International Business Study Set 9

Business

Quiz 7 :

Economic and Socioeconomic Forces

Quiz 7 :

Economic and Socioeconomic Forces

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Can product liability be criminal? If so, in what sorts of situations would product liability become criminal behavior?
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Product liability can be criminal. This could occur if a product were designed or manufactured internationally or with criminal negligence to be harmful.

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What are competition laws, and how do the laws and the approaches differ between the United States and other parts of the world?
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Competition laws (known in the U.S. as antitrust laws) are laws intended to prevent inappropriately large concentrations of economic power. The U.S. has antitrust laws that are strict and that are enforced vigorously, with an emphasis on preventing price fixing, market sharing, and business monopolies. Other countries are becoming more active in the field of competition laws, with more than 80 nations now having antitrust laws. In the U.S., certain activities such as price fixing are considered to be illegal per se , even if no injury or damage results from them. The EU does not contain this per se concept of illegality. The EU also does not directly outlaw market dominance, only misuse of that dominance to damage competitors or consumers. The U.S. is concerned with the impact of a business deal on the consumer, while the EU is more concerned about an industry's competitive structure and pays more attention to rivals' objections. The Japanese have antitrust legislation that is modeled on U.S. antitrust law, but enforcement is much different and the body in charge of enforcement is often viewed as being rather limited in terms of its power. The U.S. government often attempts to exercise extraterritoriality in terms of application of its antitrust law, and the EU is increasingly doing the same.

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Are tariffs the only type of obstacle to international trade? If not, name some others.
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Tariffs are not the only type of obstacle to international trade. There are quotas, packing and labeling requirements, health requirements, classifications and many others.

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What are advantages of submitting contract disputes to arbitration instead of to litigation in courts?
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Use the globalEDGE site (http://globalEDGE.msu.edu/) to complete the following exercises: Transparency International's Corruption Perceptions Index (CPI) is a comparative assessment of a country's integrity performance. Provide a description of this index and its ranking. Using the most recent data, identify the five countries with the lowest and the five with the highest CPI scores according to this index. Do you see any trends between CPI scores and the level of economic and social development of a country?
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What objections do other countries have to extraterritorial application by the United States of its laws?
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A California-based company is expanding very well and has just made its first large export sale. All of its sales and procurement contracts up to now have contained a clause providing that if any disputes arise under the contract, they will be settled under California law and that any litigation will be in California courts. The new foreign customer, who is Italian, objects to these all-California solutions. She says she is buying and paying for a large volume of the products, so before finalizing the sales contract she says that the California company should compromise and allow Italian law and courts to govern and handle any disputes. You are the CEO of the California company, and you very much want this large export order. You are pleased with the service your law firm has given, but you know it has no international experience. What are the various forms of dispute resolution available to your California company? What are the advantages and disadvantages of each for your company?
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What is the significance of determining whether a country follows the rule of law?
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How does international law differ from national law? What are the sources of international law?
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A California-based company is expanding very well and has just made its first large export sale. All of its sales and procurement contracts up to now have contained a clause providing that if any disputes arise under the contract, they will be settled under California law and that any litigation will be in California courts. The new foreign customer, who is Italian, objects to these all-California solutions. She says she is buying and paying for a large volume of the products, so before finalizing the sales contract she says that the California company should compromise and allow Italian law and courts to govern and handle any disputes. In deciding whether to only use California law for settling litigation or to allow the foreign customer's home nation of Italy as the venue for litigation, would your analysis be any different if the customer was from China? From Russia? From the United Kingdom? Why or why not?
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A Threat to National Sovereignty? America's Dolphin-Safe Tuna Labeling versus the WTO img In May 2011, a World Trade Organization panel ruled that long-standing American "Dolphin Safe" labeling requirements for tuna violated international trade rules. As the first case examining the compatibility of voluntary product labeling with the WTO agreement, results of this finding against the United States could establish an important precedent-for governments, public interest organizations, consumers, and other stakeholders-of other informational labeling efforts worldwide. First a bit of background on the case. In 1959, fishermen in the Pacific Ocean region stretching from southern California to South America began using purse seine fishing methods to harvest tuna. Purse seining deploys a wall of netting a mile or more in length that encircles entire schools of fish, the bottom is pulled closed like a drawstring purse, and everything inside the net is pulled into a boat to be processed. Dolphins in this part of the Pacific tend to swim in schools above large schools of tuna, so fishing fleets seek out dolphins and encircle them with nets in order to capture the tuna that swim below. While successful in netting tuna, consequences for dolphins can be catastrophic. Millions of dolphins were trapped in nets and drowned between 1959 and 1972, and dolphin populations plummeted. Congress passed the Marine Mammal Protection Act (MMPA) in 1972, which prohibited the use by American tuna fisherman of fishing methods that would cause dolphin deaths. In 1988, the MMPA was amended to ban tuna imports from nations whose fishing fleets caught tuna using purse seine nets. In 1990, the Dolphin Protection Consumer Information Act (DPCIA) was passed by Congress, and the "dolphin safe" label was created. Tuna caught with purse seine nets were prohibited from using this label in the United States. These actions dramatically reduced dolphin deaths, from 500,000 per year in the 1960s to 15,550 in 1992 and further declines since then, reducing the threat to endangered dolphin populations. The cost of implementing dolphin-safe labeling legislation, conducting negotiations with foreign governments, and preventing the sale of tuna caught with dolphin-unsafe methods was estimated by the Congressional Budget Office at $6 million per year. The WTO ruling represents a victory for Mexico's three largest tuna producers: Grupo Herdez, Grupo Maritimo Industrial, and Pescados Industrializados, which collaborated with the Mexican ministries of Agriculture and Economy in the long-running battle to sell tuna in the United States. Beginning in 1980 under the WTO predecessor, the General Agreement on Tariffs and Trade (GATT), Mexico has repeatedly challenged American "dolphin safe" standards in what was dubbed "GATT-zilla versus Flipper." The most recent case was filed by Mexico in 2008. Although 315,000 tons of tuna were imported into the United States in 2010, Mexico asserted that "dolphin safe" standards resulted in unreasonably greater challenges to sell their tuna in the United States and violated trade rules. "Dolphin safe" labeling is a voluntary measure, and tuna harvested with "dolphin unsafe" methods can legally be sold in the United States (but not with the "dolphin safe" label), which appears to comply with WTO guidelines. However, the WTO ruled that "dolphin safe" was a techni­cal regulation rather than a standard. The WTO asserted that anything impeding nonlabeled tuna's "marketing opportunities in the United States" represents a barrier to trade and that "dolphin safe" labeling violates Article 2.2 of the WTO agreement, which prohibits technical regulations that are "more trade-restrictive than necessary to fulfill a legitimate objective." Therefore, the United States must discontinue the "dolphin safe" labeling program or face WTO sanctions. There is limited opportunity for the United States to appeal the ruling, and because the United States agreed to the WTO treaty, Article VI of the U.S. Constitution holds that the WTO agreement "shall be the Supreme Law of the Land; and the Judges in every State shall be bound thereby." This WTO ruling on "dolphin safe" labeling has been viewed by some as evidence that trade agreements such as the WTO can erode national policies enacted on the basis of public interest and welfare. Several observers have expressed concern that the WTO has established a dangerous precedent that could be extended to a range of other public policy issues, such as environmental protection (e.g., habitat protection, clean air and water) or food chain safety (e.g., limitation on use of potentially damaging fertilizers or pesticides, existence of genetically modi­fied organisms in food products). Do you think that the WTO should be able to prohibit voluntary labeling efforts that provide information of potential value to consumers in a particular nation? Why or why not?
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Use the globalEDGE site (http://globalEDGE.msu.edu/) to complete the following exercises: Your company is considering expanding to Singapore. Because of this, top management is hoping to better understand the intellectual property (IP) laws of this country. Using the Intellectual Property Office of Singapore (IPOS) website, prepare a short report on trademark protection in Singapore. In your report, include a discussion addressing the following: (a) the benefits of trademark registration, (b) registrable and unregistrable marks, and (c) the steps in the application process.
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What is the Foreign Corrupt Practices Act? What arguments or evidence can you identify in support or opposition to laws such as the FCPA?
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Why do many people from outside the United States dislike engaging in litigation in the United States?
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What are the primary types of intellectual property, and why do companies concern themselves with intellectual property issues?
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