Showing papers in "Foreign Affairs in 1971"

The Multinational Enterprise: Power versus Sovereignty

Abstract: THE extraordinary spread of U.S. enterprises into foreign countries in the last two decades has produced its inevitable aftermath. Though the multinational enterprise as an eco nomic institution seems capable of adding to the world's aggre gate productivity and economic growth, it has generated tensions in foreign countries. As a rule, the tensions are a manifestation of powerful psychic and social needs on the part of ?lite groups in host countries, including the desire for control and status and the desire to avoid a sense of dependence on outsiders. There are several unresolved conflicts. Sovereign states have legitimate goals toward which they try to direct the resources under their command. Any unit of a multinational enterprise, when operating in the territory of a sovereign state, responds not only to those goals but also to a flow of commands from outside, including the commands of the parent and the commands of other sovereigns. As long as the potential clash of interests re mains unsolved, the constructive economic role of the enterprise will be accompanied by destructive political tensions. II

Crisis in U.S. Trade Policy

Abstract: SINCE 1962, U.S. trade policy has been moving steadily away from the liberal trade approach which had charac terized it since 1934 and which has been the objective of every administration since that time. In 1962, the Trade Expansion Act passed the Congress with the largest majority in the history of the trade agreements pro gram and led to the Kennedy Round of trade negotiations. Since 1962, however, the number of U.S. industrial imports subject to quantitative restrictions, including "voluntary restraint" by for eign suppliers, has risen from seven to 67?a number which will shortly exceed the total of any other industrialized country, and whose restrictive impact is undoubtedly greater than the lib eralizing effect of our tariff cuts in the Kennedy Round. And Chairman Wilbur Mills of the Ways and Means Committee? who helped pilot the 1962 law to its overwhelming passage? commented last year that the Trade Expansion Act would have been unlikely to attract 50 votes on the House floor in 1970. The shift has come along an accelerating trend line. In 1964, Congress passed the Meat Import Act?the first legislated import restrictions for a major industry in the postwar period. There were attempts in 1964 and 1965 to negotiate voluntary restraint agreements covering U.S. imports of woolen textiles. The modest trade bill submitted by the Johnson Administration in 1968, whose only significant liberalizing feature was its request for repeal of the American Selling Price system of cus toms valuation (ASP), was never even reported out of the Ways and Means Committee ; and the Administration decided that it had to negotiate voluntary restraint agreements on steel and meat to avoid turning the bill into widespread protectionist legislation. And the Nixon Administration sought to negotiate voluntary restraints on synthetic and woolen textiles throughout 1969 and 1970. The most dramatic evidence of the shift in Congressional and public opinion developed in 1970. The so-called Mills bill, which would have levied quotas on all textile and shoe imports and tariff quotas on two minor products, passed the House of Representatives by a vote of 215 to 165. It would also have

The Instruments of American Foreign Policy

Abstract: THERE are many different ways of conducting a govern ment. In the United States the executive authority is both more formally centralized in the President and more sharply separated from the legislature than in most democracies. This is particularly true of the conduct of foreign affairs, where the authority of the President has been seriously challenged only in those rare instances, such as the Versailles Treaty or the Vietnam war, when he seems to be grossly ignoring or overrid ing the opinions both of the Congress and of the public. In general, he has been free to conduct foreign affairs more or less as he chooses, to use traditional instruments, to set up new ones or to carry on diplomacy from his own hip pocket. There is little use arguing whether or not he has the constitutional right to do so. As our government is organized, he has both the re sponsibility and the power. Critics in or out of the Congress can make things difficult for him, but they can neither conduct for eign affairs themselves nor prevent him from doing so. Of course, a wise President will consult the Congress closely, in fact as well as in form, on matters of major import, which recent Presidents have often foolishly failed to do. Our concern here, however, is with the instruments which Presidents use for the conduct of foreign affairs. Up until the 1930s the instrument was almost always the traditional one, the Secretary and Department of State, except in those not infre quent cases where a strong President, such as Theodore Roose velt and Woodrow Wilson, chose to carry on a particular exer cise in diplomacy himself, sometimes with the help of a personal adviser or emissary. Nevertheless, as late as 1931, President Hoover, though not himself inexperienced in foreign affairs, relied on Secretary Stimson to deal, in so far as the United States was prepared to deal, with the Manchurian crises. Franklin D. Roosevelt, however, just at the moment when the rise to power of ambitious dictators in both Europe and Asia made inevitable much deeper American involvement in foreign affairs, named as Secretary of State, almost entirely for domestic political reasons, an eminent Senator, Cordell Hull, who had