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Davidson, R. Actors Beyond Borders? Transnational Actors in the Asia Pacific

In Michael K. Connors, Remy Davison, Jorn Dosch (eds.) The New Global Politics of the Asia Pacific, 2012: Routledge, Oxford, UK, pp. 225-247.

Rmy Davison
Ph.D. at the University of Melbourne Chair in Politics & Economics in the Department of Politics & International Relations at Monash University; Associate Director of the Monash European and EU Centre. a Global Conflict Expert for the United Nations

Notes:
Do international actors challenge the authority of state as the main actor of international relations? o Realists: TNA are second tier actors in intl relations; intervening variables in their ability to change state behaviour o Liberals: TNAs are an integral part of the structure of international politics; they redefine the boundaries of political community o TNA = trans-national actor TNC = Trans-national corporation (=MNC) NGOs IOs? Mostly IGOs, and thus state based actors They do not usually operate in the same levels where the international politics take place. They merely overflow there. They form relations across state boundaries, rather than in between. 225 TNAs operate across national borders, rather than globally; often regionally based Labour unions, industrial groups, media and environment lobbyists, private citizens, business enterprises, religious groups, terrorist organizations TNCs emerged as a route to national political power in the post-Cold War era o Powerful locomotives of regional economic integration in the Asia-Pacific o Causes multiple interdependencies o Asia-Pacific: demands of TNAs shape to a large extend domestic labour regimes Economies often export oriented; friendly to FDA At the same time implementation of working conditions norms (ILO) and human rights norms (UNESCO; ACEIU) remains weak Influence of TNA in strong and weak states o weak states Southeast Asia o strong states Northeast Asia: Japans keiretsu networks, Dengs China, Parks Korea o Thesis: The weaker states are, the more susceptible they are to influence by rent seekers national lobbies, TNAs, o Northeast Asia states and TNAs: China: Limits foreign ownership to 50% Japan: Unofficial policies aimed at reduction of FDA

simon.fiala@seznam.cz But, it is as the economies are opening and democratizing, it is becoming difficult to regulate the influence of TNAs o Southeast Asia states and TNAs: Weak governments open to rent-seekers (with the exception of Singapore) Crony capitalism, state capture, unlikely to achieve allocative efficiency Easily permeable by influential TNAs, interest groups, lobbies Transnational corporations o MNC have developed considerable politico-economic influence; difficult to constrain (although OECD has developed guidelines) o MNC most often aligned to a certain state (e.g. Mitsubishi, GM, ) 90% of F500 US based; Jap: 71, China: 46, FR: 39, GE: 37, UK: 29 (2010) Chinese MNCs tend to be strong in overall assets, but weaker in foreign investment o In monetary terms big MNCs are often stronger than small states But sales and assets do not necessarily make a reliable picture of companys standing; TNCs collapse, merge, get acquired o State-firm nexus business-government networks o The leverage a firm gets depends on its position with regard to the government and its competition Selective FDI policies exercised by strong states o Increasing dependence on TNAs among East Asian countries in the 90s Many Asian TNCs acquired by Western rivals during the Japanese hansei recession and the 1997 AFC Transnational investment in the Pacific Asia o FDI / FPI FDI Foreign direct investment: direct equity to firms or plants FPI portfolio: Private or corporate inv. in stocks, bonds, derivatives o 1980s mainly M&A (mergers and acquisitions) buying competitors out to increase its presence on the global markets; 1990s increasing sub-contracting o China as the primary destination of FDA by TNCs (the largest recipient in the world) Inbound FDI 120bn USD, outbound 60bn in 2011 o TNCs driving financial, business and market integration Extraordinary growth in FDI/FPI between the 1980s and 1997 Vulnerability to shocks, conductors of the spread of crises o TNCs particularly influential in knowledge-intensive sectors States compete over allocation of FDI for manufacturing; TNC offer technology transfers, push for trademark enforcement through IGOs and NGOs (such as WTO) Asian states often perform as hosts for manufacturing, designs made in core states o TNCs vote with their feet threat to move away if certain conditions are not met Taxation, environmental conditions, labour relations Transnational NGOs/civil society actors o Steady increase of native and transnational NGOs in the Pacific Asia o TNGO = NGOs facilitating cross border interactions between civil society actors o TNGO bypass states and directly search for alliances outside to put pressure on their governments 2

simon.fiala@seznam.cz Many governments now prefer to facilitate Foreign Aid via their NGOs interconnected E.g. Japan: Ministry of Foreign Affairs channels funds to semi-independent NGOs, composed of civil society and business experts. These deliver aid and respond to Overseas Development Agency (gov.) Cooperation of NGOs with UN agencies (WFP, WHO, UNESCO) o NGOs source of leverage power of arguments, intelligence, strategic alliances o Economic policy making The resistance to WTO policies Concerted refusal of OECDs MAI o Environmental activism Asia Pacifics ENGOs meeting in Bangkok in 1991: support for the Kyoto protocol Limited impact on states policies Dissemination of ecological sensitivity, meeting grassroots sentiment arising from the concentration of pollution-intensive industries o Labour conditions Push towards adoption of ILO work standards (so far unsuccessful in most East Asian countries) Conclusion o TNAs influence international politics, but rather than as conventional actor, they tend to overflow into policymaking levels East Asian economies profoundly dependent on the activities of TNCs; countries were forced to undergo structural reforms, macro and micro economic changes, trade liberalization TNCs often have very strong influence on policies, but their focus tends to be industry/sector/issue specific TNCs and NGOs sometimes have a common goal, but often follow contradictory paths; often they pit against each other TNC/NGO activities often map onto activities of governments form alliances Activities of TNAs often constrain state policies and erode state autonomy o The actual degree of influence of TNA depends on the distribution of resources and interests among actors (governments, NGOs, TNCs) and their strategic positions While TNAs are not directly responsible for forming policies, they exert considerable degree of influence (direct and indirect) over their development o