Business and Corporate Law
After World War II, the push for a global economy led to the creation and development of three important transnational organizations: the International Bank for Reconstruction and Development (commonly known as the World Bank), the International Monetary Fund (IMF) and the General Agreement on Tariffs and Trade (GATT). The three agencies together, although formally designated as special agencies of the United Nations (UN), are commonly referred to as the "Bretton Woods" institutions, after a meeting of 44 nations in Bretton Woods, New Hampshire in July of 1944, to reach agreement on the future of global economy. Together and separately, they intended to address such global issues as growth rates of independent countries, expansion of exports, increased value of exports, attraction of new foreign investment, and the ability to repay debt.
However, in reality, to attract foreign investors, governments often suppressed union organizing to hold down wages, benefits and labor standards. They have given tax breaks and subsidies to foreign corporations and slackened environmental regulations. Falling prices for export commodities, increased demand for manufactured imports resulting from reduced tariff barriers, and profit repatriation by foreign investors have resulted in continuing trade deficits for most countries. In 1992, low-income countries' excess of imports over exports increased from $6.5 billion to almost $35 billion. In 1993, the United States executed the controversial North American Free Trade Agreement (NAFTA) addressing the sharing of labor and resources between the U.S., Canada and Mexico. Most treaties and compacts also contain language incorporating "the most favored nation" clause guaranteeing reciprocal commercial concessions between covenanting nations. Behind the scenes of all this international economic reform and redress are transnational corporations.
On 1 January 1995, a new global entity, the World Trade Organization (WTO) was created by the GATT. The WTO essentially represents the world's highest judicial and legislative body for the adjudication and enforcement of substantive agreements relating to international trade and commerce.
Although the GATT-WTO is an agreement among countries, in truth, corporate membership on its private panels far exceeds that of private interests. A 1991 study released by the Public Citizen's Congress Watch found that of 111 members of the three main trade advisory committees, only two represented labor unions. There was one unfilled seat for an environmental advocacy organization, and there were no consumer representatives. In sharp contrast, corporate interests were well represented, filling some 90-seats with representatives from such giants as IBM, General Motors, Dow Chemical, AT&T, Bethlehem Steel, Time-Warner, 3M, Bank America, Corning, American Express, Mobil, Amoco and Hewlett-Packard. Of the 92 corporate representatives on the three advisory panels, roughly one-third of them had been assessed more than $12 million in fines by the U.S. Environmental Protection Agency (EPA). These same corporations had collectively contributed nearly one million dollars in a failed attempt to defeat California's Safe Drinking Water and Toxics Enforcement Act, and put out another two million dollars to successfully defeat another California initiative called Big Green, which, among other things, would have imposed tighter standards for the discharge of toxic chemicals. Another example is in the tobacco industry. When Taiwan was working on a law to restrict cigarette sales, advertising and public smoking areas, the U.S. trade representative responded by threatening to call for trade sanctions against Taiwan.
When such a concern is brought before the WTO, the contending parties present their case in a secret hearing before a panel of three experts whose identities remain confidential. There is no provision for the presentation of alternative views, such as amicus (friend of the court) briefs, from nongovernmental organizations, unless the panel chooses to solicit them. The WTO has the authority to recommend trade sanctions, penalties, or both, which are voted upon by the membership. The downside to this is that it must be remembered that the WTO is a trade organization, and its mandate is to eliminate barriers to international trade and investment, a shot in the arm for transnational corporations.
Going into the twenty-first century, transnational corporations and business conflicts of interest remain global priorities. To be sure, the creation of business profit is necessarily predicated upon the creation of correlative debt. The interrelationship and interdependency between world trade and corporate profit all but wholly controls the global economy. International manipulation of trade barriers, tariffs, bans, treaties and other regulatory red tape continues to warrant review and control. Of continued concern is the ability of corporations to use their economic power to drive out competitors from the market, to absorb competitors by merger and acquisition, or to form alliances with competitors to control pricing and market territory. Federal anti-trust laws have limited power on the international front.
One area requiring increased attention is that of intellectual property rights--copyrights, patents and trademarks. U.S. companies have successfully pursued extended patent protection for all genetically-engineered organisms, from microorganisms and seeds, up to plant and animals (excluding only genetically-engineered humans). By patenting the processes by which genes are inserted into a species of seeds, a few corporations have obtained monopoly rights over genetic research. Proponents argue that such control will aggressively promote agricultural genetic research and improve global food security. Critics argue that it will prevent private research among farmers and businesses not working for the patent-holder, effectively preventing the growth of independent seed stocks without the payment of royalties.
The electronic transmission of information transnationally raises numerous concerns too complex for discussion at this time. It is sufficient to say that the future of a global economy is dependent upon the communication of information from forum to forum, most of it through private business venture. Continued global effort toward uniformity of regulation, in combination with the establishment of enforcement powers, is key to the future of business around the world.
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