Global Policy Forum

Coalition says diplomatic pressure employed for firms

By George Gedda

Washington - The U.S. government often exploits its superpower status to cajole foreign governments into granting lucrative business contracts to American corporations, a survey released Thursday said. The survey was made public by Transparency International, a global coalition that attempts to curb corruption.

Among other findings, the survey concluded that companies from Sweden, Australia and Canada are the least likely among 19 countries listed to pay bribes to win or retain business in a given country. Companies which received the lowest ratings were from Taiwan, South Korea and China. American firms were ranked 9th.

The study, carried out by Gallup International Association, involved interviews with 779 private sector leaders from 14 emerging market economies - Indonesia, the Philippines, South Korea, Thailand, Argentina, Brazil, Colombia, Hungary, Poland, Russia, Morocco, Nigeria and South Africa.

According to the survey, the United States, by a wide margin, was ranked as the country most likely to use diplomatic and other pressures to gain unfair business advantage for its companies.

In response to the question of which governments were most likely to resort to such practices, 61 percent listed the United States. France and Japan were next, each with 34 percent. Among the 19, Sweden, Austria and Switzerland came out with the best ranking.

The respondents to the survey said the most prevalent means governments use for gaining advantages for business in their own countries were: diplomatic or political pressure (59 percent), commercial pressure/dumping and price manipulations (49 percent) and financial pressure through differential taxes, tariffs, custom barriers and subsidies (45 percent).

The State Department offered no comment on the report Thursday. Willard Workman, a senior officer of the U.S. Chamber of Commerce, acknowledged that governments routinely promote sales through subsidies but said those offered by the United States through the U.S. Export-Import Bank are much smaller than those of France, South Korea, Japan, Britain and Germany. He said the complaints registered by those surveyed are a "function of sour grapes by our foreign competitors who have been losing to American competition."

Frank Vogl, vice chairman of Transparency International, told a news conference that all major exporting countries use their embassies to implore host governments to drum up business for corporations back home. "I don't know whether that is unethical," he said. But, he said, the perception among the private sector leaders interviewed was that the U.S. tries to pressure foreign governments on behalf of American companies more than anyone else.

Frederik Galtung, who helped prepare the Transparency International report, said in an interview in London, U.S. officials use "diplomatic pressure in a major way, for arms sales, for example, as well as foreign aid and trade pressure" The study also said Western governments are doing little to curb bribery in dealings with developing countries, despite an international convention against the practice.

Transparency International chairman Peter Eigen said the scale of "bribe-paying by international corporations in the developing countries of the world is massive." Transparency has offices in 80 countries. In 1997, a clean practices convention was signed among 34 member states of the Organization for Economic Cooperation and Development. So far, 18 nations have ratified the convention, including the United States and most European countries.

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