Case 283 - American International Group: Trade Liberalization and the Grandfathering Principle

Beckner, Christian

Throughout the 1990s the American International Group (AIG), one of the world’s largest insurance companies, was actively engaged in the process of international trade liberalization, and faced a number of challenges to its existing investments in a set of countries during this period. These episodes have encouraged the development of a new principle in trade liberalization: the grandfathering principle.

This case study chronicles the company’s efforts to maintain its investments in a set of countries—most notably in Malaysia and China—focusing on the development of the grandfathering principle throughout this process. It highlights the challenges and rewards associated with being an internationally focused company, and offers a window into business-government relations.