TEXT B Countries at all levels of
economic development face a similar challenge: to make their industries
competitive in an increasingly integrated global economy. Despite sharing the
same overall goal, though, countries face distinctive geographical issues in
ensuring that their industries compete effectively. Industries in relatively
developed countries must protect their markets from new competitors. Countries
once governed or still governed by communist parties must prepare their
industries to compete in a global market-driven economy. Developing countries of
Africa, Asia, and Latin America must identify new markets and sources of revenue
to generate industrial growth. Competition among blocs
Industrial competition in the relatively developed world increasingly takes
place among blocs of countries. Countries within three groups—North America,
Western Europe, and East Asia—cooperate more extensively with each other but
compete against the other two regions to promote industrial growth.
In North America, the United States and Canada have eliminated virtually
all trade barriers, while similar efforts have been made among the members of
the European Community. Cooperation is less extensive in East Asia, where
Japanese industries tend to set the lead in exporting industrial goods to other
countries. The free movement of most products across the borders
has led to closer integration of industries within North America and Western
Europe. For example, traditionally, most automobiles sold in Canada were
manufactured in Canada, but now most automobiles sold in Canada are assembled in
the United States. On balance, however, Canada exports twice as many automobiles
to its southern neighbor as it imports. Every Chevrolet Caprice and Ford Taurus
sold in Canada is actually assembled in the United States, but every Chevrolet
Lumina and Ford Crown Victoria sold in the United States is actually assembled
in Canada. At the same time they have promoted internal
cooperation, the three trading blocs have erected barriers to restrict the
ability of industries from other regions to compete effectively. European
Community members slap a tax on goods that were produced in other countries.
Japan has lengthy permit procedures that effectively hinder foreign companies
from selling there. The Japanese government maintains quotas on the number
of automobiles its companies can export to the United States in order to counter
charges of unfair competition. Transnational corporations
Industries within relatively developed countries are increasingly; controlled by
large transnational corporations, sometimes called multinational corporations. A
transnational corporation operates factories in countries other than the one in
which its headquarters is located. Initially, transnational corporations were
primarily American-owned, but in recent years Japanese, German, and other
European companies have been active as well. Some transnational
corporations locate factories in other countries to expand their markets.
Manufacturing the product where it is to be sold overcomes the restrictions that
many countries place on imports. Furthermore, given the lack of economic growth
in many relatively developed countries, a corporation may find that the only way
it can increase sales is to move into another country. Transnational
corporations also open factories in countries with lower-cost site factors, in
order to reduce production costs. The site factor that varies among countries
most dramatically is labor. Japanese transnational corporations
have been especially active in the United States in recent years. Several
hundred Japanese-owned corporations have built factories in the United States,
primarily to develop new markets for electronics, automotive components, and
metal products. Most of these plants have been located in a handful of interior
states, including Ohio, Indiana, Kentucky, Michigan, Tennessee, and
Illinois. According to the passage, there is not much cooperation in East Asia because ______.
A.many countries in East Asia are politically hostile to Japan B.few countries in this region could match Japan in export C.the governments are not aware of the necessity D.there is no agreement on the elimination of trade barriers