It’s Getting Serious
http://www.msnbc.com/news/892711.asp?0cv=CB30
Only a few months ago, anti-Americanism
didn’t look like a real threat to American business abroad or to the U.S.-led
world trade system. Now I’m not so sure
By Jeffrey E. Garten
NEWSWEEK
Excerpt:
“I didn’t hear much about another issue, which nevertheless is
worrisome—the possibility that foreign-policy tensions could hurt U.S.
companies by undermining U.S. international economic strategies. It is not so
farfetched to think that political tensions relating to Iraq could spill over
and undercut U.S. positions in the Doha trade talks, in efforts to harmonize
accounting standards or antitrust regulations, or in International Monetary
Fund deliberations.
We are unlikely to see massive boycotts of American
companies, although the possibility can’t be totally eliminated. But there
could be a long, slow erosion of the position of U.S. multinationals. For example,
in nations where governments still have a say in the awarding of big business
contracts, such as China or Saudi Arabia, fewer could go to American companies.
In Europe, the best and the brightest local talent might find a stigma attached
to U.S. firms and seek employment elsewhere. The cost of physical
security could become a competitive disadvantage for U.S. multinationals.
The most vulnerable American firms could be
consumer-product companies. In December, a bombing at a McDonald’s in Indonesia
killed three people, and brands like Nike and Coca-Cola could also be targets.
There is a particular risk in industries where competition is brisk and the
symbolism of being American is high—this risk applies to companies like Boeing,
which have rivals such as Airbus, or General Motors, which vies with Toyota.
The corporations that have least to fear may be financial firms like Goldman
Sachs or Citigroup, which so clearly dominate the global landscape.
If overseas American business is hurt, the U.S.
economy won’t be immune. At the end of 2001, American multinationals had invested more
than $2.3 trillion abroad, not counting stocks and bonds. Many have become
dependent on overseas markets for more than 30 percent of their revenue. American
businesses have become central to global supply chains that service
the United States itself; more than 25 percent of the products America imports
come from the foreign subsidiaries of U.S. firms. We will never
know the cost of American companies’ deciding not to invest abroad or
not to expand because of a perceived hostile environment overseas.
When all is said and done, two things worry me most. First is the
changing nature of anti-Americanism itself. Dominique Moisi, a respected French
commentator, told me that there used to be widespread
public resistance to what America did, but that today there is an objection to
what America is. Perhaps this perspective is too French, but it contains an
important warning about the complexity and depth of foreign antipathy toward
the United States. In contrast to the past, today’s anti-Americanism isn’t
propelled just by leftist politicians or intellectual elites but encompasses a
broader spectrum of society. In the Islamic world,
anti-Americanism is used as a distraction for deep-seated economic and social
problems. In Europe, it reflects frustration and resentment about the
Continent’s political impotence. Especially in Latin America, U.S. firms could
become increasingly frequent targets for the millions of people who feel left
out of the recent surge of trade and investment around the world. As Prof.
Francis Fukuyama of Johns Hopkins University has written, there is a risk
today that opposition to American policies could become the chief passion in
global politics.
My second major concern is the potential breakdown
in the American-led multilateral system itself—a system that is highly
supportive of American business and rests on wide acceptance of
American foreign-policy goals. If the current paralysis of
NATO and the United Nations signals an end to consensus about the U.S. role on
the world stage, then all bets are off on the prospects for American business.
When I asked William Meyers, president of Case Mexico and the American Chamber
of Commerce there, about the impact of anti-Americanism on U.S. firms south of
the border, he said, “Politics is politics and business is business, and the
two don’t mix.” Looking at the fate of American companies over the next decade,
I respectfully beg to differ.
Garten is dean of the Yale School of Management
and author of “The Politics of Fortune: A New Agenda for Business Leaders.”
