European–American Trade and Financial Alliances

European–American Trade and Financial Alliances

New Horizons in International Business series

Edited by Gavin Boyd, Alan M. Rugman and Pier Carlo Padoan

In this, his final book, Gavin Boyd has brought together a distinguished group of experts on the nature and extent of transatlantic policy coordination and its implication for corporate strategy. This remarkably relevant set of papers offers a discussion on the economic and financial linkage between Europe and North America, as well as the trade and investment rules governing this interaction.

Chapter 3: Atlantic commerce

John Kirton

Subjects: business and management, international business


John Kirton INTRODUCTION To many casual observers, the United States (US)–European economic relationship, continually in a condition of intense competition, has erupted into acute conflict yet again.1 In the field of trade, the past few years have featured a succession of high-profile, bitter disputes over old practices such as subsidies, old sectors such as steel and agriculture, and newer, domestically grounded, values and ideology-based issues such as beef hormones, genetically modified organisms (GMO), biotechnology and food safety as a whole (Mills, 2004; May 2001). In the field of foreign direct investment (FDI), the 1997 French-led collapse of the Americanpioneered negotiations to create a Multilateral Agreement on Investment (MAI) at the Organisation for Economic Co-operation and Development (OECD) has been followed by European–American differences over the investment provisions in the World Trade Organization’s (WTO) Doha development agenda and by the failure to reach any formal agreement on this issue at the unsuccessful mid-term ministerial review of the round at Cancun in September 2003 (Rugman, 1999; Rugman and Verbeke, 2003). In the field of corporate competition, Cancun’s failure even to launch multilateral negotiations is equally apparent, despite the growing tendency of the European Union (EU) to block American multinational corporations (MNCs) from acquiring, as part of their global strategies, European, or even other American, firms (Boyd and Rugman, 2003). More broadly, the end of the cold war in the 1990s has removed the incentive for US–European political–strategic solidarity to ride to the rescue of economic...

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