Geography Reference
In-Depth Information
investment. Outflows from the European Union (EU) account for
47 per cent of global outflows, rising to 55 per cent when includ-
ing the four members of the European Free Trade Association
(EFTA), today composed by four members - Norway, Iceland,
Switzerland and Liechtenstein (UNCTAD 2007). Outflows from
the US and Canada together account for 21.5 per cent of the total
(UNCTAD 2007). For a single country, the US exhibits by far the
largest FDI outflows: annual investment abroad from the US is
typically more than twice that of any other country, with the total
foreign employment of US MNEs currently running at approxi-
mately 9 million employees (UNCTAD 2007).
As we will see later, each of the three super-regions - namely
the European Union (EU), North America Free Trade Area
(NAFTA) and South and East Asia - is dominated by a core of
countries: in the case of NAFTA the dominant element by far is
the US; in that of the EU the core is the EU-15, or the members
pre-existing the enlargements to Eastern and Central Europe in
2004 and 2007; and in the case of South and East Asia, it is East
Asia and particularly Japan, China and Korea. The share of global
trade accounted for by these leading countries has increased in
line with their share of global output: by 2005 NAFTA accounted
for 15 per cent of world trade, the EU-15 for 36 per cent, and East
Asia for 22 per cent (UN Comtrade data; see also Fujita 2007a).
In terms of foreign direct investment, globalization confirms to
be overwhelmingly a rich country phenomenon. In 2006, FDI
inflows to developed economies amounted to $857bn (UNCTAD
2007), which is almost two thirds of total FDI flows, and up from
59 per cent in 2005 (UNCTAD 2006). In terms of individual coun-
tries, in 2006, with an inflow of $175.4bn, the US recovered its
top position as the largest destination for FDI (UNCTAD 2007),
still occupied, and even strengthened, in 2010 despite the eco-
nomic crisis (UNCTAD 2011). The UK continues to maintain its
dominant position in terms of the world's top 50 financial MNEs,
still hosting the largest number of these particular MNE affiliates
(UNCTAD 2007). Meanwhile, across all sectors, the EU alone
accounts for 40 per cent of global FDI inflows, rising to over 43
per cent if we include the EFTA countries (UNCTAD 2006, 2007).
The US and Canada combined account for just under 19 per
cent (UNCTAD 2007). Over the last decades, therefore, as the
three super-regions have increasingly controlled global economic
