Impact of international law on trade
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Published: Fri, 12 May 2017
A business has to be built within a defined set of framework regardless of its nature and where it is conducted. This structural framework has to be structured on law which provides the various options for the proprietors of the business to choose the best suited to their particular needs. The particular needs of the business proprietors relates to issues such as the business flexibility, the confidentiality of the business data, taxation and the source of finances. Today, the conduct of the business must be within the legal structure which acts as the vehicle for the business conduct. The term company is used in the civil law countries with a meaning of partnership and limited companies. The international business law originated from the customs, multilateral trities, international conventions and aggreements which came together to form a common framework for world trading and market. Trade and business transactions have enhanced the market globalization with the introduction of diverse business and trade laws. This has further contributed to the developing and growth of the regional trade promoting the business transactions in the international trade.
The GATT , NAFTA treaties and the European Union are the main sources of the international law. These international organizational develops and reveiews the international stardards and the legal codes of conduct that binds the member nations. The law mainly addresses the ethical issues that affect the business operations in the global business environment. This involves the stardards set for the protection of the rules for international sales and other difficult issues between the individual nations on agreement. The international law also adreeses the processes involvedin the business disputes resolution in the international business transactions The international law of business determines the rights and the responsibilities of the parties in the business transaction. The US government has globally used its economic and political influences in forcing other nations to remove non-tariff barriers to the US import of goods and services.
The spirit of free and fair trade has become widely contagious globally thus there was need for the laws and business guidelines to be conducted between the business partners. With the growth of the global economic integration, many nations have joined the business organizations such as the World trade organization to enjoy the world trade. This has led to the globalization of the global economy and opening up the world market for exports and imports of goods and services enabling the business prospects to the developing nations. The international business laws are the measures and rules followed by the business proprietors conducting the international business. This creates a conducive international business environment with flexibility in the law of international trade and investment.
The international law gives the strategic plans in the basic market entry of many firms, protection policies of the intellectual property and licenses as well as the foreign investments. The law puts the emphasis to both the private and the puplic sectors in business environment. The private law which is widely apllied in the international business transactionsincludes the law of the international sales, business agreements and other governing laws. The public business international law includes the convections, business trities and the agreements among the countries that entails the legal frame work within the international business jurisdiction. Many countries has created customs and tarrif laws that open up the market to the international investors. The public international business law provides the foundation for the gorvernments regulation of the international business. Careful business planning and legal practices avoid and reduce the risks involved with the international law as they affect the public and the private sectors of the business. A private law is considered when the rule of law affects the commercial transactions between two parties whereas the public law is considered in the determination of the rights and the responsibilities of the countries to one another.
Management of the International business transactions needs well entailed strategies and better implementation mechanisms due to increase in the trade risks. Today world of business has many challenges in dealing with the illegal business which do not exist. Many business firms are trying to conduct international business illegally in avoiding the taxation in various levels of the business. Handling of the foreign mergers and dealing with the illegal markets goods has been a challenge to many nations in conducting the world trade. The international law faces challenge in dealing with the unexpected differences in foreign corporate law and the evaluation of the political stability in the less stable nations. Political indifference has been an affecting the international business laws with the government giving an outline on business conduct to their respective nations. This has led to the poor economic growth internationally with the international law stressing the strategic decision making processes.
Cultural, economic, political and social factors have a great impact on the international business laws as they gives the variations in attitudes towards the law. They influence the way we do business internationally and impacts on the trade relations between the nations. There is difficulty in the Separation of the politics, foreign policies and the country trade evidently seen in the exports controls and trade sanction obligatory to foreign policy or the national security. Trade and the investment issues has also been a challenge in the international business with the occurrence of the nation’s investment policies. The legal environment on which the international business is conducted has become so intense with the social economic and political forces influencing the development of the business law making processes and legal institutions. The economic environment of conducting business has greatly improved in the developing countries especially China. This is due to the increase in the multinational businesses in world developments as many countries trade with each other.
The custom and the tariffs laws enhance the business operation from the international levels allowing the firms to locate the overseseas market and facilitators in expansion of the business globally. Human rights and the international criminal law have been global issues which has affected the international business as many violators being locked out from the common trade organizations. In the developing countries trade and business are incorporated with governmental and regional laws with the development agenda of the fast economic growth. International business has more ethical issues and social responsibilities with outlined corporate codes of conduct in trade transactions. The principles of international business has been affected by the intergovernmental organizations with the laws such as codes of conduct, child labor, workers rights, protection of environment and wildlife, human rights
There are a lot of added risks in the international business which includes the risk of the language and cultural differences, international hostility and political influences. The foreign legal actions and practices, trade controls and the restriction of the investment has also been an area of concern in the management of the international business laws. The major forms of the international business the importing and exporting trade, the transfer licensing agreement s and the legal protection of the patents, copyrights and other intellectual property. Active foreign investments have been developed through business mergers, acquitions and the joint ventures. The international business, trade and international licensing of the intellectual property provide the legal relationship between the international parties in conducting the international business transactions. These legal frameworks provide them with important means of foreign market entry with different level of commitment and involvement in the foreign market lifetime. The managerial challenges experienced expose the business entities to different set of legal business risks with long term economical implications.
Today’s world economy has led to the realization of the international business as many countries have realized that they can’t rely on the domestic business due to the global competition. This has enabled the interdependency of the world economically enhancing the globalization of products, services and capital markets. The economic interdependence in the world economy has been contributed by the availability of the precious natural raw resources and the technological advances increasingly opening up the free trade and available markets for imports and exports between different sovereignty. The development of the free trade and the steady movement towards economic integration among nations has led to the increased foreign investments and the industrialization promoting the international business. The interdependence has attributed to the common international laws in the business environment with the interrelated financial markets, the world wide flow of capital and the coordination of the economic policies to create a globally competitive economy.
The international law has a created comparative advantage to the economic concepts in many nations. Exporting in international business provides the business firms to reach wide range of market which requires modest capital investment and internationally recognized business laws. In the recent past the word was experiencing the legal barriers to the importing and exporting of the nation’s products. The international law creates the custom regulations identifying the legal controls on the exports and imports of products between countries. Many countries engage in exporting of goods in regular basis complying with the international business law in making of the exporting marketing decisions. Trade relations between nations create the dependence, influence affecting the power position of the nation and strengthening the economic coexistence of the country. Every sovereign nation can at any time influence or interrupt its own export and import trade affairs affecting the international trade environment as the other countries relying on it must then get another markets and sources of supply or make economic adjustments .
The power to interrupt the business relations with any country is a determinant of a country’s global power position. Sovereign nations have increasingly interrupted the trade processes with the increase in competition levels denying the importation and the export processes. Settlement of such business power disputes are fully engaged through the international business law on which a common ground is used in the crisis settlement. In the currency issues a foreign currency transactions requires the exchange rates on which the gain or loss results from the gradual changes on the exchange rates. The policies of securing the international foreign trade secure the controls over the oceanic trade routes increasing the trade partner’s benefits and trading with nations with mobility of the resources. Many countries have tried to create their own trade laws redirecting their international businesses to their politically friendly nations or the neighbors.
The international business policy relies on the influence of the foreign trade between the sovereign nations. Resource mobility between the countries plays a major role in the relocation of the resources with the manufacturing and the trading countries having a major advantage. The international laws in business allow the countries to interpret and detect the relevant mechanisms to put in place to ensure that the rules and the laws don’t influence the core business of the nation. Merge dealing policies is currently widely used by the businesses worldwide in order to make an extra revenue. This is achieved as the trade seeks for help in dealing with their distribution and sales of their goods on which they start with the merger plan. This policy allows the trade owner to fully regulate and monitors the business globally opening up to a wider market.
International business acquisitions to foreign markets accessibility is a vital entity in business enterprises of all kinds and sizes. This is a major provision of the foreign production or marketing capacity in the global business transactions. Over the past decades businesses has faced difficulties in obtaining harmonizing product or service lines. Many of them run the services with high market risk and high costs. The law governing the global business provides business with methods to obtain regulatory and legal business approvals. legal practitioners and other experts involved in the international business law making need a user-friendly source of information covering the most important jurisdictions of the world trade. International Business Acquisitions has positively affected the business and trade issues due to the great value of the legal business issues. The policies and the business strategies encompass the basic international elements of trade, the licensing and the investment policies. The business prospects entering to foreign market depend on the host countries considerations and the sophistication of the firm internationally.
With the gradual political changes in many countries the world economy has increased with the rise of the international trade. Many countries are moving towards greater political freedom and good governance. This democratic advance has led to creation of international business law that protects the world business. With this freedom foreign investors are freely integrating themselves in various global businesses creating a market oriented world economies. The greatest challenges facing the international business is the entrenched poverty level and the declining natural resources as excess resource exploitation is experienced in many regions. The environmental degradation, global warming international terrorism and the widespread of infectious disease has also been an area of concern in the international laws. The overlap occurs in business transactions with many countries creating their business plan that complies with the international standards. Ownership of the foreign business by the investors has to comply with the obligations of the corporate citizenship in the invested country. The international trade market has enhanced the investment of the foreigner in various countries enhancing the world economy.
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