Global or regional trade initiatives—or the lack thereof—often affect corporate decisions. The multinational’s bottom line is inexorably tied to the viability of global political institutions like the WTO, which work to lower trade barriers and facilitate foreign investment. Virtually all major trading nations have joined the organization, but a host of vexing issues remain on the agenda. Among them are the regulation of genetically modified organisms, access to cheaper generic drugs, rules governing intellectual property rights, antitrust enforcement, corporate governance and accounting standards, and agricultural subsidies in the United States and Europe.

The growing trend to bypass the WTO altogether in favor of bilateral or regional agreements on free trade is also a cause of concern. Recent bilateral initiatives by the United States, Japan, China, and India suggest that these countries are jockeying to gain position in the global trading system. If not managed properly, this trend could pose problems for future progress on free trade.

On a larger scale, political globalization involves a body of institutions designed to minimize conflict and keep the global system operating smoothly, from the Customs Cooperation Council and the International Civil Aviation Organization to the even more obscure International Organization for Standardization. Many of these organizations are showing their age. They are struggling to maintain effectiveness in a world where corporations and nongovernmental organizations are joining nation states as influential global actors.

Chief among them is the United Nations, a sprawling organization that has its hand in issues ranging from humanitarian relief and human rights to atomic energy and global security. The UN, explains senior Singaporean diplomat Kishore Mahbubani, “is a crucible of complexity . . . It is both a sunrise organization, providing the only village council for our shrinking global village, and a sunset organization, based on the strange principle that nation-states pursuing national interests will somehow take care of our global commons.”16 The UN’s ability to live up to the hopes placed in it will have considerable impact on how the world community evolves.