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Abstract

This paper locates business support for the North American Free Trade Agreement (NAFTA) and the Caribbean Basin Initiative (CBI) in the context of the internationalization of capital markets and the competitive pressures of the world economy. Multinational corporations which are internationally competitive and trade dependent across various regions of the world economy, tended to support NAFTA and CBI for the trade liberalization provisions. On the other hand. MNCs which are less competitive and trade dependent within regions tended to support NAFTA and CBI for the discriminatory investment provisions. Other firms which are less competitive and tied to the U.S. market tended to oppose NAFTA and CBI.

The corporate coalitions that battled over the terms of the NAFTA and CBI agreements reflect the uneven character of globalization in the world economy. Some firms are reacting to globalization by expanding their international operations and supporting free trade in a variety of contexts. Other firms are regionalizing their operations and lobbying governments to implement discriminatory regional trade agreements to protect them from foreign competition. The future direction of global trade could well depend on the battles amongst these diverse corporate interests.

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Corporate Coalitions and Industrial Restructuring: Explaining Regional Trade Agreements

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