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Tuesday, October 19, 2004

MNCs and Governments: A New Cold War Proxy Relationship 

There's an interesting parallel or analogy between Cold War geopolitics and the ascendency of corporations' relations with governments in the 21st century global trade regime. In the old days, the United States and the Soviet Union engaged in proxy wars/battles in various battleground lands including the Koreas in the 1950s, Indochina in the 1950s to 1970s, and Latin America in the 1980s.

Lately it seems a new paradigm has emerged with a similar dynamic. A slim majority of the top 100 economies of the world are multinational corporations; in general they seem to be wielding a significant degree of power in the global trade regime. Governments need to join the WTO to retain access to global trade to avoid economic marginalization. In watching the trade wars between Fuji-Kodak over market access and Airbus and Boeing over subsidization, it seems that on some levels they are doing battle through their home state governments: Japan and USA in the first case, the EU and the USA in the second case. So are nation-states the new proxy battlegrounds for corporate proxy wars?

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