Abstract:
This paper analyses some of the occurrences of economic protectionism against M&A in Europe and North America. It attempts to rationalise the protectionist actions taken by countries within these continents by linking the causes of protectionism to the current wider issues in international business. This paper finds that there are large differences in economic protectionism in Europe and North America, but these differences are due to the different political contexts of these regions. Further study could establish clearer patterns in economic nationalism.
Introduction:
‘Economic protectionism', or ‘economic nationalism', as it is sometimes called, has been a challenge facing multi-national corporations (MNCs) for a long time, in the form of import tariffs, and quotas. However, recent events have a different definition of economic protectionism, in the form of government intervention to block M&A deals.
Two examples of this is the French government listing Danone as a strategic industry in order to prevent its acquirement by PepsiCo , and the US Congressional opposition to a bid by C.N.O.O.C. for Unocal .
This issue has much wider international business importance, for example, the case of Spain trying to prevent Endesa being acquired by Germany's E.On shows how economic protectionism between EU member states is undermining the aim of the EU in encouraging the free movement of capital .
This paper analyses the prevented deals already mentioned, and others, in order to understand why the governments take these interventionist actions, and what the differences are between European and North American approaches to economic protectionism. Because of the FDI policy differences of the EU and NAFTA , it would be natural to assume differences in the approaches towards economic protection of governments of EU and NAFTA member countries.
[...] Overall, this shows that North American economic protection is very different on a national level, with the U.S. and Canada having very different policies Europe The French reaction to the speculation that PepsiCo were interested in acquiring Danone, the food company, was to introduce strict FDI restrictions on 11 sectors which were deemed “strategic industries”[18]. The EU warned against “disguised protectionism”[19], but the situation took a turn for the worse when France blocked the takeover of Electrabel by Italy's E.N.E.L. [...]
[...] There is overall a lack of theory about the type of economic protectionism discussed in this paper; most searches for protectionism theory return results about topics such as import tarrifs and quotas. Gilpin's definition of economic nationalism is very concise: central idea is that economic activities are and should be subordinate to the goal of state building and the interest of the state”[27]. The main idea here is that of self-interest. For example, France's ‘national champions' which were looked at in section are not necessarily optimal as far as economics are concerned, but they certainly represent “defending France, and all things French”, as de Villepin remarked[28] In saying that economic nationalism lead to distortions in the ‘natural' patterns of trade”, Helleiner opens up a new set of issues. [...]
[...] "Fears of Foreign Ownership: The Old Face of Economic Nationalism." p168-169 Ibid Institute for International Economics. "Us-China Trade Disputes, Preview Chapter The Cnooc Case." p50 Institute for International Economics. p53 Byrne, p879 Byrne, p849 Institute for International Economics, p49 Baum, Daniel J. The Banks of Canada in the Commonwealth Caribbean. p137 Government of Canada. "Financial Holding Companies Bill C-8 and New Options for Financial Conglomerates." Canadian Community Reinvestment Coalition. "Ccrc Proposals Vs. Bill 37." [17]Castaldo, Joe. "Is Canada Losing Control?" PINR Economic Brief: French Protectionism Ibid. [...]
[...] "Is Canada Losing Control?" Canadian Business 80, no (2007) Canadian Community Reinvestment Coalition. "Ccrc Proposals Vs. Bill C-37." http://www.cancrc.org/english/recomm07.html Dunning, John H., ed. Governments, Globalization, and International Business. Oxford: Oxford University Press EU Commission. "The Free Movement of Capital." http://ec.europa.eu/internal_market/capital/index_en.htm. Gilpin, Robert, and Jean M. Gilpin. The Political Economy of International Relations. Princeton ; Oxford: Princeton University Press Government of Canada. "Financial Holding Companies Bill C-8 and New Options for Financial Conglomerates." http://dsp-psd.pwgsc.gc.ca/Collection- R/LoPBdP/BP/prb0016-e.htm. Helleiner, Eric, and Andreas Pickel. Economic Nationalism in a Globalizing World, Cornell Studies in Political Economy. [...]
[...] In the introduction to the paper, it was predicted that the continental differences in protectionism would be a product of different FDI rules in the EU and NAFTA regions. The analysis in section 2 has demonstrated that the causes of economic protection are more complex, and often vary on a case-to-case basis, such as creating national champions, or even retaliation to another country's economic protection. Because of the recent EU treaty rejection by France and the Netherlands, the last thing the EU needs is an internal power struggle between its member states, yet that is exactly what economic protectionism provides. [...]
APA Style reference
For your bibliographyOnline reading
with our online readerContent validated
by our reading committee
