Last week’s opposition from European regulators to the merger of two American companies was another milestone in our march to a thoroughly global economy.
The European Union’s decision to block General Electric’s acquisition of Honeywell was the first time that a deal between two U.S. companies has been effectively killed solely by opposition from the EU, and this deal was one supported, and even encouraged, by the American business community, many members of Congress and the Bush administration.
Mississippians will recall that EU regulators, as well as U.S. anti-trust authorities, opposed Clinton-based WorldCom’s acquisition of Sprint. While that situation was significant, the opposition to GE-Honeywell should have a longer-lasting impact.
As the world’s economy expands, the relationships between companies will grow closer across time zones and continents. The customs and cultures of many people, along with the rules and regulations of governments, will face greater scrutiny as businesses and economies integrate. An awareness of these differences has always been important in doing business internationally, but this awareness is ever more critical in our global economy.
American business leaders and politicians might not like the greater scrutiny — and authority — the regulators have now, but that is the reality of a NAFTA-GATT-WTO world. Accusations of protectionism will be minimally effective.
GE-Honeywell may well be dead, but other deals await. It’s an exciting time to be in business as American capitalism reaches around the world.