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international trade and investment The disappearing division of the
world into host and home countries; there are political complexities
and social and economic consequences for countries playing both
roles.
1.9.1 The economic environment
It can be claimed that internationalisation strategy has redrafted the
economic map over the last 100 years. Over the last 50 years, we have
witnessed international economic agreement. The process of trade
liberalisation was set in motion by the General Agreement on Tariffs and
Trade (GATT), established in 1947. December 1993 marked the end of
GATT’s achievements in cutting import duties and tariffs and creating a
new multilateral framework for world trade. In January 1995, GATT was
replaced by the World Trade Organisation (WTO), which oversees over
90% of world trade. Most of the countries of the world accept the WTO
system, which applies the core principle of non-discrimination. What will
the future look like from an economic perspective? Reviewing the past and
looking at the present, the literature argues that the nineteenth century
was controlled by Britain and Europe, the twentieth century was controlled
by the USA as the great economic power, and the twenty-first century will
be controlled by Asia and China (see Woods, 2001). Reviewing the
economic context, there are several challenges that will need to be faced
by international companies seeking to expand international operations:
