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08 October 1996

Transnational Corporations(1), a refereed journal published three times a year by UNCTAD, provides insights on the economic, legal, social and cultural impacts of transnational corporations (TNCs) in an increasingly global economy and on the policy implications that arise therefrom. The latest issue contains articles on:

Foreign direct investment and the multilateral trading system

Written by Renato Ruggiero, Director-General, World Trade Organization, Geneva, (T: +41 22 739 5111, F: +41 22 739 5762)

There can be no doubt that foreign direct investment (FDI) has joined international trade as one of the primary motors -- some would say the primary motor -- of globalization, that is, the organization of production and supply of goods and services on a global basis. Indeed, in today´s world economy, trade and investment are not merely increasingly complementary but also increasingly inseparable as two sides of the coin of this process of globalization. The aim of this article is to discuss the implications of this development for the future evolution of the multilateral trading system.

Investment policies in multilateral and regional agreements: a comparative analysis

The authors are Thomas L. Brewer, Associate Professor at the School of Business, Georgetown University, Washington D.C. (T: +1 202 944 3750, F: +1 202 944 3762) and Stephen Young, Professor at Strathclyde Business School, University of Strathclyde, Glasgow, United Kingdom (T: +44 141 552 4400, F:+44 141 552 2802)

The objective of this article is to examine issues and alternatives for reform of the international public policy regime for investment. It focuses on a comparative analysis of agreements concerning investment in the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO), as well as the investment policies of two regional agreements -- the North American Free Trade Agreement and the European Energy Charter Treaty. The analysis of these agreements is used as a basis for developing priorities and proposals -- particularly for the Multilateral Agreement on Investment at the OECD and for the agenda of the WTO. The concluding recommendations emphasize the need to give more attention to exceptions to accepted principles such as national treatment, the concerns of developing countries and the combined issues of investment incentives and performance requirements.

Services and the international contestability of markets

By Pierre Sauvé, Principal Administrator, Trade Directorate, OECD, Paris, France (T: +331 4524 7956, F: +331 4524 1941)

This article explores how ongoing analytical work on the international contestability of markets relates to trade in services. It highlights some of the key policy- and rule-making lessons emerging from negotiations under the General Agreement on Trade in Services, noting that the Agreement represented the first true test of multilateral rule-making in an environment of deep economic integration. It identifies some of the "architectural" challenges left outstanding in the services area, particularly as regards the Agreement´s approach to scheduling liberalisation commitments. The article suggests some practical means of making the Agreement more accessible to practitioners, notably through the adoption of a negative list approach to scheduling and the incorporation in the WTO of a horizontal set of rules on investment and the temporary movement of business people. The article, finally, explores the extent to which the Agreement´s built-in agenda of ongoing sectoral negotiations and rule-making initiatives in the areas of subsidies, safeguards and government procurement can further the objective of more internationally contestable services markets.

Foreign direct investment and technology transfer: a case study of FDI in Northeast China

The authors are Ping Lan, post-doctoral Researcher, and Stephen Young, Professor and Head of Department of Marketing, University of Strathclyde, Glasgow, United Kingdom (T: +44 41 552 4400, F: +44 141 552 2802)

Based on empirical research in the city of Dalian in Northeast China, this article explores the contribution of FDI to Chinese firms´ technology development. The technology contribution of transnational corporations was deemed to be from low to moderate, with technology flow dominated by hardware transplants and training in basic operations. The requirement for an innovation-oriented policy regime in the open coastal cities such as Dalian is discussed. By this means, technological upgrading could be facilitated, with FDI in labour- and resource-intensive investments being encouraged in inland areas. A wider recognition of the problems inherent in technology transfer into developing countries like China is necessary.

Also in Transnational Corporations, Volume V.

A research note on methodological issues in the revaluation of foreign direct investment stocks by Christian Bellak and John Cantwell: "Foreign direct investment- how much is it worth? Comment on S.J. Gray and A.M. Rugman", as well as a response by Sidney Gray and Alan Rugman who had expressed their point of view in another research note previously published in the journal.


1. A subscription to Transnational Corporations for one year is US$ 35 (single issues are US$ 15). Requests for subscriptions should be addressed to: United Nations Publications, United Nations, Sales Section, Room DC2-853, New York, NY 10017, United States - T: +1 212 963 3552; F: +1 212 963 3062, or E: publications@un.org or Palais des Nations, 1211 Geneva 10, Switzerland; F: +41 22 917 0027; or to distributors of United Nations publications throughout the world.

For more information, please contact:
Karl P. Sauvant, Chief
Research and Policy Analysis Branch, Division on Investment, Enterprise and Technology
T: +41 22 907 5707
F: +41 22 907 0194
Carine Richard-Van Maele, Press Officer of UNCTAD
T: +41 22 907 5816/28
F: +41 22 907 0043
E: amanda.waxman@unctad.org


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