The interaction between multinational enterprises (MNEs) and the governments of nation states has been studied for over thirty years, going back to the classic analysis of Vernon (1971). The interaction between MNEs and home and host governments has been further developed by Stopford and Strange (1991) in a model of triangular economic diplomacy. The entire development of a scholarly field known as international political economy (IPE) takes as its focus the interactions between MNEs and states. What can be added to this literature given the new evidence that MNEs operate predominately on a regional basis rather than on a global basis, as many earlier IPE studies have assumed? In brief, a focus on regionalization is now required to analyze states and firms.

The issues to be explored in this chapter are the following:

1. Given the new evidence on the economic interdependence within each region of the triad, is this being facilitated by regional or multilateral trade agreements? The EU is much more of an integrated common market than the looser free trade agreements of NAFTA, the FTAA, and the Asian Agreement of November 2002. Do international agreements really matter when 56% of all Asian trade was already intra-regional in 2001, before a formal trade agreement was announced?

2. […]