LAW, REGULATION AND INTERNATIONAL BUSINESS

Cbde D. Stoltenberg*

It has been a decade since the ABLJ’s first special issue on legal issues affecting international business. That issue featured articles on international environmental protection and the GATT, product liability and data protection in the European Community, the gray market, and some implications of the free trade/fair trade debate. Events of the past decade have confirmed in some respects that the more things change, the more they remain the same. The issues addressed ten years ago are still with us.

The GATT/environment article’ focused on the tuna/dolphin controversy, and fishing-related issues were highlighted in recent testimony by an assistant secretary of state before the Senate Commerce Committee that “illegal, unreported and unregulated (IUU) ocean fishing has become an increasingly important

* Professor of Business Law & Director of International Business Programs and East

‘ Don Mayer & David Hoch, International Eniironmmtnl Protect7on and the G A T E ‘The ,Asian Business Studies, University of Texas-San Antonio.

Tuna/Dolp/2m Controuery, 3 1 A h l . BLb. L.J. 187-244 (1993).

446 / Vol. 40 / American Business Lnw Journal

international challenge.”2 While noting that “the past decade has witnessed a \witable explosion of new agreements and standards for the conservation and management of fisheries ~orldwide,”‘~ the assistant sccrctary concluded that “our challenge now is to ensure effective implementation of the full range ofthese instruments.”’ The close relationship between collapse of civilizations and “destruction of the einironmental resources on which they depended,” coupled with the fact that “a society’s demise may begin only a decade or two after it reaches its peak population, wealth, and power,”:’ demonstrates the importance of international environmental issues and their regulation.

\,Vhile many of the implications projected for U.S. business in the first issue’s articles on product liability” and data protection’ in the European Community have now been absorbed, the European Union has assumed an even more prominent role in our consciousness. Mainly associated with a common market in the post- M’orld \\yar I1 period, Europe has spent the past year and a half drafting its first constitution, article one of which states, “Every national of a member state shall be a citizen of the union.”‘ As the ECT expands eastward, this will mean “a mega-Europe of450 million citizens, larger than any population mass except for China and India,

2003 / Law and IB / 447

and an economy of more than $9 trillion, close to that of the United States.”’

Despite recent differences over Iraq and other issues, senior Bush administration officials on the eve of a recent US.-European Summit emphasized “a convergence of European and American thinking about the nature of security threats in the 2 1 st century and the nature of a combined, transatlantic US.-European response.”’” Whatever accommodation may be achieved relative to security issues, considerable tension remains in the area of agricultural trade. Having missed a March 3 1,2003 deadline for agreeing on modalities in the WTO agricultural trade negotiation,’ ’ USTR Zoellick in testimony before the House Agriculture Committee characterized reform of the EU’s Common Agricultural Policy farm subsidies program as “critical to successful negotiations in the World Trade Organization.””

Perhaps the most visible trade dispute currently between the United States and the European Union is that involving biotech products. The United States filed a suit at the WTO in May 2003 alleging that “the EU moratorium on approvals of new biotech products for planting or import violates the WTO agreement on sanitary and phytosanitary measures, which requires ‘sufficient scientific evidence’ for regulations aimed at protecting human health

‘ I Id. ‘ ‘ I Background Briefing by U.S. Officials on June 25 U.S.-EU Summit (June 23,2003),

nr1nikzble at http://lists.state.gov/SCRIPTS/WA-~JSIAINFO.EXE?,42~indO3O6d&L~WF- EASIA&P=R5278. For a more sober assessment, see William Anthony Hay, A Preliminay Reckoning Prospects f o r G.S. -European Relntions Ajer Iraq (April 2003), arnilnble at http:/ /www.fpri.org/ww/040 1.200304.hay.useuropepostiraq.html.

” Joint Statement by U.S. Trade Representative Robert Zoellick and Secretary of Agriculture Ann Veneman (March 3 1, 2003), ar~aikzble at http://lists.state.gov/ SCRIPTS/WA4 -USIAINFO.EXE?il2=ind0303e&L= WF-EASIA&P=R4090. ’’ Testimony by USTR Robert Zoellick before the House of Representatives Agriculture

Committee (May 2 1, 2003), ar~nilable at http://lists.state.gov/SCRIPTS/W.\- ‘IJSItlINFO.EXE?A2=ind0306c&L=WF-E~4SIA&P=R 153 16.

448 / Vol. 40 / dmeiicnn Busirzess Lnu‘Journal

and the en\.ironment.”’ Consultations between the U S and Europe to achiel-e a resolution of the dispute have failed. I ’

In the meantime, a new global treaty, the Cartagena Protocol on Biosafeq, has been ratified and will take effect on September 11; it “allows countries to bar imports of genetically engineered seeds, microbes, animals or crops that they deem a threat to their en\ironnients.” ’ Although the United States has not ratified the treaty, American exporters to countries that are parties to the agreement will be subject to the rules-yet to be written-for carrying it out.“’ Suffice it to say, there will likely be a number of issues between the United States and Europe over which frictions will continue for the foreseeable future.

Gray market issues addressed in the first issue” also remain with us. Dispersed, global manufacturing and supply chain management are, if anything, e\.en more important now than a decade ago,’*

’ ’ Statement of L S I R Spokesman Richard hfills June 19. XKl3 I. arzilnbl~ at h t t p : / / l i s t s . s t a t e . g o v / S ( : R I P T S / \ ~ . 4 - ~ ~ S I . ~ I ~ F ~ ) . ESE:’;\2=iiid0306c&L=WF- E.\SI.4&P=Rlj3 16.

” David Ipoiiliardt. Tnlks Collnpse 011 1 -.S Efforts to Open Europ~ to Biotdi Food. N.Y. TIXIES, June 20. 1993. ax i lnhk n! Iittp://”M?v.iiytiiiies.coni/2003 /06/20/intrriiatioiial/europe/

I-, .\iitlrcw Pollack. ‘Trodi, Part 011 Gxr-Alt twd (;OOd5 to ‘Toha Fflrt iir 90 Dys. N.Y. ‘I’I\iF,S, June 14,2003. mdnbit,ot Iitt~~://~u~~.iiytimrs.com/2003 /06/ 1 -T/l~iisiness/ 13TRr\D .html.

I ” Id , ’l’he European Parliament receiitly passed tico l a ~ v s to rcplace a ban on new biotech foods \%.it11 rilles that ix.ould allobv genetically modified products i f they are labeled. EC‘Pnsses Rrtks on h h r h q Biotcdr Foods. \V.\I.I. S 1’. J.. July 3 . 2003. at .\7. However, the U.S. lias cliaractrrized the rules as ”overly burdensome to producers:” among other things, the rules “woiild raqiiirr prodiicers to trace all genrtically modified organisms at all stages of prochiction.” Id.

I ’ Paul Iaising &Josrpli Gabriella. Clar$ii.ir!g Grq.\lnrket Grq,-Ireos. 3 1 A \ l k . Bus. L.J. 3 13- 37 ,1993 .

I ” .Joan hlagretra. Fmt. Global nnd Bttrupmini~ial: .Siipp!~ Clmin ,\~onagonent. Hong Kong ;In Ivfmin;. 7i,it/1 I c t o r Fling. H:\K. EN’S. Rl:\. .. Srpt.-Oct. 1998. at 102-14. Robert

20TR.\r)E:.lltnd.

eich lias articiilared t h p implications as follo\~s: Once upon a time. products liad distinct national itlrntities. Regardless ofliow many inter-national borders they crossed. their coiiiirn of origin . . . was never in doubt. Producrs t\’eIe manufactrired in one place because economies of scale necessitated a central location. Rut. i n the emerging high-value economy, quantities can be prndiicrtl eficimtly in iiiany diffrreiit locations and coniliined in all sorts of ways to SCITC customer needs in many places \Vhat’s traded between nations is less often finislicd goods thaii sprcialized research. design. fabrication. management, marketing, advertising. consiilting. financial and legal senices. as well as components and materials.

2003 / Law andITB / 449

multiplying the concerns for U.S. licensors of intellectual property rights. Courts in different countries have gone in a variety of directions on the extent of the licensor's control over distribution of goods manufactured by a licensee.'q It has been suggested that "the parallel import issue . . . will probably be ultimately resolved in the context of the GATT."'"

Certainly, the TRIPs agreement has advanced the cause of IPK harmonization by establishing "minimum standards of intellectual property protection that must be achieved by all members of the WT0."2' TRIPs "is noteworthy in the multilateral trade context in that it obliges governments to take positive action to protect intellectual property rights."2' However, built into TRIPs is a tension between countries that are consumers and countries that are producers of IP, "with the majority of the developing countries losing and many developed countries gaining."'" The 200 1 Doha Ministerial's agreement allowing drug companies in a country the right to make low-cost generic knock-offs of medicines patented by multinational pharmaceutical corporations for domestic sale'' gives some hint of future directions, but falls far short of resolving the dilemma of parallel imports.

Finally, the free trade/fair trade tension addressed by the final piece in the first issue2' appears only slightly closer to resolution now, if at all. There is still a significant divide between the interests of developed and developing countries over many trade issues. For example, in connection with the just-mentioned Doha Ministerial declaration expanding opportunities for producing generic versions of patented pharmaceuticals, it remains the case that millions of

Robert Reich, TlieMyth Of'Made in the U S A : WA1.I. S'I'. J., July 5, 1991, at 116.

BllslNEss L n \ V ANI) 1'1's EK\ ' l I<ONhIIX'I ' 533-35 (5th cd. 2002). "' See RICHARD SCHAI

"" Id. at 534. ''I Bernard Hoekman, Senices and Intellectual Prop@ Rights, in THE Nt:\!'

G..\TT--IhlI,l,lcAI'lo.Ys FOR 1'HI.: IJNI'1'F,l) S'1'ki'Es 84, 100 (Susan M. Collins & Barry P. Bosworth eds. 1994).

K, BE\'EKI.EY EARI.E & FII . IHIIIZ' I '~ A ~ r i s n , 1

I'l' Id.

'.' Id. at 112. ? ' Celia W. Dugger, A Catcli-22 on Drugsfor the World's Poor, N.Y. T l k l F , ~ , Nov. 16, 2001,

'-' Clyde D. Stoltenberg, International Trade L n r r i and Regulation in the Context of the Free at W1.

'fi-ade/t.air Trade Debate: A R ~ ~ ~ J - E S S ~ , 3 1 Ahf. BL6. L.J. 339-64 (1993).

people live in de\.eloping countries that “do not have factories capable of producing these medicines.””’ Nor does the declaration “allow them to import such drugs from the handful of developing countries that have thriving generic drug industries . . . .”’?

More generally, a cynic could point to reccnt examples (e.g., steel tarif‘fs arid agricultural subsidies) of how the U.S. shoves free trade down the throat of every country it meets but practices protectionism itself.‘“ Regarding the controversial area of anti-dumping regulation, Professor Bhapvati has written, “Masquerading as ‘fair trade’ rules, these [anti-dumping rules] are used unfairly as protectionists’ favorite tools. 12’hile the EU is also a sinner, and the anti-dumping virus has spread far more successfully than SARS, U.S. industry and Congress are the villains with the pitchforks: They are powerful and passionate defenders of these outrageous rules.”’” The free traddfair trade debate, it is fair to say, nil1 be around for a long time.

The current special issue, like the first one, deals with a broad variety of issues along the entire spectrum of international business. In organizing the teaching of international business law, a standard text in our discipline has adopted a thematic approach “patterned after the basic market-entry strategies of most firms as they expand into foreign markets: Trade in goods and services, protection and licensing of intellectual property rights, and foreign direct

‘I’ I h g y r . . m p n note 2.4. at l V 1 .

” ’ E,?.. l’residcnt Bush‘s imposition ofsteep ne\r tariffs on >tee1 imports from Europe, East .kia and Brazil i i i response 10 domestic political pressure. \YiIliaiii Fini~egan. ’T?w Ecmiomia qfE/i,ip/r.c>

Even more hypocritical. and economicall>- painful. to dozens of‘ countries in Africa and latiii Atnerica has been tlie latest round of Lz.S. farm suhsidies, which may total a mucli as $180 billion over tlie next decade. hlost of that windfall goes directly to big ;igrit.iiltiiral corporations ‘all of them big political contrihiitorsi. These siibsidies d1Pctivcl~- close .kiierican markets to inatit poor-ra~iiitn- food prodncers [we also have tariff barriers in place. just in c‘asri. tvliile allowing I_!.S. exporters to flood foreign markets \vitli clieap food. often putting ponr-coiintq farmers out of business. (;lobal trade riilvs. as codified in the \V.T.O.’s .\griciilture .\grcrment> do allow countries to ir~alie direct payments to their farmers. But only rich countries, for olnioii, rcasoiis. have that option. This is one of the many ways that the “level playing field“ extolled by free traders does 1101 look level from the Global South.

Id.

, Yotcs ON tht, I t iuhingtoti Comwm~. H.\KPF.I(‘S. hla). 2003. at 19.

Id. at 1-9-50. Jagdicli Bhag\rati. ‘Ilk Cirrnr,n/r to Cntrmti. lV.\I . I . S’i’. J..,July 2. 2003. at .I l0.

2003 / Law and IB / 45 1

investment.”3o This approach begins with “trade, which involves the least penetration into the foreign market, and progress [es] to foreign direct investment, which immerses the firm completely in the social, cultural, and legal systems of its host country.”3’ The logic of this approach is that such a progression “also mirrors the life cycle of many firms as they mature and move more aggressively into new foreign rnarkets.”j2 This special issue of the American BusZness Law Journal explores issues along this entire spectrum, and beyond.

Trade can be looked at from at least a couple of different perspectives: transactional and regulatory. The transactional perspective focuses on how obligations between an exporter and an importer are created through contract, custom and governing law; how the goods move from exporter to importer and the risks and liabilities along the way; and the mechanisms and procedures for effectuating payment from buyer to seller.”3 Contract laws in developing countries and in socialist economies operate in a context quite different from that to which practitioners in western, developed countries are accustomed.34

The first article, by Patricia Pattison and Daniel Herron, explores the impact of the People’s Republic of China’s Uniform Contract

SCHAFFER et al., supra note 19, at xxxiii. 111

” Id. ‘ ’ Id. ii See id., chapters 4-7.

Developing countries “have long faced three related problems in their business

“They often do not have a cadre of trained professionals . . . to help their governments in contract negotiations,” which poses “a negotiating and bargaining disadvantage in dealing with experienced representatives of Western multinational corporations.” Id. at 108. They “have often found themselves in desperate need of hard currency to fund their socioeconomic development programs,” thereby reducing their “economic bargaining power. . . in carrying out contract negotiations.” Id.

3) “[Un the past many developing countries simply did not have the sophisticated legal system for dealing with contract disputes.” Id. at 109.

Despite the transitions on which many socialist countries have embarked toward more market-driven economies, “socialist principles and central economic planning remain influential in many countries.” Id.

As a result, “socialist contract law serves primarily to protect national interests, to achieve state goals for the production and distribution of goods to individuals, and to replate foreign trade contracts with outside companies.” Id.

rrelationships with the wealthier industrialized nations:” 1)

2)

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Law, enacted in 1999, from a variety of perspectives. China represents characteristics of both a rapidly developing country and a transition economy, with all that implies for the operation of contract law. “Cultural and social influences [also] affect the manner in which contracts are negotiated and drafted.”” After comparing China’s Uniform Contract Law to its western counterparts, ”’ the article explores connections between Chinese culture and business to help Western businesspeople understand the cultural foundations of Chinese business and law. Especially important to this discussion is the article’s examination of core Chinese philosophical concepts that revolve around relationships and situational specificity, rather than on task accomplishment. v

In addition to the transactional aspect of trade is the regulatory side. The big news here since the last special issue, of course, is the development of the World Trade Organization and its ongoing evolution. The GATT Uruguay Round of multilateral trade negotiations, concluded on December 15, 1993, and signed by President Clinton on April 15, 1994, has been described as the “most ambitious” of the Rounds “in terms of the breadth of issues addressed.”38 In addition to vastly expanding GATT disciplines to new areas of agriculture, services, intellectual property rights and foreign investment, it significantly strengthened the institutional framework for monitoring compliance with the agreement and resolving disputes. ”’

.Ii Id. at 112. ‘I) Both the Uniform Commercial Code and the United Nations Convention on Contracts

for the International Sale of Goods. .I i There is a significant literature on the role of relationships-gunnm’-in Chinese

organizations. While the practice ofguanvi has the capacity to further all the positive aspects of Confucian belief systems, it has also been associated with corruption. For a comprehensive analysis. see SOCIAL COSSECl‘IOSS IS CHISA: ISSl~l’l’Lrl’lOSS, CUL‘I‘LTRE, :1Z1) I‘Hl.;CH:t\‘1:IS(;N:\l‘l‘REOFGf:-l\:li‘ii~omasGold, DougGuthrie& David Wankeds., 2002 1.

” I Susan M. Collins & Barn P. Bosworth, Introduction, in THE Nt\\‘G.L\TT, supra note 2 1 , at 1.

” ’ Id. at 1-2. Professor Jackson summarized the evolution of a reasonably sophisticated process for settling GATT disputes as follows:

The original GATT treat). contained v a n little o n this: although it did specifically prokide ;in articles XXII and XXIII) for consultation, and then submittal of issues to the GrZTT contracting parties. -4s time went on, however, the practice began to evolvr more toward a “rule oriented“ system. For example, in the late 1950s the

2003 / Lute! and IB / 453

The second article, by Lawrence D. Roberts, traces WTO dispute resolution developments, finding that the process remains bedeviled by delays, problematic enforcement of decisions and inadequate promotion of GATT policy objectives. His article examines the problems that currently hinder adjudication procedures and the prospect for improving the dispute resolution process through a number of structural changes, including further emphasis on formal procedures and stringent enforcement mechanisms that establish incentives designed to conform national interests more closely to the needs of the international community as a whole.

Moving along the spectrum of a firm’s increasing involvement in foreign markets beginning with trade, foreign direct investment (“FDI”) represents the level of greatest penetration, at which the firm is immersed completely in the social, cultural and legal systems of its host country. One of the first things that an enterprise seeking to establish an entity under its control in a host country must decide is the form that FDI should take. Foreign investors are often required

practice introduced a “panel” of individuals to make determinations and findings and recommend them to the contracting parties. Before that, disputes had been considered in much broader working parties comprising representatives of governments.

In the Uruguay Round 1994 text, there is a major new area concerning dispute settlement procedures, the “Understanding on Rules and Procedures Governing the Settlement of Disputes.” The new text solves many of the issues that have plagued the GATT dispute settlement system, although not all of them. - It establishes a unified dispute settlement system for all parts ofthe

GA7T/WTO system, including the new subjects of services and intellectual property. Thus controversies over which procedure to use will not occur. It reaffirms the right of a complaining government to have a panel process initiated, preventing blocking at that stage. It ingeniously establishes a new appellate procedure that will substitute for some of the council approval process of a panel report and overcome blocking. Thus a panel report will automatically be deemed adopted by the council unless it is appealed by one of the parties to the dispute. If appealed, the dispute will go to an appellate panel. i\fter the appellate body has ruled, its report will go to the council, but in this case it will be deemed adopted unless there is a consensus against adoption, and presumably that negative consensus can be defeated by any major objector. Thus the presumption is reversed, compared with the previous procedures, and the result of the procedure is that the appellate report will in virtually every case come into force as a matter of international law.

-

-

John H.Jackson, The World Trade Organization, Dispute Settlement, and Codes of Conduct, m THI: NE\V GATT, supra note 2 1, at 69-70.

454 / Vol. 40 / American Business L,uu!Journal

to follow local rules directing that inlrestment take a particular form. In many countries, some areas of business activity deemed particularly sensitive or of strategic or national security importance are simply not open to foreign investors, or they may be limited to a minority investment, with a host country enterprise maintaining a majorit) of the equity and effective managerial control. Foreign investors are often steered toward or limited to joint venture forms of investment. The Uruguay Round's addition of TRIMs (trade related investment measures)4" and trade in senices" to the GATT repertoire pro\ides additional framework for greater harmonization of national policies arid local regulation affecting FDI over time.

The third article, by Robert Rothenberg and Tatyana Melnikova, focuses on several non-corporate forms of doing business in Russia, specifically proprietorships, partnerships and limited partnerships. Russia's approach to moving from a centrally planned economy toward greater market orientation contrasts significantly with China's transitioii, touched upon by Pattison and Herron." This article provides a detailed description, bvith respect to each of the three business forms analyzed, of the rules regulating creation of the enterprise, operating the enterprise, transferring ownership interests, and terminating the business. For comparative perspective, each of these areas is compared and contrasted with the New York state law for each business form. Accordingly, the article represents a useful case study illuminating the issues that need to be considered by foreign investors in Russia.

The fourth article, by Robert Bird, transcends the international business spectrum, running from trade on the one hand to FDI on the other, by literally going out of this world to explore the regulation of space debris. This article illustrates both the difficulties and the opportunities inherent in the development of law and reLplation in less well charted areas. Some parallels may be seen with the reLplatory framework which has been evolving over a longer period of time for that other non-boundary limited regime governing the law of the sea. The Law of the Sea Convention represented the culmination of a "long and bitter debate between developing

2003 / Law and IB / 455

countries and the developed countries" over the disposition of the resources of the sea.43 Although "the wealthier countries saw it as a measure to redistribute the wealth of nations," the treaty's advantages are numerous, clarifying such things as "the right of passage through straits, sovereignty over twelve miles off shore, and control of fishing, oil and gas rights within two hundred miles off shore."44

The article demonstrates how established international norms represented by treaties and principles of international law can be utilized to tackle the space debris problem. Alone, however, they are not enough. In addition, it is necessary to establish cooperation among nations by mobilizing political and scientific interest among experts in the field, focusing on informal sanctions and scientific contacts as bridges for cooperation and development. Just as in the case of the law of the sea, the interests of both developed and developing countries must be accommodated. The article constitutes an interesting case study in harnessing a broad spectrum of international law and policy tools to develop a comprehensive and equitable regime for environmental regulation of space debris.

As the articles in this special issue demonstrate, the issues embraced by international business law are many and complex. They are both substantive and procedural. They are imbued with tensions inherent in the competing interests of developed and developing countries. While the articles touch on only a few of the many legal and regulatory issues affecting international business, each is a thoughtful and thorough treatment of its subject.

In today's world, the downside of globalization has become ever more apparent since the heady days of the early 1990s when Kenichi Ohmae was articulating the principles of power and strategy in the interlocked economy that would give rise to a "borderless The Asian financial crisis of the late 1990s, following on the heels of the 1992-93 crisis in the European monetary system and the 1994 Mexican peso crisis,4F and the demonstrations at the 1999 WTO

SCHAFFER et al., supra note 19, at 49. 43

" Id. " Seegeneral& KENICHI OHhlAE, THE BORDERI~ESS W0RI.D: PO\.VF.K AM) ~ I ' K A ' I ' P X Y ' IS

" I See MORRIS GOI.L)SI'EIN, THE .4SIAN FINANCIAL CRISIS: C.4L1StzS, CUKES, AND

'I'HE INTERLINKED ECONOMY (1 990).

SYSI'FI11IC I.lll'l.lc~l'loKs 1 (1998).

456 / Vol. 40 / American Business LnwJournal

Seattle Ministerial and 2000 World Bank/IMF meeting” all underscored the growing anxiety over globalization. The terrorist events of September 1 1, 200 1 , subsequent wars in Afghanistan and Iraq, and continued unrest in the Middle East have coupled with a sluggish economy to create much uncertainty.

In the process, a Pew Research Center three-year study of world attitudes recently concluded that the U.S. has become “increasingly isolated in the world, compared with the findings in a 44-nation Pew survey last year.”’* Professors Prahalad and Lieberthal pointed out a few years ago how the world, and the rules ofinternational business, have been changing. Their research explains the transition from the “first wave of market entry in the 198Os,” when “MNCs operated with what might be termed an imperialist mind-set,”’” to the present time, when many MNCs “are beginning to see that the opportunity that big emerging markets represent will demand a new way of thinking.”’” Accordingly, this may not be the best time to be dictating how the world should be run under American supervision. It is not clear that the single-minded pursuit of what some have called the “Il‘ashington Consensus,” with its core tenets of “deregulation, privatization, ‘openness’ (to foreign investment, to imports),

i i y ce. e.g.. Helene Cooper. Bob Davis & Greg Hitt. C;b in Smoke: C1TOj Failure in Bid to Znuncli Trade Talks Eniboldetis Protestors. lV;\l,I.Sl.. J.. Dec. 6. 1999. at 2 1 1 ; David Sanger, Global Stonn: Loon rigoicies l i ~ d m Siege. N.Y. TI.\I1:s. .\pi-. 16. 2000. at .\I. Professor BhaLpati has warned that “as meniber governments prepare for the next WTO meeting in Cancun in September [2003], complacency is hardly called for. History could repeat itself, not as Doha but as Seattle.” Bhapa t i . niprn note 29. at -\lo.

li’ Susan Page. S7mq: ItbrldSiipForlfor L’.S. nttinr~lon; US.\ Toh\I’,June 3.2003, amilable at http:/ /~uu..usatoda~.coni/~ie~s/~asl~ington/2003-06-03-pew,u. htm.

”’ They assumed that the big emerging markets werr new markets for their old products. .Ihey foresaw a bonanza in incremental sales for their existing products or the chance to squeeze profits out of their sunset tcchnologies. Further. the corporate center was seen as the sole locus of product and process innovation. Many inidtinationals did not consciousl>. look at emerging markets as sources of technical and managerial talent for their global operations. ;\s a result of this iinparialist mind- set. iririltinationals have achieved onl!. limited success in those markets.

C.K. Prahalad ti Kenneth Lieberthal. ‘nieEt:ndojCorpomte Iinpm’altrm. HA^. BL‘s. RE\,.> July- .\iig. 1998. at 69-70,

” ’ Succes wi l l require more than simply developing greater cultural sensitivity. The more wc understand the nature of these markets, the more we believe that multinationals will have to rethink and reconfigure every element of their business models.

Id. at 70.

2003 / Law and IB / 457

unrestricted movement of capital, and lower taxes” is the best course:” A more thoughtful approach, recognizing shifting and evolving political and economic strategic realities in a less ideological way, may be what is called for. There is an old Chinese curse: “May you live in interesting times.” Teachers of international business law, and their analytical approach exemplified by the articles contained in this special issue, should not hesitate to make their contribution in today’s “interesting times.”

’’ Seegenernlb Finnegan, supra note 28.