How the Globalized Economy Works Today 331subsidies greater than the WTO’s cap of 10 percent on grain produced for food in their
own country, nor for stockpiling grain to guarantee food security for impoverished citizens.
That agreement paved the way for a trade- facilitation agreement to streamline customs
procedures and upgrade border and port infrastructure. In actuality, as The Economist
reports, Doha seems to have “fizzled out. The WTO is still good at enforcing existing trade
agreements, but has not managed to bring in a comprehensive new deal for two de cades.”^3
Negotiating agreements among 161 countries at varying levels of development and
with diverse national objectives is a challenge. Meanwhile, as discussed later, the
United States, the Eu ro pean Union, ASEAN, and others are pursuing regional and
bilateral trade agreements, often with mutually incompatible rules, that will make
future global agreements even harder to conclude. Not at the negotiating table as in de-
pen dent actors, but key interests, nonetheless, are multinational corporations.
T HE RolE of MulTinaTional CoRpoRaTions
Multinational corporations play a key role as engines of economic growth, providing
both international finance and items to trade. To many economic liberals, MNCs are
the vanguard of the liberal order. They are the “embodiment par excellence of the lib-
eral ideal of an interdependent world economy. [They have] taken the integration of
national economies beyond trade and money to the internationalization of production.
For the first time in history, production, marketing, and investment are being or ga nized
on a global scale rather than in terms of isolated national economies.”^4 To liberals,
MNCs are a positive development: economic improvement happens through the most
efficient mechanism. MNCs invest in capital stock worldwide, they move money to
the most efficient markets, and they finance proj ects that industrialize and improve
agricultural output. MNCs are the transmission belt for capital, ideas, and economic
growth. In the liberal ideal, MNCs prefer to act in de pen dently of states; the market
itself will regulate be hav ior. Any abuses of the market by MNCs can be best corrected
by other market actors, or at worst by government regulation.
MNCs take many dif er ent forms and engage in many dif er ent activities:
■ importing and exporting goods and ser vices
■ making significant investments in a foreign country
■ buying and selling licenses in foreign markets
■ engaging in contract manufacturing— permitting a local manufacturer in a for-
eign country to produce their products
■ opening manufacturing facilities or assembly operations in foreign countriesWhat ever the specific form that their business takes, MNCs choose to participate in
international markets for a variety of reasons. They seek to avoid tarif and import