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International Law Paper

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International Law Paper

Years ago, companies would perform business within their own cities or regions. Oftentimes these business transactions were simply to survive and provide the good or service needed by the locals. Throughout the years, technology has advanced and the human race has become more demanding on fulfilling both their needs and wants regardless of cost. This demand has opened the opportunity for businesses to expand far beyond their local community, even into the international community. These business endeavors have brought about international trading, licensing agreement, and foreign investments. With all the various backgrounds in the world making these transactions, international business laws needed to outline social, environmental, and ethical expectations.


International trading and continual monitoring of these procedures are the backbone of successful international business transactions. At first, one thinks of trading as merely the importing and exporting of goods or services. International trading also includes dealing with barriers associated with tariffs, quotas, embargos, and boycotts. These barriers provide the government some additional tax revenue, protect national security, restrict the amount of imports to help domestic producers, restrict trade with certain countries, and even restrict trade with certain businesses of specific countries. Often domestic businesses lack the capacity to enter the international market; therefore, they use firms to help them on this endeavor. These firms are known as export trading or management companies.

Licensing agreements and intellectual property

With international business comes the issue of intangible property-copyrights, patents, and trademarks. Intellectual property rights and international licensing agreements help control the lawful use of intangible property. According to International Business Law and Its Environment intellectual property rights are, "a grant from a government to an individual or firm of the exclusive right...for a specified time" (2009, p. 14). The book continues to outline that licensing agreements are, "contracts by which the holder of intellectual property will grant certain rights in that property to a foreign firm under certain conditions and for a specified time" (2009, p. 14). The legal use of intangible property and licensing agreements help reduce difficulties with entering a foreign marketplace. Businesses can enter the market easier with quicker consumer recognition or by using foreign manufacturers to produce the products rather than deal with shipping and trading issues.

Foreign direct investment

Rather than trading, dealing with intellectual property rights, or international licensing agreements international businesses can consider foreign direct investment as an option. Foreign direct investment is either investing directly in an already established foreign business or penetrating the foreign country's marketplace to the point of complete operational sustainment without the need of imports. The auto industry is a perfect example of foreign direct investment. The United States has multiple foreign automakers with established local manufacturing; consequently, various countries have American automobile manufacturing operations established in their countries.

Managing risks

International business transactions pose several risks to include those associated to politics, economics, legal differences, and shipping risks. If political tensions increase between two countries this could affect how the consumers shop or even cause changes with tariffs, quotas, embargos, or boycotts. An unforeseen economic collapse



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