Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 7 THE LEGAL ENVIRONMENT OF INTERNATIONAL TRADE General Principles Legal Background: Parties may choose the parameters of their agreement. Which country's laws will govern the transaction? Where and how will disputes be resolved? What currency or monetary system will be used for the transaction? A large number of international trade organizations exist to help facilitate multinational transactions in goods, services and investments. Arbitration is the norm for international disputes. 2 International Trade Organizations, Conferences & Treaties The General Agreement on Tariffs and Trade (GATT), subscribed to by the United States and most of the industrialized countries of the world, is based on the principle of trade without discrimination. The World Trade Organization (WTO) took over policing GATT in 1995. WTO provides international dispute resolution. 3 International Trade Organizations, Conferences & Treaties CISG provides uniform rules for international sales contracts between parties in contracting nations. UNCTAD represents lesser developed countries. EU: European Council, European Commission, European Parliament, European Court of Justice. NAFTA. OPEC. 4 International Trade Organizations, Conferences & Treaties GATT/WTO promote world trade establish uniform rules for international sales contracts redistribute income internationally through trade remove trade barriers and unify economic policies United Nations Convention on Contracts for the International Sale of Goods (CISG) United Nations Conference on Trade and Development (UNCTAD) European Economic Community (EU) 5 International Trade Organizations, Conferences & Treaties United States - Canada Free Trade Agreement (FTA) North American Free Trade Agreement (NAFTA) International Monetary Fund (IMF) Organization of Petroleum Exporting Countries (OPEC) increase trade between these countries eliminate tariffs between Mexico, Canada, and U.S. facilitate expansion and balanced growth of international trade control oil production and exploration 6 Forms of Business Organizations Direct sales from business to international customer no "middleman." Export Sales Domestic business works with foreign business to sell or produce product. Agency Foreign Distributorship Licensing and Franchising Domestic business sets up a business in a foreign country & maintains control. Wholly Owned Subsidiary Joint Venture 7 Governmental Regulation Export Regulations. Determine if License is Needed. Export Control Classifications Numbers. Criminal Sanctions. Export licenses needed for high-technology. 8 Governmental Regulation Intellectual Property Protections. Counterfeit Goods. Gray Market Goods. Antitrust. Jurisdiction: The Effects Doctrine: if foreign conduct has substantial effect on U.S. commerce. Jurisdictional Rule of Reason: foreign state may have jurisdiction over conduct. 9 Governmental Regulation Antitrust (cont'd). Defenses. Act of State Doctrine. Sovereign Compliance Doctrine. Foreign Trade Antitrust Improvements Act. Foreign Antitrust Laws. EU: Treaty of Rome. 10 Securities Regulation Illegal securities transactions affect U.S. economy. Jurisdiction: federal courts have jurisdiction over securities fraud cases that impact Americans--here or abroad. Foreign Secrecy Laws. 11 Barriers to Trade Tariffs are the most common barrier to trade. Tariff Barriers. Tariff is a tax on goods as they move in/out of a country. Non-tariff barriers- e.g., import quotas. Export Controls as Instruments of Foreign Policy. 12 Relief Mechanisms Antidumping Laws and Export Subsidies. Selling goods in a foreign country below the fair value. Uruguay Round Agreement Act of 1994. Retaliation and Relief Against Foreign Unfair Trade Restrictions. U.S. Trade Representative can retaliate under the Ominibus Trade and Competitiveness Act. 13 Expropriation U.S. business have legitimate concern about foreign government seizing assets. Businesses in defense, natural resources, banking and communications are susceptible. Insurance of businesses will minimize loss. Overseas Private Investment Corporation is under policy control of U.S. Secretary of State. 14 Government Assistance Export Trading Company Act of 1982. Promotes formation of U.S.-based export companies. Foreign Sales Corporation Act of 1984. Tax incentives for qualified businesses. U.S. Export-Import Bank. Foreign Corrupt Practices Act. 15 ...
View Full Document

This note was uploaded on 05/12/2010 for the course BUS 2241 taught by Professor Mcguinnes during the Spring '10 term at Valencia.

Ask a homework question - tutors are online