Table Of ContentROUTLEDGE LIBRARY EDITIONS:
INTERNATIONAL TRADE POLICY
Volume 12
GLOBAL CORPORATE STRATEGY
AND TRADE POLICY
GLOBAL CORPORATE STRATEGY
AND TRADE POLICY
ALAN RUGMAN AND ALAIN VERBEKE
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LONDON AND NEW YORK
Firstpublishedin1990byRoutledge
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Global Corporate Strategy
and Trade Policy
Alan Rugman and Alain Verbeke
London and New York
First published by Routledge 1990
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
a division of Routledge, Chapman and Hall, Inc.
29 West 35th Street, New York, NY 10001
© 1990 Alan Rugman and Alain Verbeke
Printed in Great Britain
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic,
mechanical, or other means, now known or hereafter invented,
including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from
the publishers.
British Library Cataloguing in Publication Data
Rugman, Alan M.
Global corporate strategy and trade policy
1. Multinational companies. Corporate planning. Effect of
government policies on foreign trade. Foreign trade.
Policies of governments. Effects on corporate planning of
multinational companies
I. Title II. Verbeke, Alain
658.4012
ISBN 0-415--05195-9
Library of Congress Cataloging-in-Publication Data
Rugman, Alan M.
Global corporate strategy and trade policy / Alan Rugman and
Alain Verbeke.
p. cm. - (International business series)
Includes bibliographical references and index.
ISBN 0-415--05195-9
1. International business enterprises-Management. 2. Strategic
planning. 3. Commercial policy. I. Verbeke, Alain. II. Title
III. Series: International business series (London, England)
HD62.4.R84 1990
658.4'012-dc20 90-43471
CIP
Printed and bound in Great Britain by
Biddies Ltd, Guildford and King's Lynn
Contents
List of figures ix
List of tables x
Acknowledgements x1
1 Introduction 1
Triad power and corporate strategy l
Corporate strategy and trade policy 3
Structure of the book 3
2 Corporate strategic management 7
Introduction 7
Corporate strategic management and trade policy 8
The four options for strategic planners 10
Why non-efficiency strategies fail 14
Conclusion 17
3 Trade policy and corporate strategy 19
The relevance of trade policy to corporate strategies 19
Trade policy formulation 19
Corporate influence on trade policy: the 1986
softwood lumber case 23
Problems in the administration of US trade law 27
US trade law implementation: an inefficient outcome 28
Conclusion 30
4 Corporate strategy for trade barriers 31
The Canadian corporate response to US trade policies 31
Corporate strategy and trade policy 32
Corporate strategy and administered protection in this
model 37
V
Contents
Corporate responses in Canada to US-administered
protection 37
The rise of other types of protection in the United States 41
Conclusion 42
Appendix: Data on anti-dumping and countervail actions 43
5 Global corporate strategy and the Free Trade Agreement 49
Sources of competitive advantage 49
Competitive strategies in global industries 50
An application to Canada-US free trade 54
Surveys and conclusion 63
6 Trade and industrial policy in the triad 65
Introduction: trade policy in the triad 65
The assessment of international trade strategies 66
The US trade deficit 68
A classification of non-free trade policies 69
US trade policy 75
Japanese trade policy 78
Trade policy in the EC 80
Trade policy for the NICs 84
Conclusion 84
7 Globalization and national responsiveness 86
Corporate strategies for Europe 1992 86
The significance of sovereignty and integration 90
Investment and the Free Trade Agreement 93
The foreign ownership issue 96
Economic nationalism, free trade and triad power 99
Conclusion 101
8 An industrial policy for a small open economy 102
Introduction: trade and industrial policy 102
Optimal trade and industrial policy in a small open
economy 102
Building a model of trade and industrial policy 104
A strategic model of industrial policies 105
Industrial policy, entry barriers and small firms 110
Industrial policy and innovation 111
The issue of industrial targeting 114
Industrial policy and footloose manufacturing industries 116
Conclusion 117
vi
Contents
9 Industrial policy and global competition: Ontario's
experience 119
The creation of efficient industrial policies 119
Industrial policy and global competition 122
The key objective: indigenous multinationals 123
Free trade and global strategy 124
An assessment of the Premier's Council Report 124
A model of the nature of industrial policy 126
The fourteen recommendations reviewed 128
Conclusion 135
10 Conclusion 137
The global economy and efficient management 137
Efficiency versus shelter 138
Sovereignty and corporate strategy 140
Notes 142
Bibliography 150
Name index 159
Company index 161
Subject index 163
vii
