Encounter at Shimoda: Search for a New Pacific Partnership by Herbert Passin

Author:Herbert Passin [Passin, Herbert]
Language: eng
Format: epub
ISBN: 9780429707469
Goodreads: 44598194
Publisher: Routledge
Published: 2019-03-04T00:00:00+00:00

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Taiwan 133 85

Hong Kong 286 139

Indonesia 512 241

South Korea 277 33

Malaysia 307 50

Singapore 33

Philippines 719 74

Thailand 124 91

Others 691 33

Total 3049 779

Source: Y. Tsurumi, “The Multinational Spread of Japanese Firms and Asian Neighbor Reactions,” in The Multinational Corporation and Social Change, D. Apter and L. Goodman eds., Praeger, 1976.

Table 7.5b Ownership of Overseas Subsidiaries by Nationality of Large Parent Firms as of January 1,1971 (in percentages)

what is being transferred and what is being paid for at each stage of the development process will become increasingly important. Flexibility in terms of “fade out” and divestiture agreements, which take into account the changing contribution of local and foreign capital, technology, management, and entrepreneurial resources, would tend to provide more realistic settings for a mutually beneficial, interdependent set of relations in the future. The often used screening of foreign investments should include unbundling and full disclosure procedures, permitting LDCs to shop comparatively rather than accept or reject the “all or nothing” principle as is so frequently the case.

Some of the admitted excesses of the multinational corporation (MNC), ranging from transfer pricing to the payment of unduly high wages to the inappropriateness of imported technology to the underutilization of patents and the over-utilization of domestic credit markets and export-prohibition clauses, are not unrelated to the policy environment existing in many of the countries of the region. Many of these “crimes” are based on insufficient competitive pressure, either with other MNCs or with host-country industry. Foreign investors can be most effective if they are forced to put their energies into building the famous “better mousetraps” and into giving up the “quiet life” of satisfying behavior patterns as the policy regime is shifted to a more competitive, market-oriented one. Evidence from the export-processing zones of Korea and Taiwan as well as from other parts of the developing world indicates that multinationals are quite capable of coming up with appropriate technology and output mixes when pressures exist for them to “scratch around.” Whereas in the Type II countries the “quiet life” is the norm for the large corporations, multinationals also can be expected to behave differently.

The United States can make an effort to facilitate the evolution of a mutually more beneficial relationship and one less fraught with the fictions and frictions of the past. Most important, perhaps, is an effort to move away from the image of a knee-jerk reaction in favor of U.S. multinational citizens abroad, whether they are right or wrong. The Hickenlooper and Gonzalez amendments, even if not always zealously administered by the executive branch, are viewed as only slightly modernized versions of old-fashioned gunboat diplomacy and are equally ineffective. The extensions abroad of domestic antitrust, trading-with-the-enemy legislation and other forms of attempted extraterritoriality represent similarly ineffective and highly offensive instruments. Likewise, there would seem to be little reason to continue to provide U.S. foreign investors automatically with taxpayer-subsidized risk guarantees via OPIC (the Overseas Private Investment Corporation), thus implying the blessings of the U.S. government, without some effort to reassure ourselves

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