International Labor Law Final - Paper- Draft#1_Essay

International Labor Law Final - Paper- Draft#1_Essay - 1...

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1. What Problems might arise now or in the foreseeable future in light of development in international labor law? In today’s global economy the direct relationship between foreign direct investment and employment in developing countries is very hard to define because globalization is a “multi-faceted phenomenon”. Each facet may have different effects on employment varying by country, time, industry, and polices. This widespread variation stems from the large range of economic, social, legal, regulation, and policy changes that make it hard to separate the specific effects. Some believe that foreign investment and globalization cause a down-ward spiral of labor standards, causing developing nations to compete against one another to achieve the lowest costs of capital; while others believe trade and investment growth in developing nations have positive effects on labor standards, wages, and employment, evident in the Asian Tigers. Even if governments, NGO’s, economists, corporations and other concerned individuals have different opinions on the vast amount of varying effects FDI and globalization has on developing nations labor standards, almost of all them support the notion of core labor standards. In light of the developments in international labor law companies/corporations investing in developing nations that personally or have factories that violate these core labor standards will run into many problems. Our company will recognize and advise how to solve these problems, so that Devinco and GPC can develop a structure that will expand production, output demand, and investments over the long run, allowing GPC to maximize the return on their investment. To recognize/understand/be prepared for the problems that might arise for your company, General Power Corporation (GPC), one must factor in all of the players in this investment relationship, the Devinco government, United States government, labor organizations, Devinco factory owners, corporate investors, and the workers. Devinco is a developing nation in South American/Mexico that is trying to become more integrated in the world economy through trade and financial liberalization in hopes to improve its economic state. The Devinco government, like many others, has faith in the economic theory of that foreign trade is beneficial to all countries, that the division of labor makes the allocation of resources more efficient and this increases the economic welfare of all countries in the long run. Like many other developing nations Devinco wants to utilize its abundance of natural resources and deregulated low capital costs to increase its foreign direct investment and manufacturing exports. Foreign direct investment provides them with external resources, like capital and technology, which they hope will support
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its economic development. On the other hand Devinco has to realize that theoretically this might work, but many studies counteract this development strategy; for example that increased global integration and fluctuations in
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International Labor Law Final - Paper- Draft#1_Essay - 1...

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