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By Max Kohnstamm

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Extra info for A Nation Writ Large?: Foreign-Policy Problems before the European Community

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This meant that the trade I GNP ratio of the great trading nations has, on average, roughly doubled since the war - evidence that the division of labour was working and barriers between nations had come down. We are certainly richer, and live in greater harmony with our partners, than we would have done without the great movement towards liberalisation which has marked the past quarter of a century. But a sign of the weakening of this movement is that trade increa:ses no longer outstripped those of production in recent years.

Put differently, the MNC, unlike the national firm, is no longer merely the object of economic policy. e. it pursues long-term strategies which affect sizeable portions of economic activity. e. the production of US, Japanese and European foreign affiliates, may amount to 450 billion dollars. If we add to this the value of the home production of these firms, and assume that approximately half this amount represents added value we are approaching an order of magnitude somewhere between the GNP of the Community and Japan.

Yet this concept has little currency in the Community, and its responsibility is still too often conceived in regional terms. Largely in reaction to the experiences of the thirties, the founders of the post-war system pursued two objectives. One was economic: to achieve maximum welfare through the international division of labour. The other was political: to avoid a fragmented world, where everybody worked against everybody else's interest, a world without order, a world of war. Neither of these necessities seems to be clearly or strongly enough felt today to be a decisive and compelling impetus to action.

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