The ‘New Protectionism’: Industrial Policy Barriers to Cross-Border Mergers and Acquisitions

Abstract

First, this paper introduces a conceptual framework of analysis steeped in the statist approach to political economy — specifically, of a transformational view of the state. Second, a review of the status of competition law and policy in the World Trade Organization agreement focuses on its critical role in trade and competition policy across jurisdictions. Third, an explanation of the fundamental socio-economic philosophies embodied in the comparative national development of domestic competition law and policy, and its often conflicting role in national industrial policy and the cross-border merger and acquisition (M&A) review process, is undertaken. Fourth, predicated on the preceding two sections, a discussion ensues on the international business strategy threats inherent in a new trade ‘protectionist’ environment that focuses on an industrial policy which includes the criteria of competition law and policy (including the complications inherent in bilateral and multilateral competition policy review), national security policy, economic competitiveness policy, and cultural policy effects on cross-border M&A activity. In this paper's concluding section, arguments center on the present status and future of the ‘murky protectionism’ found in the international political economy environment of industrial policy now confronting cross-border M&A business strategy decisions, and its longer-term implications for encouraging foreign direct investment.