1. BA 18
Chapter 3
International Law 1

2. Why Do Nations Trade?
Our world has become a “global village” where goods and services are traded globally, rather than just nationally.
People depend upon raw goods and materials for business ventures, manufacturing and cultural sustenance.
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3. Why do Nations Trade?
Any American Business, no matter how small, with an exportable product, must become a global competitor within the next decade or face the loss of 25-30% of potential sales!
Chances are, your business will be among those who trade with foreign countries. 3 3

4. Going Global

5. Our National Economy Growing Population Ever growing Diversity
Ever growing demand for
products and services
made overseas
Globalization
ISO 9000 – International
Standards for Quality
Assurance

6. Population Clock 2 2

7. U.S. National Debt Clock

8. National Debt Clock in Real Time:

9. The World’s Big Emerging Markets
What do we get from these markets?
Turkey
Poland
Mexico
Brazil
Argentina
South Africa
India
Indonesia
Singapore
Thailand
Malaysia
Vietnam
Philippines
Hong Kong
South Korea
China
Chile

10. The Globalization of Business
Overseas Investment in the United States
International Business Economics:
Balance of Trade – The relationship between the value of a country’s imports and the value of its exports determines the balance of trade.
Balance of Payments – The sum of all payments one nation has made to other nations minus the payments it has received from other nations during a specified period of time. 4 4

11. International Law Law that governs affairs between nations.
Law that regulates transactions between individuals and businesses of different countries.
No single source of international law.
No world court responsible for interpreting all international law.

12. Sources of International Law
Those things that international *tribunals rely on in deciding international disputes.
Treaties and conventions
Custom
General principles of law
Judicial decisions and teachings
Admiralty law or maritime law
*Tribunal: a Court or forum of justice; The Seat of a judge

13. The United States and Foreign Affairs
The Constitution gives most of the power over foreign affairs to the federal government.
Foreign Commerce Clause
Treaty Clause

14. United Nations
International organization created by multinational treaty in 1945.
Goals of the United Nations (U.N.):
Maintain peace and security in the world.
Promote economic and social cooperation.
Protect human rights.

15. International Court of Justice
The judicial branch of the United Nations.
Also called the “World Court.”
Located in The Hague, the Netherlands.
Only nations may have cases decided by this court.

16. International Monetary Fund – (IMF)
IMF was established to promote the world economy.
Sound monetary, fiscal, and macroeconomic policies worldwide
Provides assistance to needy countries

17. Board of Governors - International Monetary Fund (IMF)

18. What is the difference between the IMF and the World Bank?
The fundamental difference is this: the Bank is primarily a development institution; the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations.
Each has a different purpose, a distinct structure, receives its funding from different sources, assists different categories of members, and strives to achieve distinct goals through methods peculiar to itself.

19. Globalization and International Law

20. Globalization brings about it’s own set of Difficulties
Stabilizing the economy
Protection of the environment (OSHA Regulations)
Ethics in business practices, both foreign and domestic
Arbitration for dispute resolution on a global scale.
Standardization of all Trade Agreements

21. Business Contracts: International United States
CISG – 1998 United Nations Convention on Contracts for the International Sales of Goods (CISG)
Provides a law of sales contracts specifically for contracts between businesses in countries that have approved the convention.
United States
UCC Codes – Uniform Commercial Code
Govern sales transactions within the United States

22. Foreign Corrupt Practices Act
United States
RICO - Racketeer Influenced and Corrupt Organization Act – Established, to fight organized crime.
International
Foreign Corrupt Practices Act
Congress passed the FCPA in 1977
Covers foreign corrupt practices and provides accounting standards that firms must follow when reporting payments.

23. Foreign Corrupt Practices Act
Nepotism: Is It a Crime?
By JOE PALAZZOLO , CHRISTOPHER M. MATTHEWS
and SERENA NG CONNECT
Wall Street Journal
Updated August 19, 2013, 9:36 p.m. ET

24. Title 5 – Civil Rights Act of 1964
United States
prohibited discrimination in public facilities, in government, and in employment The Equal Protection Clause, part of the Fourteenth Amendment to the United States Constitution, provides that "no state shall… deny to any person within its jurisdiction the equal protection of the laws.”
International
Extended to Americans working for American companies, even when the employee is working in another nation.
Extended the protections across international boundaries.
Americans did not give up their rights as Americans working for American firms on foreign soil.

26. TRADE AGREEMENTS AND COUNCIL

27. Trade Agreements and Trade Finance
The General Agreement on Tariffs and Trade (GATT)
The World Trade Organization (WTO)
The Asia Pacific Economic Cooperation Council (APEC)
Free Trade
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28. Trade Agreements and Trade Finance
Trading Blocs
European Union (EU)
North American Free Trade Agreement (NAFTA)
Association of Southeast Asian Nations (ASEAN)
Mercosur
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29. European Union and the Treaty of Rome - 1957

30. E.U. Treaty of Rome – 1957 Accomplished 4 things:
Movement of goods, people, capital and services
The European Union: The European Community
EU Government:
Council of Ministers
Assembly
Commission
Court of Justice

31. Europe and the Nations of the European Union
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32. E.U. US Antitrust Laws EU Competition Laws: Article 85 Article 86
Clayton Act
Sherman Act
EU Competition Laws:
Article 85
Article 86
Negative Clearance

33. The International Organization for Standardization (ISO)US
ISO (EU) Standard
TQM – Total Quality Management
W. Edwards Deming
Baldridge Award
International (Established through Europe/Treaty of Rome)
Uniform Standards
Standards by member nations
Block trade for those not certified
ISO 9000/9001/9002/
ISO – Environmental Management

34. NAFT AND THE WEST

35. North American Free Trade Agreement (NAFTA)
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36. Former President Vicente Fox
Just two months before 9/11 – Bush and Mexican President Vicente Fox were working on solutions towards a “Free Trade area of the Americas” That however has been put on hold. Meanwhile, President Fox is no longer the President. It is difficult to say if and when this will ever come into play.
                                                                                          

37. Issues still on the Table between Mexico and the US:
Transportation
Environmental Protection, OSHA and Transportation
Immigration
Commerce and Trade Issues
Overcoming the past history with Mexico and US relations
Drug Trafficking Prevention

38. Considerations When Entering into Agreements with Foreign Countries
Management of the Global Corporation
Cultural Differences in International Business
Foreign Corporate Attorneys specializing in the countries laws with which you are doing business.
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39. Websites to View:

40. Quiz Questions for Review:
What is the “Balance of Trade?”
What does CISG stand for? Does it apply to the US or International laws?
List two sources of International law.
What does “Balance of Payments” mean?
What does UCC stand for? Does it apply to the US or International laws?
What does IMF stand for?

41. Continued… What are “Trading Blocs”
8. What does the acronym N.A.F.T.A. stand for?
9. What does the acronym W.T.O. stand for?
What are the four things the Treaty of Rome accomplished?
In what year was the Treaty of Rome signed?
12. Why is it important to have an attorney review business contracts made with other countries?