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."
