1. Political and Legal Forces in International Business
CHAPTER 5
Wang Shen
TFSU

2. Learning Objectives Problems with the World Trade Organization
Political measures affecting international business
The two legal systems of the world
National trade and investment policies and their effects
The risks for international business
Ways to cope with the international risks

3. International Perspective
International Organization Concerning Trade and Investment—WTO
Globalization and Regionalization
International Trade
GATT

4. The Cartoons of WTO

5. Source: http://www.rightgrrl.com/cartoons/wto.jpg;

6. Source: http://content.lib.washington.edu/wtoweb/index.html
Note: The protests depicted in this collection took place between November 29, 1999 and December 3, 1999, when the World Trade Organization (WTO) held its ministerial meeting in Seattle.

7. International Perspective
International Political Forces
Embargos and economic sanctions
Export Control
Domestic Policies
1. boycotts
2. antitrust laws
3. anti-bribery
4. anti-corruption regulations
5. labor standard
6. environmental laws

8. Iraq Under UN sanction

9. International Perspective
Two International Legal Systems
The Common Law System
The Code Law System
Their role in solving international economic disputes

10. Country Perspective Four Goals of National Policies
To stimulate the economic growth
To guarantee the full employment
To enhance the standard of living
To improve the quality of life for its citizens

11. Country Perspective International Trade and Investment Policies
Policy measures restricting/promoting imports/exports
Policy measures restricting/promoting the inflows/outflows of foreign direct investments

12. The U.S. Embargo against Cuba and the Resolution against the US Embargo
Source:

13. The Exchange Rate of RMB versus the US Dollar
Source:

14. Websites for Haier and Huawei Group
Source:

15. Company Perspective International Risks Political Risks
1. ownership risk
2. operating risk
3. transfer risk
Economic Risks
Exchange controls, tax policy changes, price controls,
restriction in access to local financial, labor, or material markets,
value-added and export performance requirements

16. Company Perspective Cope with International Risks
First, international firms should show enough concern for their host countries and their people.
Second, international firms should always be cautious of the bilateral political and economic relations between their home nations and host nations.
Third, international firms can take out insurance against the international risks they may encounter.
Last, international firms can seek to influence government policies by developing coalitions and constituencies and providing input to the trade negotiators of their home countries.

17. The website for the PRS Group

18. Thank you