The political relationship between U.S. multinational corporations and the NAFTA investment chapter: the case of manufacturing multinationals

Many trade policy researchers and stakeholders claim that U.S. multinational corporations (MNCs) have near fiat political power to write U.S. trade and investment law, which they use to profit from in international markets. This article focuses on the relationship between U.S. MNCs and U.S. investment treaties using the NAFTA investment chapter and U.S. manufacturing foreign direct investment (FDI) to Mexico as a case study. The case study tests a causal model in which market power begets political power in U.S. trade policy, and vice versa. Evidence is presented that the model held true until recent NAFTA renegotiations, which led to major revisions of the investment chapter. The case study illustrates that when it comes to writing the rules of the global economy, corporate power begets power, but that power can be successfully contested.