Abstract
New trends in market relations require new methods to solve issues towards TNCs and other actors within multilateral diplomacy. The use of economic diplomacy and responsible business is essential for TNCs to achieve the sustainability in global trading system. It is important due to frequent political changes in the modern world, to which TNCs are highly susceptible, and therefore, must be reliably protected by revised international law, clearly enshrined into relevant multilateral agreements. As the legal status of TNCs is somehow blurred, the cases of unstable TNCs performance due to political atrocities may occur. The latter leads to disruptions in their work making them to obey states' interests and further concern of the issue from states and global business entities. The disruption of both agent interests creates an overall economic instability and negatively affects the process of sustainability achieving. The work summarizes some problems TNCs face due to confrontation between states, and the question of the importance of economic diplomacy use and legal support for TNCs.
TopIntroduction
Problem Statement
At present the system of international relations is framed within geopolitical and globalised economic realms. Such a system produced a number of state and non-state actors on the global arena. Among the non-state actors of international relations transnational corporations (hereinafter - TNCs) represent a special case. While functioning domestically and overseas, TNCs eventually became the models of international business standards, reflecting the latest tendencies in management, production, customer service, and other business-related areas. Newest trends in socially responsible business doing, sustainability, environmentalism, digitalization, etc., embraced into a corporate social responsibility concept, are being also implemented by TNCs. The latter is increasing the importance of the TNCs’ role in contributing to Sustainable Development Goals (hereinafter – SDGs) through socially oriented projects, policies and latest digital technological developments. From time to time, however, TNCs, becoming the subjects of international politics, face challenges of being dependent on geopolitical peculiarities of inter-state relations and suffer serious operational disruptions.
In this particular research, the case studies of McDonald's in Russia, China and Kazakhstan are taken to illustrate the necessity of sustainable economic diplomacy as a tool to improve comprehensively the TNCs operational performances and make them less dependent on political atrocities which occasionally appear in their work overseas.
Sustainable Economic Diplomacy Within the System of International Relations
As V. Roberts notes, the political orientations of classical diplomacy are typical for the pre-globalization era and should be transformed today into a new mechanism for resolving both legal and economic problems that many multinational corporations face due to the changing political situation in the international arena (Roberts, 1991). For example, the central issue of traditional diplomacy has always been allocating around political concepts and instruments, acting less significantly in other aspects of foreign relations - both in the framework of bilateral and multilateral agreements. As authors mention, the authority does not imply solely the concept of nation-states in its classic possession of sovereignty (Cerny, 2010). Moreover, the current system of international relations assumes non-state actors with a growing amount of instruments and functions to implement.
Meanwhile, the economic aspect of interstate relations has an ever-increasing influence on the world politics and, therefore, should be reflected in all diplomatic procedures, and in promotion of commercial diplomacy for the benefit of all participants in the world economy. Moreover, new challenges in social, human, environmental spheres are of the combined nature and, thus, require an integrated manner of governance (Moomaw et al., 2016). The economic diplomacy, as a facilitating instrument, is distinguished by a combination of different methods used in solving complex economic problems (Naray, 2008), thus becomes an effective tool to address a number of political interactions conducted by states from one hand, and challenges of transnational corporations as subjects of world politics, - from another. The need for the use of this particular diplomatic resource would ultimately emphasize the responsibility of states and blocs of states in ensuring the economic and legal security of transnational corporations.
Key Terms in this Chapter
Sustainable Economic Diplomacy: Includes the use of economic diplomacy tools to keep up with the rapid changes reflected in the sustainable development growth. It is concerned with economic policy questions, including the work of delegations to conferences sponsored by international trade entities.
Socially Oriented Projects: Projects aimed at meeting social needs, mobilizing public, managing private and community resources, as well as implementing the necessary measures.
Investments: Investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.
Transnational Corporations: Enterprises that are involved with the international production of goods or services, foreign investments, or income and asset management in more than one country.
World Trade: an international trade reflected in the exchange of capital, goods, and services across transnational borders or territories.
Sanctions: An embargo imposed by one or more countries against a target self-governing state, group or individual on a number of political, military and social issues to achieve domestic and international goals.
Sustainable Development Goals (SDGs): A set of 17 global goals aimed at achieving a more sustainable future for all. The SDGs were launched in 2015 by the UN and intended to be achieved by 2030.
Legislation: Consists of laws and mandatory regulations adopted by the government.
Commercial Diplomacy: Promotion of business between the two countries to obtain commercial benefits in the form of trade and investments through activities to promote business and entrepreneurship in the host country.