THE TRANSFER OF WEALTH FROM THE SOUTH TO THE NORTH/99state of affairs. A study published by the French statistical institute
INSEE, Le Commerce exterieurde la France (INSEE, 1997), shows that
in 19 9 6 France recorded a considerable trade surplus with low-wage
countries. France's trade with countries of the North is balanced, but
it recorded a surplus in 1996-40 per cent thanks to its trade with
Africa, 2 5 per cent with the Middle East and 15 per cent with Eastern
Europe. Yet 80 per cent of France's trade is carried out with other
industrialised countries. In other words, the remaining 20 per cent
of the country's foreign trade - with the Third World and Eastern
Europe - generated France's trade surplus.
World Trade Controlled by the North's MNCs
The industrialised countries' MNCs control global transport, trade
and the distribution of goods and services. These companies take in
a large share of the earnings obtained through the sale of
commodities, since Third World countries must pay astronomical
amounts for the transport, insurance, packaging and marketing of
the products they export and import. The industrialised countries'
shipping companies belong to well-organised cartels and charge high
fees for transport services. In 1979, these companies controlled 74
per cent of the world's merchant fleet, while developing countries
controlled only 9 per cent. The rest was controlled by the Eastern
Bloc. One finds similar figures in the air freight industry.
Several studies have shown that Third World countries receive on
average only 10-15 per cent of the retail sale price of their products
in the North.
Profit Repatriation by MNCs Operating in Third World
Countries
Between 1980 and 1982, net repatriation of MNC profits totalled
SI22 billion.
In the 19 70s, the net inflow of foreign direct investment (FDI) into
'developing countries' was on average higher than the net outflow of
FDI earnings (dividends, royalties, fees) into North-based MNC
coffers. But with the onset of the Third World debt crisis, especially in
Latin America, MNCs reversed the trend by accelerating and
increasing earnings repatriation from 1981 to 1986.