Transnational Business Law International and Foreign Law Research Nov. 8, 2006

Increase of International Trade & Investment Reduced tariff and nontariff barriers to trade (World Trade Organization agreements & regional trade agreements) More nations transition to market economies Improved communication (e-Commerce) Reduced foreign investment barriers Technology transfers of IP easier

Points from Reading Essien, Victor, “Research in Transnational Business Law,” in Accidental Tourist on the New Frontier: An Introduction to Global Legal Research, Jeanne Rehberg and Radu D. Popa ed. (Littleton: Rothman, 1998) p

Terms – International business law – International commercial law – International transactions – Transnational law – International trade law – Law of international trade and investment

Definition ? – Regulation of business relationships across borders and with countries/individuals/corporations. – Lex Mercatoria – Latin for “the law of merchants”

Three Elements of Transnational Business Law Trade Licensing or Franchising Investment

(1) International Trade Import and export of goods and services Balance: protect local industries from harm by foreign competitors AND encourage trade across borders. Barriers to trade: tariffs (import & export duties), import quotas, import licensing procedures, environmental standards, customs procedures, government procurement policies and subsidies etc. Limit these barriers: bilateral treaties and trade agreements with “most favored nation” status (both agree no other nation receives more favorable treatment) – General Agreement on Tariffs and Trade (GATT, 1947), replaced by World Trade Organization (WTO, 1995) an international arrangement with over 149 countries, holding Multilateral Trade Negotiations (e.g., Uruguay Round, Doha Round) – North American Free Trade Agreement (NAFTA)(US, Canada, Mexico) – free trade area agreement

International Trade WTO Structure – Ministerial Body (meets every 2 years, Seattle) – General Council (main governing body) – Secretariat (staff) WTO Dispute Resolution Process – “request for consultations” = complaint – Panel investigates & reports – Appellate body (appeals routine) – Implementation: Loser must bring into compliance. If not, winner can retaliate. Other Issues of International Trade – Customs Classification and Valuation – Antidumping Duties – Subsidies & countervailaing duties – Boycott law – Antitrust Laws

International Sales Law UN Convention on Contracts for the International Sale of Goods (CISG), Apr. 11, 1980, 19 I.L.M (entered into force Jan. 1, 1988). – Governs sale of goods between parties in US and over 40 countries. – Drafted by UN Commission on International Trade Law (UNCITRAL) - goal of unification of international commercial law (e.g., UNCITRAL Model Law on Electronic Commerce) INCOTERMS: Written formulation of “international commercial terms” drafted by International Chamber of Commerce Topics: bills of lading, sales agent and distributorship agreements, countertrade agreements (barter), letters of credit, electronic commerce UNIDROIT: International Institute for the Unification of Private Law (e.g., draft uniform law on international sales)

(2) Licensing and Franchising Holder of Intellectual Property rights (copyright, trademark, patent) grants rights to a foreign entity. Franchising = form of licensing that gives you the right to use a trade name or trademark in offering goods/services (for a fee). Avoid the “Issues” related to Trade, but lose control/ownership. Governed by Agreements, Treaties, Regulations. Transfer of Technology Agreements (M ultinational Governance) Trade Related Intellectual Property Rights (TRIPS) from WTO Uruguay Round (1993) Paris Convention (1967) – patents NAFTA & technology transfers

(3) Investment Direct = ownership and control of business in host country (invest in manufacturing, mining, farming, assembly facilities etc.) Portfolio = owning only MINORITY interest in a foreign venture and getting money via dividends (no management).

Investment Who governs? Host Nation, Home Nation, Multi-National Organizations. EU, NAFTA (Chpt. 11), WTO investment rules (TRIMs)(trade related investment measures – mixture of barriers and incentives) Organisation for Economic Cooperation and Development (OECD) – 30 member countries; Guidelines for conduct of multinational enterprises; promote democracy and market economy UN & International Chamber of Commerce: create investment rules World Bank (home of International Centre for the Settlement of Investment Disputes – arbitration of disputes) Bilateral Investment Treaties (BITs)

Resolving Cross-Border Business Disputes International Commercial Arbitration Dispute Resolution Panels Litigation

International Commercial Arbitration (ICA) Binding; avoid court Increasing in Americas, Europe, Middle East. UN Convention on Recognition and Enforcement of Arbitral Awards (1958) (New York Convention). Two types – Ad Hoc (parties select arbitrators and rules) – Institutional (e.g., International Chamber of Commerce Court of Arbitration) Arbitration Rules – UNCITRAL Arbitration Rules – World Bank’s International Center for the Settlement of Investment Disputes (ICSID) Arbitration Rules – International Chamber of Commerce (ICC) Rules

International Business Litigation Issues: jurisdiction, location, service of process abroad, evidence, remedies (punitive damages?), enforcement of judgment.