Is it reasonable to expect that international companies should follow American norms and values when they do business in the U.S.?
I think this is a highly important question, if we shape the scope a little bit:
Clearly, market access requires some technical standardization to ensure fair competition and consumer protection. That's usually done in the context of free trade treaties. And of course, doing business is allowed as long al local law is respected - whatever business men think about it.
A somewhat less obvious question is: Should investors share the values of the countries in which they do business? I tend to deny this. First of all, I doubt that there is sufficient consensus about values in liberal societies that could be a point of reference. Which values would you consider to be "american" in contrast to say, "european" values? And even if you find some, I doubt it would matter for doing business.
However, free trade is in itself based on a legal framework. I consider the idea of reciprocity a sound approach when it comes to business. Without having a precise idea of how to enforce it, I would welcome attempts to block investors from business that profit from protectionism in their country of origin. That is, free access to business should be granted only if similar rules apply to both sides.
I ask this question in the context of the current trade war between the U.S. and China. I agree that reciprocity is an important principle. The deeper question is the "neutrality" of the rules for free trade. Following North, we recognize the rules of the game (institutions) are critical. The question is: who gets to write the rules?
Dear Joseph Tham , I had the same practical example in mind, when I read your question.
And my answer is, that reciprocity as a guiding principle allows to establish rules that can be seen as fair. In the application to real world trade, it may be difficult to achieve exact reciprocity. But in case of disputes, reciprocity helps to find a solution that in principal should be agreeable to all.
In conducting business in the US, Chinese businessmen deal with their US counterpart. These businessmen live by their own set of value which is dissimilar with the value of the Chinese or the US. When these businessmen deal with each other, their set of business value is stronger than their set of national value. Accordingly, the Chinese businessmen do not need to share the value of the US, and vise versa. This set of business value is not only regarded by businessmen of both countries, but also by international trade community. It becomes a set of global value for doing business.
In the context of the current trade war, businessmen of the U.S. and China are the casualties. Both parties understand that nobody will come out of this war unhurt. Hence, with their shared set of global business value, they keep communication open between them. They coordinate simultaneous effort in lobbying both governments to end this war as soon as possible.
I agree that American businessmen are not just agents of the US government. I hesitate to apply that statement symmetrically to Chinese businessmen. Therefore, I wouldn't consider today's trade situation as symmetric or reciprocal.
- Badges
- Science topic
- Similar topics
- Economics