Multinationals and NGOs amid a changing balance of power.pdf

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Multinationals and NGOs

amid a changing balance of power

STEVEN McGUIRE*

International Aairs 89: 3 (2013) 695–710© 2013 The Author(s). International Aairs © 2013 The Royal Institute o International Aairs. Published by John Wiley & SonsLt, 9600 Garsngtn Ra, Or ox4 2dq, UK an 350 Man Street, Malen, MA 02148, USA.

Cntemprary ebates abut nternatnal ecnmc gvernance cnrntsmethng a puzzle. In ne sense, glbal ecnmc gvernance s n crss:

glbal nancal rerm prpsals reman vsve an the WTO negtatns aremrbun, a state aars n whch a lack crprate nterest s strngly mpl-cate.1 At the same tme, prvate regulatry regmes run by an r multnatnalrms appear t be prleratng an, n spte a eep glbal recessn, we have ntseen nternatnal cmmerce cllapse nt beggar-thy-neghbur prtectnsm.We are cnrnte wth what appears t be a sregar r the regme respn-sble r regulatng much nternatnal cmmerce precsely at the tme when rmsare mre nvlve than ever n regulatry aars. In atn, n many evel-png states crprate nterest n market pprtuntes has utpace the ablty these states t prperly regulate multnatnal actvty. Thus, cncerns abut thegrwth prvatze regulatn arse bth rm the ncmpleteness the nter-natnal system an rm the naeuate gvernance structures n many states.Frms can an eplt these gvernance gaps t ther avantage; but the etent ths actvty can be eaggerate. Frms ten nt t lke the uncertanty assc-ate wth naeuate regulatry structures, an much ther crprate pltcalactvty s recte twars the creatn rm-renly regulatn. Nnetheless,the ragmentatn the cntemprary nternatnal pltcal ecnmy an thencreasng multplcty actrs present plcy-makers wth a sgncant regula-try prblem. In the absence rbust nternatnal regmes, Abbtt an Snal

have calle r ‘rchestratn’ t becme the rganzng prncple transnatnalregulatn, wth states mblzng supprt r regulatry gals rather than seekngt mpse ther wn r accept a hc, prvately create slutns.2 Orchestratn,n ths cntet, speaks t sme the themes rase n ths ssue International Aairs, n that the perrmance nternatnal regmes hnges n the ablty states t wrk wth nn-state actrs n pursut plcy bjectves.

* An earler versn ths artcle was presente at a stuy grup at Chatham Huse, Lnn, n 7 September2012. The authr s grateul t all partcpants at that meetng, partcularly Amrta Narlkar, Carlne Speran Stephen Wlcck, r ther cmments. Gerge Frynas, Gan Luca Garn, Dav Lev-Faur, JhanLneue an an annymus reeree als ere valuable cmments an suggestns.

1

Aatya Matt an Arvn Subramanan, ‘Frm Dha t the net Brettn Ws: a new multlateral traeagena’, Foreign Aairs 88: 1, Jan.–Feb. 2009, pp. 15–26.2 Kenneth Abbtt an Duncan Snal, ‘Takng respnsve regulatn transnatnal: strateges r nternatnal

rganzatns’, Regulation and Governance 7: 1, 2013, pp. 95–113, doi:10.1111/j.1748–5991.2012.01167..



Steven McGuire

696International Afairs 89: 3, 2013Copyright © 2013 The Author(s). International Afairs © 2013 The Royal Institute o International Afairs.

Corporate interests, global governance and the rise o the BRICs

The rap grwth emergng markets presents rms rm the evelpe wrlwth sgncant pprtuntes t gan new markets an evelp new pructs anservces. A mnant narratve the past 20 years has cnsere the evelp-

ment rsng pwers as an ecnmc pprtunty r western multnatnals,keen t tap abunant lw-wage labur an lghtly regulate ecnmes n thepursut prt.3 Whle ths s part the realty, t s als an ncmplete pcture the cntemprary crprate lanscape, as mre an mre rms rm evel-png states becme key ecnmc actrs nternatnally. There s a ntabletenency t eaggerate the pltcal pwer western multnatnals an gnrethe emergence rms rm the rsng pwers. The evelpment cmpettveemergng market rms has been uner way r several ecaes. Dmestc plcyrerms n many emergng markets replace screte evelpment plces n

the 1990s.4

Ths mestc prcess bth captalze n an nrme Eurpean anAmercan erts t lberalze wrl trae. The evelpment an epansn the GATT agena we a great eal t crprate pltcal actvty, as Amercanmultnatnals rganze an eectve lbby n supprt the Uruguay Runnegtatns. S eectve was ths lbby that sme bservers suggest that theRun s best unerst as a cmplete trumph r crprate nterests.5 Crp-rate nterest n the WTO has cntnue, thugh actvty has centre mre nepanng cverage than n renegtatng substantve etals the agreements.Eurpean an Amercan rms playe mprtant rles n encuragng the ntegra-

tn several states, ntably Chna, nt the wrl ecnmy. Amercan mult-natnals, r eample, munte a cncerte ert t gan Chna’s entry nt theWTO, an busness pressure was als mprtant n assstng Russan accessn.

Ths busness pressure has been t an etent eceptnal, wth bservers ntngthe relatve lack busness nterest n the Dha negtatns.6 T the etent thatths s true, t arses r a cmple m reasns, nt least the ncreasng attractve-ness ‘m-range’ trae an nvestment agreements n preerence t multlateralappraches. The glbalzatn pructn has als aecte western multna-tnals’ prtectnst preerences. As gs becme mre a cllectn nterme-ate nputs rm a wer range supplers, rms have becme mre crcumspect

abut usng tratnal trae tls such as ant-umpng rules.7 The grwth ntermeate gs trae has vastly utstrppe grwth n nshe pructs nrecent years, even leang the WTO t sht the bass r ts methlgy r

3 McKnsey Glbal Insttute, Manuacturing the uture: the next era o global growth and innovation, Nv. 2012, http:// www.mcknsey.cm/nsghts/manuacturng/the_uture__manuacturng, accesse 13 Aprl 2013.

4 Zenek Drabek an Sam Lar, ‘The new lberalsm: trae plcy evelpments n emergng markets’, WTOSta Wrkng Paper, ERAD 9707, July 1997.

5 Sylva Ostry, ‘The wrl trang system: n the g uncertanty’, Review o International Organizations 1: 1,2006, pp. 139–52.

6 Matt an Subramanan, ‘Frm Dha t the net Brettn Ws’.

7 Steven McGure an Jhan Lneue, ‘Dmnshng returns t trae plcy n the Eurpean Unn’, Journal o Common Market Studies 48: 5, 2010, pp. 1329–49; Ur Daush, Shmelse Al an Rachel Espln Oell, ‘Isprtectnsm yng?’, Carnege Enwment r Internatnal Peace, nternatnal ecnmcs paper, May2011.



Multinationals and NGOs amid a changing balance of power


calculatng wrl trae ata t value ae (trae n tasks), relnushng thencreasngly utme assumptn that nshe gs cnsttute the bulk mprts an eprts.8

There s als a ntable reluctance by western rms t cmplan abut ther treat-

ment n the emergng pwers, r ear that they wll lse ut n the ast-grwngcnsumer markets n these cuntres. Fr all the attentn rsng pwers receveas lcatns r western nvestment, t s arguably ther emergence as sgncantmarkets r gs an servces that gves them leverage wth western gvern-ments an rms alke. Fr eample, n spte wesprea cncern abut Chna’setensve subszatn ts slar panel nustry, galvanzng nustry supprtr a trae case has been cult.9 US Cmmerce Secretary Gary Lcke has nteths relance n Chna—an als rawn attentn t the prgress Chna has maen placng ts mestc ecnmy n a mre nsttutnalze tng. He urthermae clear that ay-t-ay nvlvement by US rms n the Chnese market maywell serve them better than usng the avalable sputes prcesses: ‘The mpr-tance the Chnese market t the glbal strategy US eprters an cmpa-nes peratng n Chna grws aly. The nteractn between thse US busnessesan ther Chnese partners, supplers, an custmers has mprve ramatcallyas Chnese busnesses have apte mre nternatnal busness practces an asthe cmmercal legal envrnment has mprve.’10 Ths relance s nt cnnet manuacture gs but als etens ver a vast array cmmtes: 25 percent all sybeans grwn n the Unte States are eprte t Chna, an as massauence spreas n cuntres such as Chna an Brazl the market r everythng

rm stus t cars t nsurance s enrmus.11Servces trae s anther matter, as ths s an area—perhaps sn t be the nly

area—where western multnatnals have sgncant cmpettve avantages verrms rm rsng pwers. Servces als cnsttute a much greater share natnalecnmes n the evelpe wrl, thugh even n evelpng cuntres theyaccunt r hal GNP.12 There s thus a sgncant market pprtunty. In bththe Unte States an the Eurpean Unn there are actve crprate caltnspressng r etensve lberalzatn servces uner the General Agreementn Trae n Servces (GATS). Ase rm lbbyng r renewe prgress at the

multlateral level, crprate caltns such as the Caltn Servces Inustresan Eurpean Servces Frum have presse the Eurpean Unn an the Unte

8 WTO, Trade patterns and global value chains in East Asia: rom trade in goods to trade in tasks (Geneva, 2011).9 Keth Brasher, ‘Sttng ut the Chna trae battles’, New York Times, 23 Dec. 2010, http://www.nytmes.

cm/2010/12/24/busness/glbal/24trae.html?_r=0, accesse 13 Aprl 2013.10 Gary Lcke, US Cmmerce Secretary, ‘The US–Chna trae relatnshp: nng a new path rwar’,

Statement t the Senate Fnance Cmmttee hearng, 23 June 2010, http://www.cmmerce.gv/news/ secretary-speeches/2010/06/23/testmny-senate-nance-cmmttee, accesse 14 Aprl 2013.

11 Paul Casper, Present the Suth Dakta Sybean Asscatn, testmny t the Senate Cmmttee nFnance, Sub-cmmttee n Internatnal Trae, Custms an Glbal Cmpettveness, 18 Aprl 2012 , http://

www.nance.senate.gv/hearngs/hearng/?=608e6840-5056-a032-521b-eb6a46c4c9, accesse 14 Aprl2013.12 Eurpean Cmmssn, ‘Ecnmc sectrs: servces’, http://ec.eurpa.eu/trae/creatng-pprtuntes/

ecnmc-sectrs/servces/, accesse 13 Aprl 2013.



Steven McGuire


States t unertake a new run blateral transatlantc trae negtatns.13

Increasng rustratn wth the WTO’s Dha prcess has pruce a ntablesht n lbbyng actvty n bth the US an the EU twars a cmple m regnal trae agreements an sectral lberalzatn amng a smaller subset

cuntres. The great recessn 2008–2009 has prve a urther stmulus rEU–US crprate actvty, as lbbyng n avur greater transatlantc ntegra-tn can nw be sl as havng the ae benet assstng ecnmc recv-ery.14 Regnal trae agreements have multple ver the past 20 years: thereare nw ver 300 n rce arun the wrl, wth anther 200 n varyng stages mplementatn.15 Amercan an Eurpean rms have ncreasngly pte tsupprt regnal ntatves, n sme cases r the pragmatc reasn that smelberalzatn mght be better than nne. Frms may als eel that they can mreeasly mnate smaller regnal trae agreement (RTA) negtatns, partcu-larly as WTO membershp has epane an there has been a ntable ecreasen the resurce an epertse asymmetres that use t be eplte by Eurpeanan Amercan plcy-makers. Fnally, the grwth regnal trae agreementsrefects the act that the wrl s actually less glbalze than we thnk. Pruc-tn netwrks mght be mre cmple, but there remans a pwerul nee rtmely elvery ntermeate gs—the essental nputs r a nshe pruct.Ths leas t an uneven glbalzatn prcess, where many supplers are lcaten the same regn as nal assemblers.16 Ghemawat has cne the term ‘sem-glbalzatn’ t escrbe the cntemprary nternatnal ecnmy. He ntes,r eample, that n spte surgng regn rect nvestment (FDI) n the past

ecaes, abut 90 per cent e nvestment wrlwe s mestcally gener-ate, an that stck wnershp an venture captal nancng shw smlar ‘hmebase’ eects.17 Fr many evelpng states wth naeuate mestc savngs, theprblem s nsucent nvestment rm abra, nt t much. Sem-glbalza-tn aects the pltcal actvty western rms by makng natnal an regnalnsttutnal arrangements relatvely mre mprtant than multlateral ntatveseven , n prncple, the latter shul reuce the transactn csts asscate wtherental regulatn.

Western multnatnals have thus sught t engage wth emergng pwers

thrugh a m strateges. They have sught t encurage the lberalzatn these markets, banwagnng wth the prevalng supprt r pr-market plces.FDI has gven many western rms rect access t plcy-makers n emergngmarkets, s creatng anther channel ptental nfuence. The rap grwth

13 Eurpean Servces Frum, ‘Regulatry cperatn cmpnent n the servces sectrs t an EU–US ecnmcagreement’, jnt statement the Eurpean Servces Frum an the Caltn r Servces Inustres, 21 Nv.2012, www.es.be, accesse 14 Aprl 2013.

14 Rbert Lawrence, ‘Hw can trae plcy help Amerca cmpete?’, Petersn Insttute r InternatnalEcnmcs Plcy Bre n. 21, Oct. 2012.

15 WTO, ‘Regnal trae agreements gateway’, http://www.wt.rg/englsh/tratp_e/regn_e/regn_e.htm,accesse 13 Aprl 2013.

16 Elsa Gambenn, Raner Lanz an Rberta Permartn, ‘Tmelness an cntract enrceablty nntermeate gs trae’, WTO Plcy Research Wrkng Paper 5482, Nvember 2010.17 Pankaj Ghemawat, World 3.0: global prosperity and how to achieve it (Cambrge, MA: Harvar Busness Revew

Press, 2011), p. 28.





key markets—ntably Chna—has mae western rms wary appearng prtec-tnst n ther mestc markets.

Emerging market multinationals

The appearance rms rm rsng pwer ecnmes as sgncant cmpettrsn a range nustres has been ne the mre bvus manestatns changen the glbal ecnmc rer. Thugh mst the wrl’s large rms have hmebases n the establshe ecnmes western Eurpe, Nrth Amerca an Japan,emergng market multnatnals have been carvng ut strng cmpettve nchesn sectrs as verse as prcessng, generc pharmaceutcals, IT cnsultancyservces, husehl applances, rn re, cpper an cement. The Financial Times annual reprt n the wrl’s largest multnatnals shws that Chna (22 rmswth a cmbne market value US$1.63 trlln), Brazl (12; $764 blln) anIna (12; $367 blln) are hme t a sgncant number. Chna s arguably aneceptnal case, as the number large multnatnals base here has grwnar mre ramatcally than thse n any ther emergng ecnmy.18 Wth ts 22cmpanes n the FT lst, Chna’s ‘market share’ s eceee nly by the US (173cmpanes), the Unte Kngm (38), Japan (36), Canaa (25) an France (23).19 Many emergng market rms are nt publcly ute cmpanes, but rather arecntrlle r wne utrght by the state, an ths sht away rm stckhlerst prvate r state wnershp s a sgnal eature the cntemprary nterna-tnal ecnmy. Accrng t ne stuy, the 14 largest Chnese rms, 12 are

state-wne enterprses that span the bankng, cnstructn an natural resurcesectrs.20 Fr many peple, ‘Bg Ol’ s manest n large western multnatnalssuch as BP, En r Shell, an these cmpanes are nee large; but, bg annfuental as they are, they are tny when cmpare wth the state-wne lcmpanes arun the wrl. Base n prven reserves, the Bg Fur westernl—Shell, En, BP an Ttal—barely make the tp 20 rms. In the twenty-rst century, Bg Ol s a stry the ‘Bg State’.21 An bth ‘ens’ the pruc-tn scale—cmmtes lke l an agrcultural gs at ne en, an bankngan nance at the ther—currently have sgncant numbers emergng market

rms cmpetng r market share.The rap grwth emergng market rms cannt, hwever, be ascrbesmply t state patrnage an wnershp natural resurces. Rather, emergngmarket rms have becme well-run, cmpettve an successul busness enter-prses, able t cmpete wth Eurpean, Japanese an Amercan cmpanes. AsGlsten ntes, ths grwth s a stry the evelpment cmple rganza-

18 Mke Peng, ‘The glbal strategy multnatnals rm Chna’, Global Strategy Journal 2: 2, 2012, pp. 97–107.19 All data rom the Financial Times ‘FT 500 2012’, http://media.t.com/cms/a84bc84c-ca80-11e1-898-00144

eabc0.p, accesse 14 Aprl 2013.20 Vale Clumba Center, ‘Chnese multnatnals gan urther mmentum’, Aprl 2010, http://www.vcc.

clumba.eu/les/vale/cuments/EMGP-Chna-Reprt-2010-Fnal-07_Dec_10_0.p, accesse 14 Aprl2013.21 Ian Bremmer, ‘State captalsm cmes age: the en the ree market’, Foreign Aairs 88: 3, May–June 2009,

pp. 40–55.



Steven McGuire


tns heae by sphstcate an capable managers wh pssess sklls an attr-butes that nce seeme t be the mnply western multnatnals.22 One Eurpe’s an Amerca’s mst successul eprts has been, thrugh varuschannels, busness eucatn. The mnant narratve n nternatnal pltcal

ecnmy n the past 20 years has vewe lberal plces n evelpng states asaccmmatng western ecnmc nterests; what has been verlke has beenthe rle lberalzatn playe n the creatn cmpettve mestc rms wthnemergng ecnmes. These rms, whle etensvely stue n the managementstues lterature, reman ntably absent rm Internatnal Relatns analyses.

Acaemc wrk n emergng market multnatnals suggests that, n ptentallymprtant ways, they are—r the mment, at least—erent rm ther evel-pe cuntry cmpettrs. Braly, there are tw areas erentatn. Therst relates t the markets serve by emergng market rms; the secn cncernsther nternal rganzatn an wnershp structures. In respect the rmer, thas been suggeste that rms rm emergng ecnmes, lackng the eep captalan ntellectual resurces western multnatnals, have tene t pt rpructs an servces that wrk n ther evelpe markets, that s Suth–Suthnvestment.23 Frms base n emergng markets are partcularly g at aaptnga we range pructs r cnsumers n less evelpe states, where purchasngpwer an the lack custmer supprt servces reure relatvely smple, cheapan rbust pructs well aapte t emergng ecnmes. Mern cmmunca-tns technlges have als assste the grwth emergng market rms. Theavent wesprea mble telephny, nternet an lgstcs servces allws

rms t glbalze at a much earler stage n ther evelpment than n prevuseras. Overall, n ther wrs, emergng market rms have partcular avantagesn terms spee t market an general amlarty wth ther emergng marketsthat allw them t cmpete—r utcmpete—rms base n the ‘Tra’ theUS, the EU an Japan.

Mern cmmuncatns an lgstcs allw the saggregatn supplychans: nt merely gs, but als eas an nrmatn. Gere anclleagues wrte abut the ragmentatn the glbal ecnmy, as mre an mrepructs are the result the nteractns a cmple but sperse netwrk

supplers. The vertcal ntegratn the tratnal multnatnal enterprse— where all mprtant busness unctns were nternalze wthn the rm—hasgven way t a erentate netwrk structure, where a gven rm may, n act,eect very lttle rect cntrl ver upstream supplers.24 Ths pattern s nw wellaccepte by cmmentatrs, but ts mpact n glbal gvernance s nly nw bengapprecate. As nternatnal trae becmes mre an mre cncerne wth traen ntermeate gs, crprate nterests change. When a rm eprts a nsheg, market access ssues are nee mprtant; but, that rm’s busness s part

22 Anrea Glsten, Multinational companies rom emerging economies: composition, conceptualization and direction in the

global economy (Basngstke: Palgrave, 2009).23 Glsten, Multinational companies rom emerging economies.24 Gary Gere, Jhn Humphrey an Tmthy Sturgen, ‘The gvernance glbal value chans’, Review o

International Political Economy 12: 1, 2005, pp. 78–104.





a cmple supply chan, the rm’s nterests are lkely t be gverne by aher-ence t nternatnal stanars, such as thse evelpe uner the InternatnalStanars Organzatn. In a netwrke, multnatnal supply chan, t s cultt scern a ‘natnal nterest’ t brng t the WTO negtatng table.25 Fr many

rms rm emergng markets, cnvergence twars accepte peratnal stanarss mre mprtant than partcpatn n large, transnatnal crprate pltcalactvty. Büthe, n hs scussn the pwer the Internatnal Electrtech-ncal Cmmssn (IEC), artculates the pwer nustry-base stanars:

IEC stanars cntrl market access, as cnsumers r busnesses rely upn them rnterperablty, an purchasng managers rm nustry an retalers ncrprate themnt purchase rers. Prucers may als cmply wth them because nsurance cmpanesuse them t gauge the rsks that a manuacturer pses, r because curts lk t them as anncatn best practce n pruct lablty law suts. In atn, gvernments nt nlyuse IEC stanars r publc prcurement but als an ncreasngly ncrprate r reer-ence them n health an saety regulatns, whch rener the ‘vluntary’ IEC stanarslterally manatry.26

Emergng market rms have benete rm the lberalzatn glbal trae nthe past ew years. In the rst place, the reuctn tars an cncmtantpenng up markets has allwe the emergng market rms that are able tgrw utse ther hme markets t s. Cnsstent wth ecnmc thery, asmestc ecnmes becme mre cmpettve as a result pr-market rerms,the best-perrmng mestc rms becme mre cmpettve an are then able tnternatnalze successully.27 Pr-market rerms thus prve a spur t mprvean nternatnalze.28 Emergng market rms have als becme very actve nves-trs. Ceme, the Mecan cement prucer, went n an acustn spree nthe 1990s, usng FDI as a mechansm t bul an nternatnal presence. Inanmultnatnals—ntably Tata—have been successul at replcatng the versebusness grup mel at the nternatnal level. A recent reprt by A. T. Kearneynte that, partcularly ater the start the great recessn, the vlume an value mergers an acustns by emergng market cmpanes began t cnvergeraply wth evelpe cuntry levels, an a sgncant eature was the use mergers an acustns t acure establshe brans wth estng custmer

bases.29 What s als ntewrthy, hwever, s hw aggregate nvestment gureshe sgncant clusterng nvestments n a ew rms. In Brazl, r eample,Vale (mnng) an Petrbras (petrleum) accunte r tw-thrs Brazl’s

25 Mchael Hart, ‘Breakng ree: a pst-mercantlst trae an pructvty agena r Canaa’, CD HweInsttute Cmmentary 357, July 2012, http://www.chwe.rg/breakng-ree-a-pst-mercantlst-trae-an-pructvty-agena-r-canaa/18501, accesse 14 Aprl 2013.

26 Tm Büthe, ‘Engneerng uncntesteness? The rgns an nsttutnal evelpment the InternatnalElectrtechncal Cmmssn’, Business and Politics 12: 3, 2010, artcle 4.

27 Steven McGure, ‘N mre Eur-champns: the nteractn Eurpean trae an technlgy plces’, Journal o European Public Policy 19: 6, 2006, pp. 887–905.

28 Lus Alns Dau, ‘Pr-market rerms an evelpng cuntry multnatnal cmpanes’, Global Strategy

Journal 3: 2, 2012, pp. 262–79.29 A. T. Kearney, Emerging and established markets converge, Aug. 2012, http://www.atkearney.cm/en_GB/paper/ -/asset_publsher/Vv4Hz2h8bS/cntent/emergng-an-establshe-markets-cnverge/10192, accesse 14Aprl 2013.



Steven McGuire


utwar stck FDI n 2009.30 Smlarly, n Argentna, tw rms accunt r 85per cent the regn assets hel by Argentne rms.31 Ths pattern hls bralyacrss emergng markets; thugh mre an mre rms are nternatnalzng, asmall number rms are partcularly successul.

Anther eature emergng market rms has been the regnal cus thernvestment an sales. Brazl’s mst ppular FDI estnatns amng evelpngstates are Argentna an Uruguay.32 Whle cnsumers an the ppular mea tenasten upn the eceptns, such as Tata r Huawe, when bservng the march emergng market rms, n act mst multnatnals rm rsng ecnmes, ratherlke ther cunterparts n Eurpe r Nrth Amerca, ten t lcate mst thernternatnal actvtes clse t hme. Ths enables them t captalze n relatvesmlartes n cnsumer culture, lwer transprt csts an, mre recently, thencreasng number RTAs. Many emergng market rms stll lack the techn-lgcal, marketng an regulatry sklls necessary t vercme ther lablty regnness n western markets.33 Ramamurt ntes that the bulk FDI rmemergng markets nt evelpe markets has been n sectrs that are mature nevelpe cuntres but eperencng ast grwth n rsng pwers. Buyng maturewestern rms n epanng nustres as ecnmes scale an scpe t servceepanng markets n cuntres such as Ina an Chna.34 Emergng market rmsperate best where there are cuntry-specc avantages (lngustc, cultural anpltcal smlartes) that cmpensate r a lack rm-specc avantages (suchas research an evelpment capablty r bran recgntn).35

Ownershp s anther area erentatn between evelpe an evelpng

cuntry multnatnals. T a much greater etent than n evelpe ecnmes,large rms n the rsng pwers eature state wnershp r prvate wnershp struc-ture alng amly lnes. The latter categry, the busness grup, has been largelyverlke by the IR lterature n spte ts ubuty n evelpng ecnmes.36 The state wnershp many rms rm emergng markets has rase pltcalcncerns n western captals that FDI s part a braer gepltcal strategy—

30 Luz Carvalh an Álvar Cynr, ‘Brazl’s glbal players’, n Karl Sauvant, Vshwas Gvtrkar an KenDaves, es, MNEs rom emerging markets: new players in the world FDI market (New Yrk: Vale Clumba Centern Sustanable Internatnal Investment, 2011), p. 25, www.vcc.clumba.eu/les/vale/.../EMGP_-_eBk_ PDF_2_11.p, accesse 14 Aprl 2013.

31 Vale Clumba Center, ‘Argentne multnatnals reman nustrally verse an regnally cuse’, Nv.2011, http://www.vcc.columbia.edu/fles/vale/documents/EMGP-Argentina-Report-2011-Final-30_Nov_ 11. p, accesse 14 Aprl 2013.

32 Lus Ans Lma an Octav e Barrs, ‘Brazl: the grwth Brazl’s rect nvestment abra an thechallenges t aces, 2009’, n Inward and outward FDI country profles (New Yrk: Vale Clumba Center, Jan.2011), p. 239, http://www.vcc.clumba.eu/les/vale/cntent/Prle_eBk_PDF_2_11.p, accesse 14Aprl 2013.

33 Steven McGure, Jhan Lneue an Gabrele Suer, ‘Learnng an lbbyng: emergng market rms ancrprate pltcal actvty n Eurpe’, European Journal o International Management 6: 3, 2012, pp. 342–62.

34 Rav Ramamurt, ‘What really s erent abut emergng market multnatnals?’, Global Strategy Journal 2:1, 2012, pp. 41–8.

35 Eltsa Banaleva an Charles Dhanaraj, ‘Hme-regn rentatn n nternatnal epansn strateges’, Journal o International Business Studies 44: 2, 2013, pp. 89–116.

36 Tarun Khanna an Yshay Yaeh, ‘Busness grups n emergng markets: paragns r parastes?’, Journal o Economic Literature 45: 2, 2007, pp. 331–72.





partcularly n the part Chna.37 Ths vew, curse, s gven mre weght bythe supprt that the Chnese state prves r ts rms—even prvate nes—tacure western cmpanes.38 Mre rect ecnmc cncerns have als been rase,namely that state-wne enterprses, lackng the market scplne cmpettrs,

verpay r nvestments an, n ng s, strt the market r crprate assets.39

They are als regare as necent an, t varyng egrees, crrupt. Busnessgrups are a cmmn rm crprate arrangement n rsng pwers, rangngrm gant Krean chaebols t smaller, verse cmpanes such as Innesa’sSalm Grup. Busness grups, cnglmerates lsely cnnecte busnesses, areprevalent n emergng markets because the structure ers a number avan-tages n weakly nsttutnalze envrnments. Frst, amlal bns substtuter rbust cntracts an legal systems n respect wnershp. Dverscatn alsallws r the spreang rsk acrss a prtl busnesses. Thugh ver-scatn s wesprea n western ecnmes, the vlatlty many emergngecnmes makes verscatn an mprtant rsk mtgatn tl. What s ntyet unerst s the etent t whch the nsttutnalzatn the rule lawn rsng pwers wll aect the busness grup structure.

The clse relatnshps that state-wne enterprses r busness grups mghthave wth mestc pltcal authrty are ten thught as symbtc, but therealty s mre cmple. In authrtaran regmes, prvately wne busness grupscan use pltcal actvty t mantan g—an hence lucratve—relatns wthpltcal authrty. Hwever, Deleman an Bewyn have cumente hwrms versy ther pltcal actvty just as they ther busness nterests—an

r precsely the same reasn: nsurance aganst averse change n the pltcalenvrnment.40 As Chna evelps, there s evence an ncreasngly cmplerelatnshp between pltcal authrty an entrepreneurs, where the latterreure pltcal supprt r ther busnesses but als engage n mtgatn strate-ges t prevent pltcans rm apprpratng ecnmc rents.41 In Russa, theaptn crprate gvernance arrangements brrwe rm the US an UKhave the eect erectng a barrer t mestc pltcal ntererence n the rm’speratns.42 There s anther reasn t suppse that emergng market rms wllengage n pltcal actvty, an ths s rectly lnke t the enhance nternatnal

presence many these rms. Aherence t nternatnal regulatry stanarsreures that rms engage n a learnng prcess, an ths new knwlege can shapean nrm ther subseuent nteractns wth mestc pltcal authrty n thehme cuntry.

37 Debrah Bräutgam an Tang Xayang, ‘Ecnmc statecrat n Chna’s new verseas Specal EcnmcZnes: st pwer, busness r resurce securty?’, International Aairs 88: 4, July 2012, pp. 799–816.

38 A. T. Kearney, Emerging and established markets converge.39 Antn Capbanc an Hans Chrstansen, ‘Cmpettve neutralty an state-wne enterprses’, OECD

Crprate Gvernance Wrkng Paper n. 1, Oct. 2011.40 Marleen Deleman an Jean Bewyn, ‘Usng rganzatn structure t buer pltcal tes n emergng

markets: a case stuy’, Organization Studies 33: 1, 2012, pp. 71–95.

41 Pe Sun, Kamel Mellah an Guy Lu, ‘Crprate gvernance alure an cntngent pltcal resurces ntranstn ecnmes: a lngtunal case stuy’, Asia–Pacifc Journal o Management 28: 4, 2011, pp. 853–79.42 Stanslav Markus, ‘Crprate gvernance ces as pltcal nsurance: rm-level nsttutnal creatn n

emergng markets an beyn’, Socio-Economic Review 6: 1, 2008, pp. 69–98.



Steven McGuire


Corporate political activity and emerging market frms

It s cmmn t talk abut the ncreasng hetergenety the nternatnal plt-cal ecnmy, wth the epansn the number players, the epanng rle rprvate regulatn, an the greater actvty scal mea an nn-gvernmental

rganzatns (NGOs) as key partcpants. As Bernsten an Cashre argue, urunerstanng hw actrs nfuence pltcs lags behn the realty hwplcy s mae.43 In terms the theretcal ramewrk unerpnnng ths specalssue International Aairs, the avalable evence suggests that emergng marketrms are nt ramng ther plcy preerences n terms ppstn t the evel-pe wrl. Rather, they are aptng pstures that ncate banwagnng, anan ert t jn an ntegrate nt the nternatnal ecnmy an ts gvernance.Emergng market rms have been actve n the mestc pltcal arena r manyyears n ways recgnzable t bservers western crpratns. Busness grup

pressures push Mecan plcy-makers t seek ree trae wth the US, anInan rms seekng t nternatnalze supprte etensve lberalzatn n the1990s.44 The grwth ‘new prtectnsm’—the use prcurement an R&Dplces—n a emergng market rms appears t be ncreasng. In 2012, thegvernment Ina passe the Preerental Market Access plcy, whch reuresthat gvernment agences surce securty-relate electrncs technlges rmInan rms. Cmplants have been mae r smlar reasns abut Chna’s plcesr the wn energy an slar nustres.45

When mst bservers cmment n crprate nvlvement—r g r ll— n the cnstructn glbal ecnmc gvernance, they ten have n mnthe etensve rm-level lbbyng actvty asscate wth the WTO’s UruguayRun negtatns rm 1986 t 1994.46 But the success crprate pltcalactvty n ths Run was arguably eceptnal an has nt been repeate snce.47 The prblem nw s, as Narlkar has nte, crprate nerence t the WTO.48 Anther ppular eample s the vast epanse nternatnal nancal regula-tn, rangng rm bankng supervsn t securtes echanges t nternatnalaccuntng stanars. What all nstances successul crprate pltcal actvtyshare s a caltn lke-mne, resurceul an mtvate rms that succeeen galvanzng pltcal supprt r ther preerre plcy preerences. The case

nternatnal accuntng stanars (IAS), r eample—the rle the majrpressnal servce rms, all wth US r Eurpean rgns, n evelpng agreeIAS rules an persuang the EU t act as a key pltcal cnut—has been well

43 Steven Bernsten an Benjamn Cashre, ‘Glbal gvernance: pathways t nfuence’, International Aairs 88:3, May 2012, pp. 585–604.

44 Khanna an Yaeh, ‘Busness grups n emergng markets’.45 Vn Aggarwal an Smn Evenett, ‘Inustral plcy chce n the crss era’, Oxord Review o Economic Policy

28: 2, 2012, pp. 261–83.46 Thmas Lawtn, Jhan Lneue an Steven McGure, ‘Multlateralsm an the multnatnal enterprse’,

Business and Politics 11: 3, Aug. 2009, doi: 10.2202/1469-3569.1274.

47 Rchar Sherman an Jhan Elassn, ‘Trae sputes an nn-state actrs: new nsttutnal arrangementsan the prvatzatn cmmercal plmacy’, World Economy 29: 4, 2006, pp. 473–89.48 Amrta Narlkar, ‘New pwers n the club: the challenges glbal trae gvernance’, International Aairs 86:

3, 2010, pp. 717–28.





cumente.49 Strng caltns lke ths, hwever, may be less cmmn anmre feetng than ur publc cncern abut them ncates.

I successul caltn-bulng reures a share cnceptn the nature the plcy prblem, then there s reasn t epect rm-level caltns t be mre

cult t evelp n the uture—but nt because emergng market rms ramether emans n ppstn t establshe players. The wnershp structures emergng market rms may well eert a cnserable nfuence n ther wllng-ness t epan ther pltcal actvty at the glbal level. Mrever, as nte abve,the multple pathways t nfuence that any busness nw enjys—bth legsla-tve an regulatry—mean that much pltcal actvty ges unntce. Emergngmarket rms are thus part a pltcal eeback lp: as they nternatnalze,they learn abut an aapt t nternatnal regulatry stanars an arenas, anths n turn aects ther nteractns wth ther hme gvernments.50

Frms rm rsng pwers are alreay takng avantage estng nsttu-

tnal structures an usng nn-market strateges n an ert t epan. Frst,the estng regme n nwar nvestment has prve n bstacle t emergngmarket rms seekng assets abra. The cnvergence evelpng an evel-pe cuntry merger an acustn actvty es nt suggest the estence regulatry r pltcal bstacles n any but the mst unusual cases. The WTO’ssputes prcess s a case n pnt, wth mre an mre actvty n the prcess rmrsng pwers. Thugh gvernments take the cases t Geneva, behn each ne aremestc rms seekng t epan ther nternatnal markets.51 Brazl has beenpartcularly successul n evelpng a ‘thr pllar’—a prvate sectr netwrk

rms, trae asscatns, cvl scety an acaema—t assst n the prsecutn trae cases an the mre general usn knwlege abut the nternatnalecnmc system.52 Frms rm ther member states are llwng ths lea anare ncreasngly usng the WTO sputes prcess. Brenan Vckers ntes that thearea greatest grwth n Dspute Settlement Unerstanng (DSU) cases hasbeen n thse between evelpng cuntres. Ths s cnsstent wth the bservepattern nternatnalzatn emergng market rms: they stll cncentrate nepansn n ther evelpng markets.53

Secn, we wul epect these rms t cncentrate n regnal ntatves thatrefect—at least r nw—the regnally mnant pattern ther nvestmentan sales. Mrever, as successve WTO negtatns becme larger an mreunwely, the attractns blateral r plurlateral appraches ncrease. In the

49 James Perry an Anreas Nlke, ‘The pltcal ecnmy nternatnal accuntng stanars’, Review o International Political Economy 13: 4, 2006, pp. 559–86; Karthk Ramanna an Ewa Sletten, ‘Why cuntresapt nternatnal nancal reprtng stanars?’, Harvar Busness Schl Wrkng Paper 09–102, 24 March2009, http://www.hbs.eu/aculty/Publcatn%20Fles/09-102.p, accesse 14 Aprl 2013.

50 Capbanc an Chrstansen, ‘Cmpettve neutralty an state-wne enterprses’.51 Vn Aggarwal an Smn Evenett, ‘The nancal crss, “new” nustral plcy, an the bte multlateral

trae rules’, Asian Economic Policy Review 5: 2, Dec. 2010, pp. 221–44.52 Gregry Shaer, Mchelle Rattn Sanchez an Barbara Rsenberg, ‘The trals wnnng at the WTO: what

les behn Brazl’s success?’, Cornell Journal o International Law 41: 2, Oct. 2008, pp. 383–501; Rger e Suza

Faras, ‘Swng the sees leaershp: Brazl an the agrcultural trae negtatns the Uruguay Run’, Journal o World Trade 44: 3, 2010, pp. 661–85.

53 Brenan Vckers, ‘The rle the BRICS n the WTO’, n Amrta Narlkar, Martn Dauntn an Rbert Stern,es, The Oxord handbook on the World Trade Organization (Or: Or Unversty Press, 2012), pp. 254–74.



Steven McGuire


case regnal agreements, the gans an csts cnclung the pact are mrecncentrate, thus prvng rms wth pwerul ncentves t partcpate.54 Asnte abve, rms are nt nearly as glbal as s ten suggeste; mst have anentable hme regn where mst ther sales are generate. Ghemawat calle

regnal strateges the ‘rgtten strategy’ because the lack attentn t RTAsby management stues cmmuntes.55 Ths bservatn s partcularly mpr-tant n respect emergng market rms whch, as nte abve, ten remancmparatvely regnally cuse. It thus makes sense r these rms t rect therpltcal actvty twars the creatn a vable regnal market.

Thr, n a wrl saggregate supply chans, actvty n stanar-settngbes becmes sgncant bth t gan mprtant nrmatn abut the emans ther rms n respect the peratnal perrmance epecte a cmpnententerprse an als as a sgnallng evce t ptental clents an custmers. ISOcmplance, r eample, s a classc nstance a regulatry prcess nt whchrms enter, knwng that the lack ISO certcatn s a cmmercal eathsentence. The same hls true r envrnmental an scal stanars, thughths may be aecte t sme etent by a rm’s pstn n the supply chan. Supplychans ase, nternatnal regulatry bes er rms rm emergng marketsan pprtunty t ‘brrw’ regulatns an nsttutnal structures lackng nther hme markets. Fr eample, less evelpe ecnmes actvely apte theaccuntancy stanars the Internatnal Accuntng Stanars Bar whlercher, mre evelpe ecnmes were less wllng t cee authrty t the bar.Interestngly, Ramanna an Sletten nte a clear regnal r netwrk eect where

the aptn IAS by ne cuntry was emulate by neghburs.56 Ths strnglysuggests that mestc crprate cnsttuences wrk t lwer transactn cststhrugh regulatry harmnzatn.

The decline o the NGO?

As emergng market rms becme mre mprtant players, s ths takng place atthe epense NGOs? Fr the past 20 years, the ncreasng prmnence NGOsn the evelpment an elvery publc gs an evelpment assstance has

been ntable. NGO grwth has been spurre by glbalzatn, as nternatnalplcy crnatn prmpte pltcal actvty at the nternatnal level. ButNGOs were nt merely the vehcle r the transmssn prvate pltcal preer-ences; they als playe sgncant rles n the evelpment an elvery servcesn weakly nsttutnalze states. In Arca, r eample, ne stuy suggeste thatseveral thusan NGOs—manly base n evelpe ecnmes—were wrkngn Arca acrss a range actvty areas.57 NGOs an rms are ten treate mre54 Kerry Chase, ‘Ecnmc nterests an regnal trang arrangements: the case NAFTA’, International

Organization 57: 1, 2003, pp. 137–74; Mark Manger, ‘Cmpettn an blateralsm n trae plcy: the case Japan’s ree trae agreements’, Review o International Political Economy 12: 5, 2005, pp. 804–28.

55 Pankaj Ghemawat, ‘Regnal strateges r glbal leaershp’, Harvard Business Review 83: 12, 2001, pp. 98–108.56 Ramanna an Sletten, ‘Why cuntres apt nternatnal nancal reprtng stanars?’.57 Frze Manj an Carl O’Cll, ‘The mssnary pstn: NGOs an evelpment n Arca’, International

Aairs 78: 3, May 2002, pp. 567–83.





r less entcally n sme the lterature, bth types actr beng cnceve as utsers brngng abut sgncant change t the state-centrc pltcal rerthat has mnate nternatnal relatns snce the Treaty Westphala.58 Estynte that a key rle playe by NGOs was t act as ntellectual cunterweghts

t gvernments n nternatnal rums, artculatng vews that wul therwseg uncnsere.59

Hwever, changes n the nternatnal pltcal ecnmy have wrke t theetrment sme NGOs, ntably thse cncerne wth evelpment an theprvsn publc gs n weakly nsttutnalze states: thse that Teegan,Dh an Vachan have calle ‘peratnal’ NGOs.60 Even bere the arrval theBRICs an the braer phenmenn emergng markets, western plcy eltescame t embrace market-base slutns t a range evelpment ssues. Jenknsntes the etent t whch multlateral rganzatns have seen crprate scalrespnsblty (CSR) ntatves as merely evelpment plcy elvere by theprvate sectr.61 Crpratns ere tw thngs. Frst, at a tme the mnance ne-lberal cnceptns ecnmc prgress, t became useul t turn t themarket n evelpment as much as n any ther ssue. Pverty appeare ntrac-table n many states, an t was tme t let an alternatve, market-cuse plcyregme take the lea. Ase rm beng avure r eatnal reasns, rms alsere resurces, bth nancal an n persnnel an epertse.62 Thus nterna-tnal agences such as the Wrl Bank began t brker relatnshps betweenevelpment NGOs an cmpanes, attemptng t use the publc acceptablty the altrustc mtves many NGOs wth the cash an techncal knw-hw

the crprate sectr.The success the BRICs has, hwever, unermne a key argument abut

the evelpment trap that ace emergng markets, an t an etent justeNGO nvlvement n cuntres. Trae lberalzatn—albet cmbne tenwth mre ecnmcally natnalst plces—has prve spectacularly successulr many states. Suggestns, r eample, that the agreement n trae-relateaspects ntellectual prperty rghts (TRIPS) trappe evelpng states ntbecmng permanent cnsumers western-base technlgy have prve we the mark.63 Emergng market rms have establshe themselves n a range

58 Stephen Kbrn, ‘Glbalzatn, transnatnal crpratns an the uture glbal gvernance’, n AnreaGerg Scherer an Gu Palazz, es, Handbook o research on corporate citizenship (Cheltenham: Ewar Elgar,2008).

59 Danel Esty, ‘Nn-gvernmental rganzatns at the Wrl Trae Organzatn: cperatn, cmpettn,r eclusn’, Journal o International Economic Law 1: 1, 1998, pp. 123–47.

60 Hly Teegen, Jnathan Dh an Sushl Vachan, ‘The mprtance nn-gvernmental rganzatns(NGOs) n glbal gvernance an value creatn: an nternatnal busness research agena’, Journal o International Business Studies 35: 6, 2004, pp. 463–83.

61 Rhys Jenkns, ‘Glbalzatn, crprate scal respnsblty an pverty’, International Aairs 81: 3, May 2005,pp. 545–60.

62 Ncc Gra an Franz Rthlau, ‘The why an hw NGO–rm cllabratns’, Wrkng Paper n.04/2011, Jhannes Gutenberg-Unversty Manz, July 2011.

63 Shyama Raman, ‘Wh’s ntereste n btech? R&D strateges, knwlege base an market sales Inanbtechnlgy rms’, Research Policy 31: 3, 2002, pp. 381–98; Clemente Frer-Pnea, ‘The mpact strnger ntellectual prperty rghts n scence an technlgy n evelpng cuntres’, Research Policy 35: 6,2006, pp. 808–24.



Steven McGuire


nustres rch n ntellectual prperty, bth by nvestng n ngenus researchan evelpment an thrugh acustns western rms. The latter rutealmst certanly ha nt ccurre t many the WTO’s crtcs when TRIPSwas beng mplemente—but t s a remner the aaptablty crpratns

an the multple means they have t attan ther busness bjectves. Crtcsm CSR as a evelpment tl has ten cuse n evelpe wrl multna-tnals an ther actvtes n emergng markets, emphaszng the lack lng-term cmmtment by these nvestrs: as rms cul, n thery, relcate anywhere,they naturally ha lttle ncentve t make pverty allevatn a key bjectve.64

Over the past 20 years, numerus multlateral bes have sught t gve NGOsa greater vce. Fr sme, ths was n respnse t a perceve legtmacy crssan an ert t reuce the nrmatnal an resurce ecences that averselyaecte the ablty evelpng states t nvlve themselves n the multlateraltrae negtatns. The WTO, r eample, sught t evelp greater an betternsttutnalze lnks wth NGOs n respnse t the ant-glbalzatn backlasht eperence n the years llwng the successul cnclusn the UruguayRun. Steek ntes that NGO nvlvement n the WTO s, n sme measures,the eual busness grups. Hwever, nfuence n the prcess s mre -cult t scern. Whle NGO representatves are mre welcme n Geneva thanrmerly, they have nt been able t gan rect access t the WTO’s prceures,ntably ts sputes prcess.65 Van en Bssche ntes that NGOs share many the characterstcs rms n respect rmal access t nternatnal rganza-tns: they lack a clear manate an hence legtmacy, an are nt accuntable. 66

Sme NGOs have apte a pragmatc apprach an ncreasngly sught talgn themselves wth rms acrss a range ssue areas. T sme etent, thsaaptatn was necesstate by multlateral rganzatns that ha, prevusly,use NGOs t elver plcy utputs n nvual cuntres. Multlateral agencessuch as the UN ncreasngly use rms n preerence t NGOs n the elvery sme evelpment assstance, argung that rms pssess greater resurces (bthnancal an materal) an epertse t target assstance an ll gvernance gapsn emergng markets.67 NGOs als came t preer prvate regulatry gvernancestructures ut rustratn wth the seemng nablty states t evelp rbust

nternatnal regulatn n areas such as envrnmental prtectn.68

Frms, curse, can benet rm ths arrangement t the etent that t cners n themgreater legtmacy an scal acceptance.69

64 Jenkns, ‘Glbalzatn, crprate scal respnsblty an pverty’.65 Jen Steek, ‘Awkwar partners: NGOs an scal mvements at the WTO’, n Narlkar et. al., es, Oxord

handbook o the World Trade Organization, pp. 301–19; Martna Pewtt, ‘Partcpatry gvernance n the WTO:hw nclusve s glbal cvl scety?’, Journal o World Trade 44: 2, 2010, pp. 467–88.

66 Peter van en Bssche, ‘NGO nvlvement n the WTO: a cmparatve perspectve’, Journal o International Economic Law 11: 4, 2008, pp. 717–49.

67 Steven Kbrn, ‘Prvate pltcal authrty an publc respnsblty: transnatnal pltcs, transnatnal rmsan human rghts’, Business Ethics Quarterly 19: 3, 2009, pp. 349–74.

68 Erka N. Sasser, Aseem Prakash, Benjamn Cashre an Graeme Aul, ‘Drect targetng as an NGO pltcalstrategy: eamnng prvate authrty regmes n the restry sectr’, Business and Politics 8: 3, 2006, artcle 1.69 Carla Kantz, ‘The pwer scalzatn: engagng the amn nustry n the Kmberley Prcess’, Business

and Politics 9: 3, 2007, artcle 2.





Conclusion

In hs analyss Canaan trae plcy, Mchael Hart argue that ‘tratnaltrae negtatns have becme much less mprtant, n part because the traenegtatns the past create a sl ramewrk rules an cmmtments by all

majr traers t keep ther markets pen’.70 Hart’s argument remns us that theWTO mpasse s nt unambguusly a sgn alure. Emergng market rms havethrve n the past 20 years: they have entere new markets, eprte successully,purchase rvals an ther rms as part an acustn strategy, an have evel-pe brans an prpretary knwlege t enable uture grwth. The saggre-gate glbal ecnmy may well be a prblem r plcy-makers—an t cul bea prblem r rms—but r nw, the lberalzatn set n tran by Eurpe an theUnte States has prve remarkably accmmatng t new crprate pwers.Rather than seeng prvate regulatry regmes as nstruments ppressn, these

emergng market rms have recgnze that aherence t these stanars, ar rmlckng them nt a subrnate pstn, can be a means t ull engagement nthe nternatnal ecnmy.

It s true, nnetheless, that emergng market rms ten cme rm mestcpltcal systems that emphasze ecnmc natnalsm. Many successullyrganze aganst urther lberalzatn measures an supprt the bra negtatngagena BRIC cuntres n the WTO. They may yet n eeper ntegratnnt the glbal ecnmy mre cult, especally mature markets n Eurpe anthe Unte States reman lcke n pst-crss slw grwth. Fr nw, hwever, thesaggregate nature glbal ecnmc gvernance suts many emergng marketrms. They have lttle reasn t put resurces nt what mght be crprate plt-cal actvty that yels ew gans.

Whereas sme plcy-makers n the West always vewe the rse new pwersas a zer-sum game, ths was never true r multnatnals. Crprate nterestshave always cuse n the pprtuntes ere by emergng ecnmes as wellas the ptental r cmpettn they represent. Frms rm evelpe ecn-mes have sught t engage mre at the sectral an regnal levels, partly ut rustratn wth the multlateral prcess. EU an US rms n lnger ‘call theshts’ n nternatnal negtatns, thugh clearly they reman nfuental. At a

tme when the evelpe wrl s recverng rm an ecnmc crss an, n thelnger term, acng nancal challenges rm emgraphc change, the emergngauent mle class n rsng pwers represents an pprtunty nt t be msse.Pltcal actvty must be careully calbrate.

Fr NGOs, the hetergenety the current envrnment presents a prblem.The success lberalzatn has presente a challenge t thse whse raison d’êtrewas ecnmc justce. Even n envrnmental ssues, there s sme evence thatrms are respnng t market-base ncentves, thugh NGOs wll clam a keyrle n shapng cnsumer epectatns abut the envrnmental mpact mern

captalsm. The current pattern selectve allances between NGOs an rms

70 Hart, ‘Breakng ree’, p. 25.



Steven McGuire

710International Afairs 89: 3, 2013

lks set t cntnue. Frms, r all ther success, see ther legtmacy as scalactrs as hghly cntngent, an NGOs prve useul scally acceptable partnersn pursut plcy preerences.

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Multinationals and NGOs amid a changing balance of power.pdf