Transnational business, national friction structures and international exchange

Abstract

Two consequences of the internationalization of economic activities that has taken place since the early 1960s have been that, within the international trading system, participant states have become more vulnerable and sensitized to the economic conditions obtaining in other countries; and economic actors have, in general, become more transnational and universal in their orientation and more aware of worldwide business possibilities. Consequently, visible trade flows have been progressively transformed through global raw material sourcing, production location and marketing; and invisible trade has been restructured by global deposit sourcing and lender servicing. Both types of international exchange required extensive external production networks which had to be newly created by international capital transfers and institutional migration. Despite the outward manifestation of these infrastructures, international exchange tensions nevertheless remained because of ‘the continued existence of still mainly nationally based political systems’ and the conflicts of interest and uncertainties created by the asserted extra-territorial orientation of national tax and legal system's, These problems were largely untouched by the harmonization and liberalization processes attempted by industrial nations under the aegis of GATT and other international institutions. As a result, the transnational operations of multinational companies have often had to be channelled to parts of the world where their activities are least frustrated by obstructive interventionist policy in order to secure particular objectives.