| The United States is the home -country for | | | | much concern by trade unions that they will |
| the largest amounts of foreign licensing and | | | | undermine through political means the |
| direct investment. Therefore, its policies | | | | sovereignty of nation-states. The foremost |
| understandably arouse some of the major trade | | | | concern is that an MNE will be used as a |
| unions of such outward moments. One of these | | | | foreign-policy instrument of its home-country |
| critics is organized labor, which argues that | | | | government. The fact that companies depend |
| foreign production often displaces what would | | | | primarily on their home countries is |
| otherwise be US production. For example, big | | | | illustrated by the realization that from the |
| corporations have been criticized because | | | | 100 largest companies in the Fortune 500 |
| they decided to shift some or all of their | | | | list, only 18 have a majority of their assets |
| production to less costly countries, such as | | | | outside their home-country and very few have |
| Mexico, because of the NAFTA agreement. Trade | | | | a foreigner on their executive board. These |
| unions also cite many examples of highly | | | | companies are most internationalized in terms |
| advanced technology that has been at least | | | | of their sales; however, fewer than half |
| partially developed through governmental | | | | generate more than half of their sales |
| contracts and then transferred abroad. An | | | | outside their home markets. Because the |
| example is Boeing's transfer of aerospace | | | | home-countries of most MNEs are industrial |
| technology to China to produce aircraft | | | | ones, it is understandable that this concern |
| parts. According to trade unions, if Boeing | | | | is taken most seriously in less-developed |
| did not transfer the technology, China would | | | | countries (LDCs). But it is not restricted to |
| purchase the products in United States, thus | | | | them. |
| increasing U.S. employment and output. | | | | |
| | | | Two other sovereignty issues are raised less |
| Closely related to the question of job loss | | | | frequently. One is that the MNE may become |
| is the question of whether the outsourcing of | | | | independent of both the home and host |
| production puts downward pressure on wages in | | | | countries, making it difficult for either |
| the home country. On the other hand, there is | | | | country to take actions considered being in |
| anecdotal evidence that it does. For example, | | | | its best interests. The second is that the |
| computer programmers in the United Kingdom, | | | | MNE might become so dependent on foreign |
| make three to six times, the monthly salary | | | | operations that the host country can use it |
| of programmers in India. So the possibility | | | | as a foreign-policy instrument against its |
| of moving more work to India has caused a | | | | home country or another country. Under this |
| recent drag on the real wages of U.K. | | | | sphere of influence, trade unions exercise |
| programmers. On the other hand, there is | | | | trade control, by enforcing trade |
| evidence that moves by companies to | | | | restrictions, antitrust laws, and key sector |
| lower-wage countries increase the overall | | | | control measures or even by forming |
| home-country demand and wages for skilled | | | | state-owned enterprises. For example, much |
| labor. This is because the cost savings from | | | | have been said about the US government's |
| producing abroad increase demand for the | | | | attempt to apply its trading with the Enemy |
| products produced abroad, such as Nike shoes, | | | | Act to foreign subsidiaries of US companies, |
| thus increasing the need for Nike to hire | | | | in order to keep them from selling to certain |
| more managerial personnel in the United | | | | unfriendly countries. Such measures, that |
| States. | | | | restrict free trade and enhance the threat of |
| | | | reducing gains, drive MNEs either to accept |
| Moreover, due to the size of many | | | | the new roles of the global game or in most |
| multinational enterprises (MNEs), there is | | | | cases to oppose it. |