The October issue of the Survey of Current Business (just out, despite the date) takes apart the US current account, 1982-93, by ownership. Its findings have to call into question a lot of easy generalizations about the globalization of production, which rely heavily on a supposed increase in the amount of intrafirm trade, as putatively borderless multinationals supposedly transfer components from one branch to another located in another country. Specifically, the article reports that transactions within MNCs account for about a third of US goods and services trade. Intrafirm trade accounted for 37% of US goods & services imports in 1993, up from 32% in 1982, reflecting the rise in inward FDI during the 1980s. "However," the authors, Obie G Whichard and Jeffrey H. Lowe, note, "much of this trade simply represented goods imported by U.S. wholesale trade affiliates established by foreign companies to facilitate the distribution of their goods, largely to unaffiliated customers, in the United States." The share of intrafirm trade in U.S. exports, 30%, was exactly the same as it was in 1982 - and these, too, are largely accounted for by the shipment of finished products to distribution affiliates - not components. The relatively unimportant role played by intrafirm procurement is confirmed by the fact that 88-92% of the content of the output of foreign affiliates originated abroad, and 80-84% of the output of U.S. affiliates originated in the U.S. That is, most components are procured locally. U.S. figures on MNCs are probably the best in the world, so this is the best big picture look at multinationalization we have. Doug -- Doug Henwood Left Business Observer 250 W 85 St New York NY 10024-3217 USA +1-212-874-4020 voice +1-212-874-3137 fax email: <[EMAIL PROTECTED]> web: <http://www.panix.com/~dhenwood/LBO_home.html>
