Trade and Investment Issues in the New Millennium Round
- New Horizons in International Business series
Edited by Alan M. Rugman and Gavin Boyd
Thomas L. Brewer and Stephen Young ABSTRACT The industry structure of the US economy and the international strategies of ﬁrms are key elements of the political economy of US trade policymaking. A principal feature of the US economy is the increasing dominance of the services sector and the declining importance of the agricultural, mining and manufacturing sectors. A principal feature of ﬁrms’ strategies is their increased reliance on international ownership and movement of factors of production through foreign direct investment (FDI). These structural and strategic tendencies, furthermore, interact and thus shape the policy agenda and the central tendencies of US policy. This chapter analyses these structural and strategic trends and their relationships to US policies concerning three types of World Trade Organization (WTO) issues: meta-institutional issues, sector-speciﬁc agreements, and dispute settlement cases. The analysis emphasizes the importance of the General Agreement on Trade in Services (GATS), including its provisions concerning FDI. INTRODUCTION United States policies on WTO-related issues are shaped by a combination of economic and political conditions. The economic conditions of particular importance include: (1) the structure of the US economy, in which services have become relatively more important; and (2) the international business strategies of ﬁrms, which have come to rely more on foreign direct investment, relative to cross-border trade. Both of these changes have signiﬁcantly altered the economic interests that business groups promote in the policymaking process, and they also therefore affect the agenda and other key features of the politics of speciﬁc issues....
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