Has Globalization Gone too Far?

Developed nations express growing resistance to foreign takeovers of national enterprises – from Mittal Steel’s bid for Archelor based in Luxembourg to Dubai Ports World plan to take over terminal operations of six US ports. The resistance contradicts WTO proposals from the West that would have allowed foreign investors to establish or acquire any business entity in any country. Developing countries resisted that launch of negotiations in July 2004, and author Nagesh Kumar suggests that the West, now beleaguered over foreign investment, should be “grateful” to emerging economies for forcing the proposals from the table. Dismay over major deals demonstrates that developed nations prefer free trade and foreign investment only when it benefits them. Wealthy countries demand open markets for their products and services, but refuse agricultural products from poor nations. Kumar notes that decisions on foreign takeovers are often based not on rational business reasons but protectionist, sometimes even racist, sentiments. Governments, such as those in France and the US, often block foreign investment for reasons of “national security,” which the Kumar claims has not been defined. The West has developed a selective attitude toward globalization, which is permeating negotiations of the latest Doha Round and could put a damper on worldwide trade. – YaleGlobal