Countries at all levels of economic development face a similar challenge: to make their in

dustries competitive in an increasingly integrated global economy. Despite sharing the same overall goal, though, countries face distinctive geographical issues in ensuring that their industries compete effectively. Industries in relatively developed countries must protect their markets from new competitors. Countries once governed or still governed by communist parties must prepare their industries to compete in a global market-driven economy. Developing countries of Africa, Asia, and Latin America must identify new markets and sources of revenue to generate industrial growth.

Competition among blocs Industrial competition in the relatively developed world increasingly takes place among blocs of countries. Countries within three groups —North America, Western Europe, and East Asia —cooperate more extensively with each other but compete against the other two regions to promote industrial growth.

In North America, the United States and Canada have eliminated virtually all trade barriers, while similar efforts have been made among the members of the European Community. Cooperation is less extensive in East Asia, where Japanese industries tend to set the lead in exporting industrial goods to other countries.

The free movement of most products across the borders has led to closer integration of industries within North America and Western Europe. For example, traditionally, most automobiles sold in Canada were manufactured in Canada, but now most automobiles sold in Canada are assembled in the United States. On balance, however, Canada exports twice as many automobiles to its southern neighbor as it imports. Every Chevrolet Caprice and Ford Taurus sold in Canada is actually assembled in the United States, but every Chevrolet Lumina and Ford Crown Victoria sold in the United States is actually assembled in Canada.

At the same time they have promoted internal cooperation, the three trading blocs have erected barriers to restrict the ability of industries from other regions to compete effectively. European Community members slap a tax on goods that were produced in other countries. Japan has lengthy permit procedures that effectively hinder foreign companies from selling there. The Japanese government maintains quotas on the number of automobiles its companies can export to the United States in order to counter charges of unfair competition.

Transnational corporations Industries within relatively developed countries are increasingly controlled by large transnational corporations, sometimes called multinational corporations. A transnational corporation operates factories in countries other than the one in which its headquarters is located. Initially, transnational corporations were primarily American-owned, but in recent years Japanese, German, and other European companies have been active as well.

Some transnational corporations locate factories in other countries to expand their markets. Manufacturing the product where it is to be sold overcomes the restrictions that many countries place on imports. Furthermore, given the lack of economic growth in many relatively developed countries, a corporation may find that the only way it can increase sales is to move into another country. Transnational corporations also open factories in countries with lower-cost site factors, in order to reduce production costs. The site factor that varies among countries most dramatically is labor.

Japanese transnational corporations have been especially active in the United States in recent years. Several hundred Japanese-owned corporations have built factories in the United States, primarily to develop new markets for electronics, automotive components, and metal products. Most of these plants have been located in a handful of interior states, including Ohio, Indiana, Ke

A．hinder foreign companies from selling in Japan

B．promote selling in Japan

C．maintain balanced trade with other countries

D．operate factories in other countries