end strengt(wit(out an increase in o$erall nu#ers.; At t(e sa#e ti#e& (owe$er& t(e go$ern#ents

reliance on PMCs (as grown faster t(an its ailit to #onitor t(e#& articularl since

t(ese fir#s largel oerate in a gra 7one eond congressional o$ersig(t& #ilitar codes

of conduct& and e$en international (u#anitarian lawcreating a (ost of legal& financial&

and olitical concerns.


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Still& it is e?actl t(ese olitical; attriutes t(at #a/e PMCs so attracti$e to

olic#a/ers. In an era of t(e all-$olunteer force& contracting can #a/e it ossile for

olic#a/ers to underla t(e costs of war. or e?a#le& Singer notes t(at PMCs in Ira


14/39

(a$e suffered #ore dead and inDured t(an all non-.S. coalition forces co#ined. Firing

contractors can also gi$e decision-#a/ers t(e olitical reat(ing roo# to suort #ilitar

oerations in resonse to national securit interests t(at enDo little ulic suort. or

e?a#le& in 1998& Nigerian eace/eeers were sent to reinforce Sierra Beonean troos

fig(ting 6e$olutionar nited ront


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Selecti#e %ngage!ent

Since t(e end of t(e Cold +ar& de#ocrac ro#otion (as gained road accetance as a

foreign olic goal. "e#ocrac assistance is a relati$el new (eno#enon t(at ticall

includes (eling to de$elo t(e for#al olitical institutions of de#ocracG assisting t(e

rearation& conduct& and #onitoring of electionsG and strengt(ening indeendent

organi7ations in ci$il societ. or decades& t(e nited States (as funded its own official

rogra#s and organi7ations & t(e crucial Israeli leiscites in 1994 and 1999& in w(ic(

enDa#in Netana(u and H(ud ara/ were t(e resecti$e winners& t(e election of long-

ti#e dissident i# "ae ung in Sout( orea in 1995& t(e end of eig(t decades of P6I

rule in Me?ico in 2%%%& *on lairs successful efforts in ritain& t(e unsuccessful

ca#aigns to unseat 6oert Mugae in i#awe in 2%%2 and 2%%>& and e$en t(e defeat

of Hduard S(e$ardnad7e in Keorgia in 2%%). In fact& al#ost 4% ercent of .S. olitical

consulting fir#s reort wor/ing o$erseas.


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*(eir influence stretc(es eond ca#aigns. Consultants wit( cororate e?erience (a$e

s(own candidates and de#ocrac #o$e#ents (ow to adat cororate #ar/eting

aroac(es for olitical ends. *(e Lugosla$ student #o$e#ent ,tor;


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to foreign olic ends. *(e ca#aign t(at ulti#atel ousted Sloodan Milose$ic fro#

ower in 2%%% was a dra#atic e?a#le of (ow t(e .S. go$ern#ent can effecti$el wor/

wit( ri$ate olitical consultants to ad$ance secific olic oDecti$es. +as(ingtons aid

ac/age to (el Serias de#ocrats included funds to (ire leading .S. ollsters and

olitical consultants. *(e nited States also funded so#e NK,s& including t(e

International 6eulican Institute and t(e National "e#ocratic Institute& w(ic( organi7ed

Joter education and olitical training for acti$ists& citi7ens& students& and t(e #edia. *o e

sure& it was t(e courage of t(e Serian oosition& and of $oters w(o endured $iolence

and inti#idation& t(at roug(t Milose$ic down. ut olitical consultants ro$ided t(e

strategic insig(ts and olling data t(at c(anged t(e course of t(e oositions flagging

ca#aign and ga$e Serians a true olitical alternati$e.

*(e lesson for .S. olic#a/ers fro# t(e Serian e?erience was clear: defeating

dictators at t(e allot o? can often ro$e c(eaer t(an tring to defeat t(e# #ilitaril.

Fowe$er& so#e tec(niues ro#oted olitical consultants (a$e #ore to do wit(

enforcing si#le resect for t(e will of eole t(an wit( us(ing a articular de#ocratic

#odel. H?it olls are ut one e?a#le. H?it olling conducted consultants in t(e 2%%%

Serian election ca#aign laed a critical role in /eeing t(e election (onest. +it(

correct olling infor#ation lea/ed to t(e #edia earl on Hlection "a& it eca#e #uc(

(arder for t(e go$erning cliue to orc(estrate $oter fraud. oreign go$ern#ents and

international organi7ations (a$e reeatedl used t(is tec(niue to counter electoral t(eft&

relicating it wit( si#ilarl ositi$e results in Me?ico


18/39


Circu!#enting the State

Microsoft founder ill Kates& w(ose ersonal illions were turning t(e gloal (ealt(

co##unit on its (ead. e?lained t(at (is co##it#ent to gloal (ealt( egan after (e

learned t(at diseases t(at (ad largel een eradicated fro# t(e de$eloed world

tuerculosis& #alaria& di(t(eria& #easleswere still /illing #illions in t(e de$eloing

world. Jaccines e?isted& ut t(e funds to u t(e# and t(e olitical will to distriute

t(e# were lac/ing. Moreo$er& t(ere was no #ar/et incenti$e t(at would entice

(ar#aceutical fir#s to ste forward. Millions were ding w(ile life-sa$ing $accines sat

on t(e s(el$es unused. Kates& a#ong t(e worlds wealt(iest #en& decided to ut (is $ast

ersonal fortune to wor/ to address an issue t(at states were unale to full address on

t(eir own.

Hnsuring ulic (ealt( is a#ong t(e o$ious was t(at states safeguard t(eir citi7ens.

Fowe$er& t(e ease of cross-order tra$el (as (eled to transfor# (ealt( care fro# a

ulic good into a foreign olic issue. +it( eide#ics li/e #ad cow disease& SA6S& and

a$ian flu reac(ing eond orders& states are co#elled to res(uffle sending riorities.

ig(ting FIJOAI"S& articularl in t(e worlds least-de$eloed nations& (as eco#e a

.S. riorit& not si#l for (ealt( reasons& ut also ecause of t(e diseases otential for

under#ining de#ocrac and econo#ic de$elo#ent& and its criling effect on alread

#eager national udgets.

Hntities li/e t(e +orld Fealt( ,rgani7ation


19/39

*(at ri$ate funds can so#eti#es o$er#atc( ulic resources is not new. +(at is new is

t(at indi$iduals are organi7ing to raise t(e rofile of issues far down t(e list of state

riorities. or instance& in anuar 2%%> t(e Kates oundation ledged E1% #illion to

de$elo a $accine t(at would eradicate t(e last oc/ets of olio fro# t(e gloe. *(e

ledge re$i$ed a +F, #ission t(at states (ad largel left unfunded.

ill Kates is not onl gi$ing #one& (e is also (eling go$ern#ents le$erage t(eir

resources to ta into t(e ower of t(e gloal caital #ar/ets. In 2%%%& (e ut u E5>%

#illion to /ic/ off t(e Kloal Alliance for $accines and I##uni7ation % er talet& Mecti7an


20/39

As states find t(e#sel$es c(allenged t(e scoe of transnational role#s& cororations

are steing in to contriute resources. +(ile t(e are #oti$ated self-interest as well

as altruis#& it is clear t(at t(e are often freer t(an states to craft inno$ati$e aroac(es to

gloal role#s. *(e ailit of MNCs to wor/ outside t(e state aaratus and foster

conditions for c(ange can e a tre#endous asset to resource-li#ited states. *(e c(allenge

for states is to ensure t(e #aintenance and continuation of ulic-ri$ate collaorations

t(at enefit t(e ulic w(en so#e of t(eir artners #a e #ore accountale to

s(are(olders t(an to t(ose in need.

The Test Ahead

*(e e?a#les cited ao$e (ig(lig(t t(e readt( and influence of non-state actors onforeign olic. Across t(e gloe& NSAsOMNCs are funda#entall c(anging state-to-state

relations. *(eir ailit to do so is a result of t(e delierate and unintended wea/ening of

state ower in an international sste# uffeted tec(nological and olitical c(ange.

In t(is new world& indi$iduals and organi7ations can use co##unications tec(nolog to

create owerful transnational networ/s& gloal co##erce and in$est#ent tru#s t(e

fiscal and #onetar le$ers of t(e ast& and t(e re#o$al of trade arriers is #a/ing it

(arder for nations to rotect do#estic industries. *(e c(allenge of adatation alies to

non-state actors as well. *(e are oerating in a $irtuall unregulated olitical $acuu# in

w(ic( t(e constraints on t(eir e(a$ior are increasingl inadeuate for coing wit( t(e

c(allenge t(e ose to e?isting gloal nor#s.


21/39

ut t(e greater urden is on states& w(ic( continue to lag in adDusting to t(e new NSArealit. *(is is scarcel surrisingt(e doctrine of so$ereign i##unit (as long ser$edas t(e asis of legiti#ac. It would e fool(ard to e?ect states willingl to surrender t(eower and influence conferred t(e rincile. Fowe$er& t(e influence of non-stateactors is onl going to intensif& and finding t(e roer alance etween t(e

resonsiilities and accountailit of ulic and ri$ate actors #a well eco#e t(efore#ost olic c(allenge of t(e twent-first centur.MNCs and WT(

Multinational co#anies (a$e an undue influence o$er t(e #a/ing of gloal trade rules at

t(e +orld *rade ,rgani7ation &%%% loists are ased in russels @ roug(l one for e$er #e#er of staff at

t(e Huroean Co##ission %

#illion and 1 illion.

In the *S

Around 15&%%% loists wor/ in +as(ington "C& outnu#ering law#a/ers in S

Congress aout !% to one

Nearl (alf of all S legislators w(o go into t(e ri$ate sector w(en t(e lea$e CongressDoin t(e loing industr

Cororations and lo grous sent nearl E1! illion influencing S Congress and

federal officials fro# 1998 to 2%%) @ eui$alent to t(e co#ined econo#ic outut of

Ca#odia and Ht(ioia in 2%%)

*(e (ar#aceutical industr sent o$er E1 illion loing in t(e S in 2%%) alone.


22/39

The %* and *S"s cor&orate trade agenda

*(e H and t(e S are (o#e to 8%R of t(e worlds iggest #ultinational cororations.

*(e are also t(e worlds do#inant trade owers& and (a$e a ulicl stated co##it#ent

to ro#ote t(eir co##ercial interests oening u #ar/ets in de$eloing countries

t(roug( t(e +*,.

*(e H and S continue to clai# t(e are acting in t(e interests of oor countries in t(e

current 0de$elo#ent round of trade negotiations& due to conclude t(is ear. ut t(e

outco#e of last "ece#ers +*, su##it in Fong ong s(ows t(e realit is $er

different.

offering s#all cuts in agricultural e?ort susidies in return for greatl increased

access to t(e de$eloing countries #ar/ets for ser$ices and #anufactured goods& t(e H

and S are aggressi$el ursuing a self-interested agenda on e(alf of t(eir #ultinational

co#anies. *(is t(reatens to under#ine oor eoles rig(ts and outlaw t(e trade olicies

t(at de$eloing countries need to uild t(ri$ing econo#ies.

1= +i#en &ri#ileged access to WT( &olic,!a-ers that is denied to &oor &eo&leand &ublic interest grou&s

In the %*

*(e Huroean Ser$ices oru#


23/39

In the *S

usiness loists reresenting cororations suc( as Coca-Cola& Mc"onalds& Pfi7er and

+al-Mart do#inate t(e S *rade Polic Ad$isor Co##ittees& gi$ing #ultinationals a

free rein to influence t(e de$elo#ent of t(e Ss +*, negotiating ositions in

+as(ington "C.

A total of 5)2 official e?ternal ad$isors to t(e Ss trade deart#ent (a$e access to

confidential +*, negotiating docu#ents and attend #eetings wit( S trade negotiators.

,f t(ese 5)2 ad$isers& 9!R reresent usiness lo grous and cororations including

urger ing& Falliurton and Monsanto.

At the WT("s base in +ene#a

*(e S go$ern#ent roug(t cororate loists on to its delegation at t(e +*,s ase in

Kene$a to negotiate directl wit( de$eloing countr officials during t(e run-u to t(e

+*,s Fong ong su##it in 2%%>. *(ese #eetings are #eant to ta/e lace etween

go$ern#ents onl. *(e S included t(e usiness loists in its delegation to ro#ote its

negotiating ositions on food aid and cotton susidies. *(ese olicies enefit S

agriusiness #ultinationals including Arc(er "aniels Midland and Car gill& ut often (urt

oor co##unities in de$eloing countries.

2= /a#ing undue influence o#er WT( &olicies that has da!aging i!&acts on

&oor co!!unities

WT( negotiations on ser#ices

*(e HC adoted /e de#ands #ade cororate ressure grou t(e Huroean Ser$ices

oru#


24/39

education. Pre$ious eisodes of lieralisation in t(ese sectors (a$e restricted oor

eoles access to t(ese essentials.

WT( negotiations on intellectual &ro&ert

Senior officials fro# Pfi7er& t(e worlds largest drug co#an& negotiated directl wit(

t(e director-general of t(e +*, and officials fro# +*, #e#er states in 2%%! to loc/

a roosal fro# de$eloing countries t(at would allow t(e# to i#ort c(eaer coies of

atented drugs during ulic (ealt( e#ergencies& including t(e FIJ and AI"S ande#ic.

Alt(oug( t(e agree#ent reac(ed allows countries in t(eor to i#ort coies of drugs

during (ealt( crises& relentless and so#eti#es aggressi$e loing t(e drug

#ultinationals (eled ensure t(e rocess @ /nown as 0co#ulsor licensing @ is so

restricti$e and co#le? t(at to date no de$eloing countr (as successfull used it.

*(e drug lo also (eled to #a/e sure t(e +*,s agree#ent on intellectual roert

#eans /e countries t(at are ale to #anufacture c(eaer coies of atented #edicines @

including ra7il& India and *(ailand @ are onl er#itted to do so under co#ulsor

license. *(is is in site of t(e fact t(at large nu#ers of eole in oor countries suffering

wit( conditions suc( as FIJ and AI"S rel on c(eaer drugs fro# t(ese countries for

treat#ent.

!= Setting u& global networ-s of influence to sha&e countries" WT( &ositions

and national trade &olicies

+lobal networ-s 0 the 1u!2 3rands alliance

Lu#Q rands& a grou of #ultinational fast food c(ains including C& Pi77a Fut and

*aco ell& (as (eled set u new gloal loing networ/s to influence t(e +*,s

agriculture tal/s. It for#ed t(e S ood *rade Alliance in 2%%>& w(ose #e#ers includet(e food #ultinationals urger ing& "o#inos& "un/in "onuts& Mc"onalds and

Staruc/s.

Lu#Q rands cororate coalition (eads t(e Kloal Alliance for Bierali7ed *rade in ood

and Agriculture& w(ic( is #ade u of food industr lo grous fro# 1> countries


25/39

including Australia& ra7il& Canada and aan. *(e Kloal Alliances #e#ers are

us(ing go$ern#ents to rice oen agricultural #ar/ets t(roug( t(e +*,& including in

de$eloing countries.

Influencing national laws 0 India"s new &atent act

P(6MA& a S drug industr grou w(ose #e#ers include Pfi7er and Merc/& waged a

co#re(ensi$e loing ca#aign in India t(at (eled us( t(roug( a new +*,-

co#liant atent law in 2%%>. "rug industr reresentati$es loied t(e Indian ri#e

#inisters office and used t(eir eas access to go$ern#ent officials to ut ressure on t(e

Indian go$ern#ent to ring in t(e new law. Ca#aigners fear it will den AI"Streat#entto u to !>%&%%% eole w(o deend on low-cost Indian drugs worldwide.

)= 4unding thin-,tan-s and front grou&s that ad#ocate trade &olicies har!ful

to &oor co!!unities

A large nu#er of (ardliner ro-usiness t(in/-tan/s (a$e grown raidl in t(e H

recentl. Analsts elie$e donations funneled fro# cororate ac/ers are a #aDor factor

e(ind t(eir e?ansion. Institutes suc( as t(e Center for a New Huroe& t(e Hd#und

ur/e oundation and t(e International Polic Networ/ ro#ote olicies t(at enefit a

narrow set of cororate interests& including stronger intellectual roert rotection for

t(e #ultinationals atented drugs in de$eloing countries.

Al#ost all of t(e radicall ro-usiness t(in/-tan/s t(at were as/ed to disclose t(eir

funding sources in a recent sur$e failed to do so. Fowe$er& recent in$estigations re$eal

Pfi7er ga$e E)5%&%%% to t(e Hd#und ur/e oundation etween 2%%1 and 2%%) on

condition t(at it would ro#ote ri$ate (ealt(care olicies.


26/39

A!erican 4oreign Polic and Multinational Cor&orations

According to effre Karten& for#er dean of t(e Lale Sc(ool of Manage#ent& *(e #ost

i#ortant and enduring relations(is etween t(e nited States and ot(er countries areoften ased on t(e trade and in$est#ent of A#erican usinesses. *oda& .S fir#s (a$e a

significant resence in $irtuall e$er large countr. *(e ad$ise foreign go$ern#ents.

*(e are transmission belts for American culture and values . Indeed& .S. usinesses

often surass t(e influence of A#erican e#assies on t(e societies in w(ic( t(e (a$e

eco#e rooted.; *(e influence of #ultinational fir#s can also e seen in t(e regulator

fra#ewor/ of international econo#ics. "et-rating agencies #aintain enor#ous

influence o$er fiscal olic& ri$ate aritration ser$ices are sulanting t(e role of t(e

Dudiciar& and cororate loists (a$e (eled set new gloal rules on intellectual

roert rig(ts.

Hseciall for t(e eriod eginning at t(e end of t(e nineteent( centur and continuing

t(roug(out t(e twentiet( centur& t(ere (as een a strong correlation etween .S.

foreign econo#ic olic and .S. foreign olic. Si#l stated& (istorians and ot(ers

(a$e s(own& rat(er con$incingl& t(at econo#ic e?ansiont(e searc( for foreign

#ar/ets for .S. surlus agricultural and industrial roduction(as laed a /e role in

A#erican foreign olic& articularl after President +oodrow +ilson


27/39

A dra#atic increase in t(e seed of stea#s(is ling t(e oceans etween A#erican and

world orts& t(e co#letion in 1844 of t(e first transatlantic cale& t(e need or desire on

t(e art of A#erican usiness leaders to see/ out new #ar/ets for increased .S.

industrial and agricultural roduction& and t(e need also to (a$e reliale sources of raw

#aterials and nati$e agriculture& suc( as ananas fro# Central A#erica& were onl so#e

of t(e sul-side forces dri$ing .S. econo#ic e?ansion o$erseas after t(e Ci$il +ar.

,n t(e de#and side were t(e attraction aroad of new .S. industrial outut and t(e

i#ortance of (a$ing a trained sales force ale to e?lain and ser$ice t(e (ig(l

so(isticated tec(nolog t(at A#erican #anufacturer were roducing.

After t(e war +as(ington assed two #easures designed to strengt(en t(e nation's

osition in foreign trade& eseciall in Batin A#erica. *(e first of t(ese was t(e +e-

Po#erene Act


28/39

Can Indian brands !a-e 53rand India" global?

ollwood& angalore& I* and I*HS& 6ana?& Infoss& Fero Fonda& all are Indian

rands wit( international resence. *(e seg#ent does not #atterG its t(e India rand t(atsee#s to e catc(ing on. ,r is it3 +it( leading industr laers li/e Mu/es( A#ani&

u#ar Mangla# irla and #an ot(ers esousing t(e notion of rand India; and Indian

gloal rands lea$ing footrints across seg#ents sanning ser$ices& #anufacturing&

culture and /nowledge& consensus is t(at ti#e (as ne$er een #ore rig(t for Indian

rands to deut on a gloal stage. Can Indian co#anies ta/e on t(e c(allenge to uild

rands t(at scale u to gloal e#inence3 C(arles erle enarius&grou CH,& Carat India

sas& +e do not (a$e a culture of creating rands...It is si#l a case of lac/ of

i#agination and a#ition.; Lears of closed econo# led to inefficiencies and a lac/ of

rand uilding #indset& (e sas. Sandee Koal&CH,& "entsu India& co#ares t(e Indian

gloal id to t(at of aanese co#anies: er(as t(e #ost i#ortant ingredient in t(e

success of aanese co#anies was t(eir ailit to t(in/ gloal and create entities and

rands t(at could scale u to gloal si7e.; Fistoricall& t(e #ade in India; rand (as

een associated wit( oor ualit and inefficienc. Strategic use of t(e countr of origin

is an enaler. or instance& rands out of Ital are instantl identified wit( art and design

#a/ing it #uc( easier for a ulgari or Ar#ani to gain gloal accetance as international

stle c7ars. Alternati$el& as Professor B" Mago& II* oints out C(inas low cost& low

ualit i#age (as #ade it difficult for C(inese rands to gain gloal accetance as eing

(ig( ualit& (ig( tec(nolog rands. +(en& for instance& (e went to Malasia *J sets

wit( t(e sa#e attriutes and ualit and wit( t(e sa#e rand na#e sold at $astl different

rices of E 2!> and E>25. *(e c(eaer one (ad een asse#led in C(ina& w(ile t(e ot(er

(ad een asse#led in Malasia itself. *(e i#age of t(e Indian (ar#a industr aroad

was not $er good at t(e ti#e we started our e?ansion&; "S rar& CH, and M"&

6ana? (as said. Fe (ad a toug( ti#e con$incing foreign co#anies to do usiness wit(

an Indian co#an. Fe recalls (ow a CH, of a gloal (ar#a co#an /et (i# waiting

for o$er 4 (ours efore granting an audience. *(at was largel (ow gloal co#anies

treated rands fro# India t(ose das. *oda& (owe$er& w(en "eea/ aoor& e?ecuti$e

director& P+C attended t(e international #eet for e#loees& t(e officiall allocated ti#e


29/39

of 5 #inutes for a TUA session e?tended to o$er !> #inutes till aucit of ti#e and

waiting resenters forced organisers to as/ t(ose as/ing uestions to call it a da.

ortunatel& Indian rands li/e Fero Fonda& aDaD and *ata (a$e started gaining

accetance in international #ar/ets for t(eir ualit roducts. Indian ser$ice sector too

(as started transfor#ing its wor/ rofile fro# eing low ualit P,s to (ig( ualit

nowledge Process ,utsourcing


30/39

een e?orting sil$er Deweller to all #aDor international design (ouses. Fe is now setting

u (is own international sil$er Deweller rand& Hisode. Fe oints out t(at (e (as

focused on Huroean designs as a strateg to gain a foot(old in t(e Huroean #ar/ets.

air and Bo$el& too& t(at #ar/ets itself as "ar/ and Bo$el in African countries

according to t(e sensiilities of its target audience in Africa. Mr enarius gi$es t(e

e?a#le of orean rand BK and Sa#sung as ointers to custo#er focus: BK and

Sa#sung& adated to t(e needs of t(e Indian custo#er to e#erge as #ar/et leaders. *(e

(a$e eaten t(e do#estic Indian co#anies li/e ,nida and Jideocon& once #ar/et

leaders& in t(eir own #ar/ets.; Tualit is an issue as well. SC Se(gal& M"& ,7one

Aur$edic& w(ose No#ar/s rand is sold in !% countries& oints out: t(e custo#ers in

western countries are #ore de#anding in ter#s of ualit. ,ne cannot get awa in

international #ar/ets ro$iding sustandard roducts.; Indias internal en$iron#ent

$i7 a $i7& infrastructure& regulations and et(ical ractices are also i#edi#ents to #a/ing

our rand gloal. *a/e t(e case of out I* cit rand& anglore& or tra$el rand& Incredile

India. ot( are struggling due to oor ualit of infrastructure in India. Most tra$elers to

anglore co#lain of t(e ti#e consu#ed in tra$elling $ia t(e cits congested road

networ/. *ourists& too arri$e to find infrastructure t(at ta/es t(e credile out of

incredile;. *(e recent Mu#ai deacle& oor roads networ/& lac/ of ower facilities all

dilute t(e rand India; e?erience. 6ecent incidents li/e data t(eft fro# Indian call

centers significantl affect t(e et(ical standoint of t(e countr. *(oug( Nassco#& PM

inter$entions on ti#e are a roof t(at t(e India rand (as now eco#e i#ortant for

go$ern#ent agencies to ta/e roacti$e stes& t(ese incidents oint to t(e loo(oles in t(e

countrs regulator en$iron#ent. As aoor oints out: India ran/s around 8> on t(e

#ost corrut countries in t(e world inde?. *(is internal en$iron#ent can e a sure

da#ener to Indias gloal a#itions.; +it( t(e gloal e#(asis on transarenc&

cororate sustainailit ractices after t(e +orldco# and Hnron cororate frauds& oor

Indian wor/ et(ics will also co#e under t(e scanner as India gets #ore gloal. Sas Mr.

Koal: India is indeed a rand regnant wit( otential. A ose or a Fot#ail were

roducts of an Indian #ind& aleit created and grown elsew(ere. ut we still need to ut

our #one w(ere our #out( is. India is definitel on t(e #o$e. +e (a$e t(e otential and

gloal ercetion (as also started falling in lace. ut do we (a$e it in us to cature t(is


31/39

oortunit and #a/e t(e world our oster3 H?ectations fro# gloal rands Consu#ers

all o$er t(e world associate gloal rands wit( t(ree c(aracteristics and e$aluate t(e# on

t(ose angles w(ile #a/ing urc(ases. Tualit signal Consu#ers watc( t(e fierce attles

transnational co#anies wage o$er ualit and are i#ressed t(e $ictors. ,ne li/e

WgloalX rands ecause t(e usuall offer #ore ualit and etter guarantees t(an ot(er

roducts.; *(at ercetion often ser$es as a rationale for gloal rands to c(arge

re#iu#s. Kloal rands are e?ensi$e& ut t(e rice is reasonale w(en ou t(in/ of

ualit&; sa consu#ers. Consu#ers also elie$e gloal co#anies co#ete

de$eloing new roducts and rea/t(roug( tec(nologies faster t(an ri$als. Kloal #t(

Consu#ers loo/ to gloal rands as s#ols of cultural ideals. *(e use rands to create

an i#agined gloal identit t(at t(e s(are wit( li/e-#inded eole. *ransnational

co#anies t(erefore co#ete not onl to offer t(e (ig(est $alue roducts ut also to

deli$er cultural #t(s wit( gloal aeal. Kloal rands #a/e us feel li/e citi7ens of t(e

world. *(e so#e(ow gi$e us an identit&; sa consu#ers. Kloal rands #a/e ou feel

art of so#et(ing igger and gi$e ou a sense of elonging&; Bocal rands s(ow w(at we

areG gloal rands s(ow w(at we want to e&; were so#e ot(er $iews.; Mt(s are now

sun $irtuall all gloal rands& in industries as di$erse as I* and oil. Social

resonsiilit Peole recognise gloal co#anies wield e?traordinar influence& ot(

ositi$e and negati$e& on societs well eing. *(e e?ect t(e# to address social

role#s lin/ed to w(at t(e sell and (ow t(e conduct usiness. Consu#ers $ote wit(

t(eir c(ec/oo/s if t(e feel t(at t(ese co#anies are not acting sociall resonsile. I

still (a$ent forgi$en S(ell for w(at t(e WdidX wit( t(at oil rig& sas a consu#er. +(ile

consu#ers dont de#and t(at local co#anies tac/le gloal war#ing& ut t(e e?ect

giants li/e P and S(ell to do so. Peole #a turn a lind ee w(en local co#anies ta/e

ad$antage of e#loees& ut t(e wont stand for transnational laers li/e Ni/e and

Polo adoting si#ilar ractices.


32/39

C(6P(6AT% S(CIA) 6%SP(NSI3I)IT17CS68

+e li$e in an age in w(ic( co#anies eui$alent in wealt( to countries call t(e s(ots and

control #uc( of t(e eart('s resources. ecause cororate inter$ene in so #an areas of

social life& t(e #ust e resonsile towards societ and t(e en$iron#ent. In India as in

t(e rest of t(e world t(ere is a growing realisation t(at caital #ar/ets and cororations

are& after all& created societ and #ust t(erefore ser$e it& not #erel rofit fro# it. And

t(at consu#ers and citi7ens ca#aign can #a/e all t(e difference

P%6SP%CTI9%S (N CS6

,n t(e one (and gloalisation and lieralisation (a$e ro$ided a great oortunit for

cororations to e gloall co#etiti$e e?anding t(eir roduction-ase and #ar/et

s(are. ,n t(e ot(er (and& t(e sa#e situation oses a great c(allenge to t(e sustainailit

and $iailit of suc( #ega-usinesses& articularl in t(e conte?t of t(e e#erging

discontent against #ultinational cororations in different arts of t(e world. Baourers&

#arginalised consu#ers& en$iron#ental acti$ists and social acti$ists (a$e rotested

against t(e unrecedented redo#inance of #ultinational cororations. *(e ongoing

re$olution in co##unication tec(nolog and t(e effecti$eness of /nowledge-ased

econo#ies (as created a new #odel of usiness and cororate go$ernance. A growing

awareness aout t(e need for ecological sustainailit and t(e New Hcono# fra#ewor/&

wit( an unrecedented stress on co##unication and i#age #erc(andising& (a$e a$ed

t(e wa for a new generation of usiness leaders concerned aout t(e resonses of t(e

co##unit and t(e sustainailit of t(e en$iron#ent. It is in t(is conte?t t(at t(e new

trends in cororate social resonsiilit


33/39

disad$antaged co##unities. *(e e#erging ersecti$e on cororate social resonsiilit

focuses on resonsiilit towards sta/e(olders


34/39

#ultile societal interests& t(e State (as een #ini#ised into an aritrator of ris/ and

interest& ri#aril dri$en #ar/et forces. It (as een ointed out t(at t(e triu#( of

econo#ic gloalisation (as insired a wa$e of tec(no-sa$$ in$estigati$e acti$ists w(o

are as gloall #inded as t(e cororations t(e trac/. *(is owerful for# of acti$is#

reac(es well eond traditional trade unions.


35/39

resistance egan ta/ing s(ae in t(e western world in t(e #id-'9%s& it see#ed to e an

acti$it reciitated a grou of rotectionists. ut& as connections (a$e for#ed across

national lines& a different agenda (as ta/en (old& one t(at #a/es use of t(e

co##unication networ/ing and gloal reac(- out. As a result of t(e successful ca#aigns

and t(e e$er-increasing solidarit etween t(e #edia and international ad$ocac and

ca#aign grous t(roug(out t(e world& c(anges (a$e een felt in cororate attitude&

allowing social resonsiilit to e directed towards non-traditional sta/e(olders. *(ese

new attitudes (a$e een induced Dointl ca#aigns& w(ic( ulicised t(e need for

suorti$e social action& and t(e #edia& w(ic( insired t(ese ositions and generated

consu#er awareness. *(us ca#aigning& t(e #edia and consu#ers for#ed a artners(i

t(at led to t(e introduction of en$iron#ental rotection as art of t(e factors t(at

deter#ine co#an success. More recentl& ot(er cororate ele#ents of social

resonsiilit& suc( as laour ractices -- and& #ore secificall& c(ild laour --

underwent si#ilar rocesses.

Conclusion


36/39

Concerns about !ultinational cor&orations

+(ile no one douts t(e econo#ic success and er$asi$eness of #ultinational

cororations& t(eir #oti$es and actions (a$e een called into uestion social welfare&

en$iron#ental rotection& and laor organi7ations and go$ern#ent agencies worldwide.

National and international laor unions (a$e e?ressed concern t(at #ultinational

cororations in econo#icall de$eloed countries can a$oid laor negotiations si#l

#o$ing t(eir Dos to de$eloing countries w(ere laor costs are #ar/edl less. Baor

organi7ations in de$eloing countries face t(e con$erse of t(e sa#e role#& as t(e are

usuall oliged to negotiate wit( t(e national susidiar of t(e #ultinational cororation

in t(eir countr& w(ic( is usuall willing to negotiate contract ter#s onl on t(e asis of

do#estic wage standards& w(ic( #a e well elow t(ose in t(e arent co#an's

countr.


37/39

The future for !ultinational cor&orations

Current trends in t(e international #ar/etlace fa$or t(e continued de$elo#ent of

#ultinational cororations. Countries worldwide are ri$ati7ing go$ern#ent-run

industries& and t(e de$elo#ent of regional trading artners(is suc( as t(e Nort(

A#erican ree *rade Agree#ent


38/39

It (as (ad onl #oderate success& (owe$er& ecause it lac/s Dudicial aut(orit& so#et(ing

t(e .S. negotiators refused to gi$e it ecause of congressional reser$ations aout

granting e?tensi$e owers to t(e new od.

In t(e late 198%s& free traders in Huroe Doined wit( Huroean wor/ers in successfull

oosing t(e roosed #erger of Fonewell International and Keneral Hlectric on

antitrust grounds. *(e nited States and t(e Huroean nion also entered in a trade war.

*(e clas(ed o$er Huroean restrictions on i#orts of A#erican eef and ananas& and

t(e .S. steel industr accused Huroean fir#s of du#ing steel on A#erican #ar/ets.

Huroean usiness and olitical leaders retaliated wit( c(arges t(at +as(ington unfairl

susidi7ed .S. e?orts and reDected its efforts to resol$e trade disutes.*(ese clai#s and

counterclai#s suggest t(at& in a world eco#ing s#aller eac( da& wit( cororate

#ergers across national oundaries eco#ing #ore co##on and a tec(nological and

infor#ation re$olution unli/e an in t(e ast& calls will continue to grow aout ringing

t(e asirations of ri$ate enterrise #ore in line wit( national needs. Fow t(at will

(aen or w(et(er it is e$en ossile re#ain unanswered uestions. *(e failure of t(e

nited States and Huroe to resol$e t(eir econo#ic differences and a growing #o$e#ent

toward econo#ic regionalis# in Hast Asia& including #utual currenc suorts&

cooerati$e e?c(ange sste#s& and an Hast Asian free trade area& e$en suggest aworldwide ac/las( alread under wa against econo#ic gloali7ation. At t(e sa#e ti#e&

it is difficult to i#agine ant(ing less t(an a (ig(l integrated world econo# or one

wit(out t(e glue of t(e #ultinational cororations t(at (eled ring it aout in t(e first

lace.


39/39

3I3)I(+6AP/1

(tt:OOwww.#t(olo/e.eduOacadOintrelO#nc.(t#

(tt:OOwww1.u#n.eduO(u#anrtsOlin/sOusiness.(t#l

(tt:OOwww.un.org (tt:OOwww.unctad.orgO

(tt:OOwww.foundation.no$artis.co#O#ultinationalYcororationsYcorrution.(t#

www.ief.org
http://www.mtholyoke.edu/acad/intrel/mnc.htmhttp://www1.umn.edu/humanrts/links/business.htmlhttp://www.un.org/http://www.unctad.org/http://www.foundation.novartis.com/multinational_corporations_corruption.htmhttp://www.ibef.org/http://www1.umn.edu/humanrts/links/business.htmlhttp://www.un.org/http://www.unctad.org/http://www.foundation.novartis.com/multinational_corporations_corruption.htmhttp://www.ibef.org/http://www.mtholyoke.edu/acad/intrel/mnc.htm

7116452 Role of MNCs in Shaping Internatinal Relationsgg

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