Quiz 7: Economic and Socioeconomic Forces


" Dolphin safe " label was created in 1990 as a part of " Dolphin Protection Consumer Information Act (DPCIA). This label was prohibited for the tuna caught with purse nets. This rule has helped in reducing the death of dolphins up to a huge extent. However, this labelling requirement has created a trade barrier for other countries to sell their tuna in the US markets, which is a violation of Article 2.2 of the WTO agreement. Therefore, in 2011, WTO ruled that the "Dolphin Safe" labelling requirement for tuna has violated the international trade rules. WTO should not be able to prohibit the voluntary labelling efforts of a country that provide critical information to the consumers. In the mentioned case, the US created this labelling requirement for tuna, in order to save the deaths of Dolphins. It is an appreciative effort towards saving the environment and ecosystem. Furthermore, the US has not banned tuna harvested using "Dolphin unsafe" method from being sold in its market. The only restriction was that the tuna harvested using such methods cannot be sold with the "Dolphin safe" label. Hence, the country is not violating a trade violation act and WTO should not be allowed to prohibit its voluntary labelling efforts. WTO should not be allowed to overrule nations when their national laws are based on sound science. For example, in this mentioned case the voluntary law adopted by the Unites States for using "Dolphin safe" label was meant to protect the environment from huge damage. WTO can ensure that that the science behind local laws is sound and does not violate their protectionism rule by analyzing and understanding the motive of the country to adopt the law. They should do a comparative study on the impact of the law on the business as well as the environment. Based on this comparative study, the WTO should take its overruling decision. As per some people, member nations of WTO give up their sovereignty rights by joining the WTO. It allows the WTO to take decisions on their behalf that are not in best interest of some specific nations. However, this assumption is not completely true. By joining WTO, the member nations try to create a global marketplace with less trade barriers. However, sometimes decision taken by the WTO is considered to be fair, because their decisions are not taken openly. In order to avoid this issue, WTO should adopt more open and transparent decision making techniques.

As per the stated case, the various forms of dispute resolution available to the company C are explained below: • Legal deadlock is quite common in international contracting but it may appear daunting if the business does not work with an attorney with international experience. • It may become critical for Californian CEO to find and consult international lawyers of Italy to settle any uncertain legal dispute at the time of making exports The advantages and disadvantages of each of the above listed disputes are listed below: Advantages • An attorney might suggest arbitration of any disagreements. Arbitration is a procedure wherein a dispute is submitted by agreement of the parties to one or more arbitrators. These arbitrators make a binding decision on the dispute. • Another option could be arbitration by a tribunal of one arbitrator that can be chosen by Company C. One can be chosen by the Italian customer and the other can be chosen by an independent third party judge. In either event, the decision can be nationality neutral with the decision made by a third party who is neither American no Italian. Disadvantages • It may happen that no concrete resolution may come out of the arbitration and hence, Company C has the tendency to lose large export order. • The clause imposed by the Californian CEO may cost the company in the form of declining sales and export orders.

Each and every sovereign country is responsible for establishing and enforcing law of the jurisdiction which are to be followed by the citizens. Abiding the legal rules will help in bringing safe and secure societies in a region or a country. When any one crosses the jurisdiction then the matter of enforcement becomes complicated. The business people conducting their business internationally need to determine whether the countries follow the rule of law or not. The significance of determining whether any country follows the rule of the law is as follows: • Any country which is found not to abide the rule of the law can lead a businessmen face numerous problems • When any country is ruled by the court if law then the foreign investors knows that there interest will be protected • There is agreement of the treaties made between countries as per the international law which gives the business people operating business safely conduct their business • Even people in the countries are safe to purchase goods from suppliers of different countries as the trading is conducted through lawful agreements Hence, the significance of the determining of whether the country follows the rule of law is given in the above points.