Prof. Rodman
Spring 1996

FINAL EXAMINATION
Business and American Foreign Policy
Government 331


PART A: Answer five of ten (50 points).

1. In 1950, the National Security Council implemented a decision to allow American oil companies to write off all taxes paid to producer countries against their American tax liabilities. How would Krasner and a power elite theorist differ in their explanation of this?

2. What does Magdoff mean when he refers to the "Global Open Door" as a motive for American foreign policy? Illustrate how he would interpret one of the following cases of intervention that you did not write about:

(a) Covert intervention against Arbenz in Guatemala (b) Covert intervention against Castro's Cuba (c) Destabilization of the Allende government in Chile

3. Identify three of the following and explain their significance in terms of the influence of oil companies on American foreign policy:

(a) Leapfrogging (d) "Equal Misery" (b) Mohammed Mossadegh (e) Participation (c) The London Policy Group (f) Occidental Petroleum in Libya

4. Briefly explain the differences between the United States and most Latin American governments regarding international laws governing nationalization of foreign investments.

5. What are keiretsu? Why do revisionists cite them as a reason why the U.S. should shift from a process-oriented to a results-oriented approach to US-Japanese trade?

6. Identify three of the following pieces of actual or proposed legislation and indicate their significance for business-government relations in foreign policy:

(a) The Hickenlooper Amendment (b) The Toshiba Sanctions Bill (c) The Fast Track Provision of the Trade Act of 1974 (d) The Jackson-Vanik Amendment (e) The Export Control Act (f) The 1982 Local Content Bill

7. What are the central differences between the United States and Western Europe over the extension of US sanctions to the foreign subsidiaries of American firms? How were these differences resolved in both (a) the pipeline sanctions and (b) the Iranian asset freeze?

8. Briefly give two reasons why Baldwin disagrees with the ñconventional wisdomî on sanctions with respect to one of the following episodes that you did not write about: (a) the Cuban sanctions, (b) the grain embargo, or (c) the Iranian Asset Freeze.

9. How do economic warfare and structural linkage (or constructive engagement) differ as strategies of dealing with nonliberal regimes? Illustrate the difference with respect to one of the following areas you did not write about: (a) economic relations with the former Soviet Union or (b) economic relations with South Africa.

10. In Lobbying the Corporation, David Vogel notes that the corporate social responsibility movement seeks to challenge liberalism's distinction between private and public spheres of activity. Briefly explain and illustrate with one example from both (a) the Nestle boycott and (b) the South African divestment campaign.

PART B: Answer one of two (50 points).

4. What does Pastor mean by the "cry and sigh paradox of American trade policy" and how does it differ from the Lowi/Schattschneider interest group model (see Pastor, pp. 34-49) in explaining U.S. trade policy from the Reciprocal Trade Agreements Act of 1934 through the 1960s? What impact has the decline of American economic hegemony had on the model in both the 1970s and 1980s? Have there been basic continuities and/or fundamental changes in interest group politics and executive-congressional relations? What are the implications of your analysis for the continued applicability of the model in the 1990s?

5. Proponents of economic liberalism are very skeptical of state intervention in foreign economic relations. Such interventions are not only economically costly for the United States, they are also counterproductive to the political or economic changes they hope to bring about. Separating business from politics would be preferable in terms of both AmericaÍs economic interests and in terms of the foreign policy values and interests it seeks to promote.

Critically assess this argument with respect to two of the following areas: (a) coercive economic strategies vis-a-vis Japan; (b) sanctions and/or export controls designed to promote Cold War aims; (c) sanctions and/or disinvestment to promote human rights; (d) sanctions as a means of deterring or punishing expropriation. In your answer, you should contrast the rationales used by policy makers or advocates for deviating from free trade with the line of argument likely to be put forward by a liberal economic critic. On the basis of your evidence, would you accept, reject, or qualify the liberal case against politicizing international economic relations?