Multinationals in North America

Graham Adams, Jr., is a professor of American history at Mount Allison University in New Brunswick.

The rise of multinational corporations and the evolution of free-trade
blocs have dominated economic life during the last quarter of the 20th
century. In this book, several experts examine the policies and actions
of major international firms that have operated within the context of
the FTA and NAFTA accords.

All the analysts accept the new economic organization of multinationals
and free-trading areas. Unlike some critics, they do not call for repeal
of free trade or for drastic modifications. All tend to agree with
Harvard professor Raymond Vernon that NAFTA represents acceptance by the
leaders of Canada, the United States, and Mexico that “no nation is an
island and that the intertwining of economic destinies is an inescapable
trend.”

Will NAFTA cause thousands of job losses, plant closures, and the
gutting of manufacturing in Canada and United States? Lorraine Eden of
Carleton University declares that NAFTA has not led to any massive
transfers in employment because unit labor costs are actually higher in
Mexico than in the United States. Economist C. Fred Bergsten notes that
Ross Perot’s prediction that a “great sucking sound” from Mexico
would signal an immense draining of jobs and investment from her
northern neighbors simply has not come true. To the contrary, Bergsten
finds that from 1990 to 1993 the United States shifted from a $2-billion
trade deficit with Mexico to an $8-billion surplus. This swing, he
asserts, created a quarter of a million jobs in the United States.

These articles raise more questions than they answer, especially with
regard to social issues. How can we control such mammoth economic
conglomerates? Most writers seem to favor corporate self-restraint aided
by government, but will that serve as effectively as strong state
regulation? Should the destinies of millions be determined by a few
people in boardrooms thousands of miles away? Do we really want a group
of international corporations whose major object is profit to dominate
the world? While a few experts made glancing references to these
problems, far more attention must be directed toward their solution.