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In the postwar period MNCs have acquired a global pres-ence. As one statistic indicates, for most of the postwar period stocks and flows of FDI have grown faster than world income, and sometimes trade, particularly during the 1960s and since the mid-1980s. Stock measures in particular are subject to margins of error because of the difficulties with estimating their growth. Even so, it is indisputable that multinationals have become major players in the world economy: apart from the 1970s and early 1980s, the turnover of the largest 500 companies has grown faster than world output. MNCs now account for the majority of the world¡¯s exports, while sales of foreign affiliates exceed total global exports. Furthermore, as MNCs have grown ,there has been a significant Tran nationalization of production expressed in the emergence of global production and distribution networks.

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Economists¡¯ argument for free trade is that opening up markets to foreign suppliers increases

competition. Without free trade, domestic companies may have enjoyed monopoles or oligopolies(Çó´óÓÚ¹©µÄÊг¡Çé¿ö)that enabled them to keep prices well above marginal costs. Trade liberalization will undermine that market power. Competition should also spur domestic companies to greater efficiency because they will not be able to costs of slackness in higher prices.

In addition, free trade means that firms are no longer limited by the size of their home country, but can sell into bigger markets. In industries where average production costs fall as output increases, producing economies of scale, this means lower costs and prices. In such industries, trade also increases the variety of products on offer.

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Non-tariff barriers include standards to protect health, safety, and product quality. The standards are sometimes used in an unduly stringent or discriminating way in order to restrict trade, but the sheer volume of regulations in this category is a problem in itself. Fruit content regulations for jam way vary so much from country to country that one agricultural specialist says,¡°A jam exporter needs a computer to avoid one or another country¡¯s regulations.¡± Plant and animal quarantine(¼ìÒß)regulations serve an important function, but often are used solely to keep out foreign products. Al-though all countries use standards to some extent, Japan has raised the process to the level of art(¼¼Êõ).Differing standards is one major disagreement between the United States and Japan. American companies are often confronted by