1. © 2004 West Legal Studies in Business, a Division of Thomson Learning 8.1 Chapter 8 International Business: Public Law

2. 8.2 An Introduction In international law, the “law of the jungle” prevails: “might makes right” However, custom, fairness, private covenants, and treaties supplement the power ethic, equating to the definition of “international law”

3. 8.3 The Sources of International Law TreatiesBilateralMultilateralConventionsCustoms

4. 8.4 Nature of U.S. International Trade Economic isolationism High tariffs, quotas, and trade barters Tariff Act of 1930 (the Smoot-Hawley Act) Other acts affecting trade Reciprocal Trade Agreements Act Trade Act of 1974 Trade Agreements Act of 1974

5. 8.5 Nature of U.S. International Trade Current policy Favors international trade Informal “understanding” exists between Japanese and U.S. officials regarding Japanese-made cars The U.S. declining dollar is a factor NAFTA is not a totally-free trade agreement

6. 8.6 Theory of Comparative Advantage Comparative advantage A nation should specialize in the goods it produces best It is a major philosophy behind international trade It does have disadvantages Normal trade (previously “most-favored- nation,” or MFN) clauses in treaties

7. 8.7 Institutions Affecting International Business GATT and its offspring, the World Trade Organization WTO outlaws tariff discrimination for WTO members WTO outlaws nontariff barriers WTO/GATT places caps on tariffs UNCITRAL

8. 8.8 The European Union Members are Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Spain, Finland, Sweden, and the U.K. The Maastricht Treaty created the EU

9. 8.9 Provisions of NAFTA Rules of origin NAFTA’s safeguards NAFTA’s environmental protections Environmental measures are limited if they restrain trade NAFTA makes no provisions between environmental standards and a population’s lifestyle

10. 8.10 U. S. International Trade Commission Functions Generalized system of preferences Industry adjustments to import competition Import interference with agricultural programs Comparing unit labor costs among nations

11. 8.11 Protecting Intellectual Property Includes patents, copyrights, and trademarks Special 301’s purpose Special 301’s requirements

12. 8.12 Protecting Intellectual Property Identification of 301 countries Sanctions Other aspects of 301 May add to the list of “priority” foreign countries at any time Has power to revoke prior foreign country status at any time

13. 8.13 U. S. Antitrust Laws Extraterritorial effect Antitrust law control of business outside the U.S. Who can sue for extraterritorial antitrust violations Who can be sued Antitrust exemption

14. 8.14 Antitrust in the EU The Helms-Burton Act Seeks to punish countries who seize U.S. businesses Is controversial because critics say it violates principles of free economic trade

15. 8.15 Kyoto Treaty Major environmental initiative Criticized for its perceived slowing of economic development Two ways to soften the impact of Kyoto Credits Carbon dioxide sinks

16. 8.16 Recap – Terms to Know International law Economic isolationism Most-favored-nation status WTOUNICTRALEUOPIC Helms-Burton Act