376 Explaining Business Support for Regional Trade Agreements
in specific institutional contexts, such as the GATT talks, U.S. bilateral negotiations
with foreign governments, and multilateral organizations such as the World Bank
and the IMF (International Monetary Fund). The most notable multilateralists
include banking and service firms that have numerous financial and trade interests
connected to open markets.
The top Fortune 500 U.S.-based banks dramatically expanded their overseas
lending throughout the 1970s and 1980s to both foreign governments and firms.
Bankers have been consistent proponents of multilateralist policies in negotiations
with less-developed countries over terms of debt repayment. In addition, bankers
have promoted U.S. policies toward Europe designed to maximize trade and foreign
investment. Bankers are not as subject to the limitations of sectoral politics as are
other firms, since their capital is more fluid and their interests are tied to a wide
range of investments in foreign governments and private firms. As a result, bankers
have consistently advocated a commitment to multilateralism consistent with their
varied interests in collecting government debts and reaping a return on investments
in foreign and U.S.-based multinationals.
With those general observations as a starting point, it must be said that not all
bankers will be vigorous proponents of multilateralism. Bankers will be more
likely to support multilateralism if they exhibit the following characteristics: (1)
commercial banks that are thoroughly multinational in character, with loans dispersed
around the world to both foreign governments and foreign firms; (2) investment
banks linked to multinational firms heavily dependent on foreign trade relative to
foreign investment; and (3) bankers ideologically committed to multilateralism as
a means to facilitate debt repayment from governments in the less-developed world.
The fact that not all bankers will be committed to multilateralism weakens the
potential free trade coalition. In fact, a striking development that may illuminate
future trade patterns is the extent to which multilateralists in the banking community
have been increasingly isolated from other multinational firms in recent decades,
as support for multilateralism has steadily eroded. The only context in which a
wide range of multinational firms have been able to coalesce around a trade
agreement has been the case of NAFTA, where such diffuse organizations as the
Chambers of Commerce, the National Association of Manufacturers, and the
Business Advisory Council have taken strong positions in favor of the agreement.
However, as I have argued, the extent of interest group agreement around NAFTA
is a product of the regional nature of the agreement, which attracts different
multinationals for different reasons. While multilateralists see it as an important
step for reinvigorating GATT, regionalists view it as additional leverage against
foreign competition. The likelihood of such a powerful free trade coalition emerging
in another, nonregional context is minimal at best. What is equally interesting is
that, even with such a high degree of unity in the corporate community over
NAFTA, the agreement is politically divisive, with nationalists being led by the
unlikely bedfellows of organized labor and Ross Perot in opposing the accord. If,
in fact, multilateralism is, in part, the product of interest group pressure, then the
future for the global trading regime looks increasingly shaky in the 1990s.