Introduction

Communications today are faster and less expensive than before. Barriers to the movement of capital, goods and services are fewer. The tastes of consumers have become largely homogenous, shaped by the same advertising practices. As a result, the sphere of activity of most corporations typically reaches beyond national borders. They source their supplies from abroad, and they serve clients overseas. They invest and establish subsidiaries outside their State of origin. Sometimes, they are directly present abroad, by creating an agency in another State. The wedge increases between the jurisdiction of the State, which is primarily territorial, and the activity of the corporation, which is increasingly without borders.

In this context, State sovereignty must redefine itself. The assertion by each State of its exclusive competence to regulate activities on its national territory will result in a situation in which States compete with one another to attract companies, whether as buyers or as investors. As buyers of goods, companies act as gatekeepers to global markets: for developing countries' producers, they guarantee access to the high-value markets of industrialised nations, whose purchasing power is many times more significant than that of consumers in developing countries; or they may have unique processing capabilities, allowing raw commodities to be transformed for sale to the final consumer. As investors, companies bring in much-needed capital. Their presence can be a source of local employment opportunities. It can lead to transfers of technologies and know-how to local entrepreneurs.