Monitoring Policy Making at the United Nations |
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Gerard Piel: "Globalopolies" Globalopolies
Gerard Piel
Nation
May 18, 1992
Last year, the Bush Administration had the privilege of choosing the administrative Under Secretary General of the United Nations -- apparently on the strength of a promise to Secretary Boutros Boutros-Ghali that this country would do something about the $555 million in dues it owes to the world body. Upon his appointment, Richard Thornburgh, the abrasive former Attorney General, secured the shutdown of the United Nations Center on Transnational Corporations [see Ian Williams, "Why the Right Loves the U.N.." April 13]. Having carried the deregulation of the U.S. economy to the limit of present political practicability, the White House has turned to making the world economy safe for its industrial sponsors.The Center on Transnational Corporations was created by the U.N. Economic and Social Council (Ecosoc) in 1974, when OPEC had administered the first oil shock and the Group of 77 developing countries was demanding that the industrial world join it in creating a new international economic order.
The first assignment of the C.T.C. was to gather facts. Eventually it established that, as of 1985, the 350 largest transnational corporations, about half of them based in the United States, had combined sales of $2.7 trillion. That was one-third of the combined gross national product of the industrial market economies and was larger by several hundred billion than the combined G.N.P. of all the developing countries, including China.
These corporations are household names around the world: G.M. (then the largest), Exxon (second largest) and I.B.M.; British Petroleum, B.A.T. Industries and Imperial Chemicals; Elf Aquitaine, Peugeot and St. Gobain; Daimler-Benz, Siemens and Hoechst; N.E.C, Sony and Honda; Philips, Asea-Brown Boveri and Electrolux -- the last three based in the Netherlands, Switzerland and Sweden, respectively, economies too small to contain them.
The C.T.C. bookkeepers found that whatever their country of domicile each year these corporations were doing an increasing percentage of their business outside that country. Some were making more of their sales, even more of their product and most of their profit in other countries. Hence their designation as transnational corporations.
Recruiting management from their overseas subsidiaries and finding shareholders around the world, the transnationals have been losing, some deliberately shedding, their national identities. These increasingly stateless entities recognize the sovereignty of nation-states for reasons of their own choosing. They buy raw materials, locate plants, hire labor, make sales, charge costs, report profits, pay taxes and submit to jurisdiction in and among nations in accordance with the comparative advantage conveyed by their always mobile capital.
Competition among the transnationals in the world market turns on their relative control of market forces and their choice of global strategy. They may opt for profit in one market and for growth in the next one. They may choose as well not to compete but to divide the world market by implicit or explicit understanding.
In the "newly industrializing countries," celebrated as examples of growth by the market process, transnational corporations do a considerable percentage of the total industrial output -- according to C.T.C. studies, 33 percent of Argentina's, 44 percent of Brazil's, 39 percent of Mexico's. On their own books, as internal transactions, they carry as much as one-quarter of all world trade.
It was enough for transnational C.E.O.s to suffer such invasion of privacy. Matters began early, however, to go beyond fact-finding. Disquiet at the ascendant power of these corporations began to excite international efforts to write codes of conduct -- for example, to restrain the promotion of Nestle and its competitors of breast-milk substitutes in the shanty-towns around the megacities of the developing countries -- that might follow them across national boundaries. As long ago as 1977 an intergovernmental working group, convened by Ecosoc over the objections of the industrial countries, began negotiating a comprehensive code, with the C.T.C. serving as think tank. A draft code was submitted in 1982 with disputed issues spelled out in bracketed alternative formulations, one alternative supplied by the Group of 77, the other by negotiators for the transnational corporations disguised as delegates of their country of domicile.
They were deadlocked until preparations for the U.N. Conference on Environment and Development -- the Earth Summit, to be held in Rio in June -- brought another vote in Ecosoc. This time C.T.C. was ordered to prepare recommendations for the regulation of the transnationals, to be agreed upon and issued from the summit.
At that juncture, the Bush Administration appointed Thornburgh, who eliminated the C.T.C., effectively ending the threat of a code of conduct for the transnational corporations -- and the embarrassment of a debate at the summit in Brazil about their arrogance of power.
