Corporate strategies for Asia Pacific Companies in Dealing with Europe's Single-Integrated Market

Abstract

By the latter half of the 1980s, a number of Asia Pacific countries had succeeded through export strategies in penetrating the European market.While Japan was a net exporter to Europe throughout the 1980s, countries like Korea, Taiwan, Hong Kong, and to a lesser extent, Malaysia, Thailand and the Philippines were also net exporters to Europe. As we move through the decade of the 1990s, one of the major uncertainties facing Asia Pacific countries centers on the possibility that, along with the creation of the single market, Europe may erect barriers to trade which could discriminate against non-member countries. Given the potential detrimental impact of a future discriminatory trade policy of the European Union with respect to its outside trading partners, this paper examines the historical relationship and importance of the EU market to selected Asia Pacific countries over the 9-year period 1982 through 1990. In addition, the paper examines market entry strategies which may be useful for traditional Asia Pacific exporting companies given a potentially adverse European Union trade posture.Specifically, it is suggested that either a defensive export-substitution direct investment strategy or an offensive export-substitution direct investment strategy may be appropriate for many Asia Pacific companies. ABSTRAK