The Importance of International Law to International Traders - Coursework Example

?Topic:  The importance of international law to international traders Introduction International law is basically the rules and principles which controls and governs the trade relations within different nations around the globe. The international law can be specifically defined as the relation between individuals and states, and relation between different organizations operating on a global level. Basically there are two kinds of laws governing the international trade scene namely: public international laws and private international laws. Public international law is concerned with the rights between nations and its citizens whereas, private international laws deals with activities between private person, juridical or natural, in concern with relationship to more than one nation. However, recently the line existing between private and public international law has been very unpredictable. Even though both these laws are connected, many times in certain areas of activities conflicts and contradictions can normally arise. 1 International Law includes the basic, classic concepts of law in national legal systems - status, property, obligation, and tort (or delict). It also includes substantive law, procedure, process and remedies. International Law is rooted in acceptance by the nation states which constitute the system. International law is a crucial aspect in international trading and it is mainly concerned with cross border transactions. Since international traders are highly subjected to international trade laws and policies, they work in good collaboration with legal professionals and international trade consultants. 1 Cornell University of Law School. 2010. International Law. [ONLINE] Available at: http://topics. law.cornell .edu/wex/ International _ law. [Accessed 18 February 11]. Legal theories and jurisprudential concepts in respect of international law The basic International legal system is the process of analyzing the practical workability of the international trade functions related to international policy, and the way in which the international law standards can increase the trade efficiencies .It primarily concentrates more on the usability of laws by the foreign policy makers rather than the exquisite content and exposure of it. International law, distinctively explains the way in which the international legal transactions work and the way in which the foreign organizations incorporate these law in their working system. International law policies and strategies controls trade dealings and avoids manipulation and exploitation in the international commercial activities. 2 For some thirty years international law has been isolated from the rest of the intellectual life by the necessities and distractions of the two world wars. As these early modernists told the history of their discipline , their predecessors, the classic scholars who were ideologically split in to two armies , had turned international law in to a battlefield. The real value of the international law policies is that it gives many areas for the traders and people to work on trade relations and transactions. It is a known fact that United Nations, being the promoter of peace, aim for the peace and tranquility in all the dealings occurring on global level. 3The main aim of the United Nations is the preservation of world peace. It is strongly believed that increased international trade, 2 .Pervis, N, 1991. Critical Legal Studies in Public International Law. Law Journal , 32/1, 81-89 3.J.W.T.Chan. 2007. Modern Law for Global Commerce. [ONLINE] Available at: http://www.uncitral.org/ pdf/english/congress/Chan.pdf. [Accessed 19 February 11]. Which carries with it the increasing interdependency of nations as well as greater and better interactions between the people of the world is a strong contributing factor to world peace. Thus the strong support by the United Nations to all initiatives that would remove obstacles to world trade, such as initiatives to harmonize or unify the rules of international trade law. Human society which we survive in is undoubtedly organized by division of states and each of it has its own legal rules to adhere to within it s own territory and outside. Our world is a play ground restricted by legal restrictions and boundaries and this very well makes the game of trade and transactions an interesting activity to indulge in. For this very same reason, when it comes to transactions and people, there exist numerous laws and rules concerned with international trade and business. For example, the progress of many under developed countries in the recent years has made the concept of international law very important and crucial. 4Developing countries like Brazil, China and India have emerged as key players in the provision of manufactured goods and services on the international scenes and setting a trend for other developing nations to follow.The globalization of the world has led to a great expansion the global market scenario and all organizations rely largely on judiciary laws and principles formulated by law bodies. 5In looking to realize on the opportunities presented by the expansion of global markets, companies rely on a variety of corporate transactions that are familiar in a 4 .Carr, I., 2010. International Trade Law . 1st ed. New York: Routledge - Cavendish Publishing ltd 5 .Mckenzie, Baker . (2010). Cross border transactions handbook. [ONLINE] Availableat;www.bakermckenzie.com/files/Uploads/../bk_crossbordertransactions.pdf[Accessed 18 February 11]. strictly domestic context, including mergers, acquisitions, dispositions, joint ventures, strategic alliances and business process outsourcing. Similar to a transaction within a single jurisdiction, the choice of which transaction structure to use will depend on a company’s overall business strategy”. Cross border transactions and international law Cross border transactions have taken a large place in the current era and domestic and international trade and transactions have grown at an exorbitant rate. This evidently, has given rise to more complex and complicated trade situations and which calls for better implication of legal laws and jurisdiction. In recent times with the steady expansion and progress of industrial sector, the pace of business dealing and transactions has highly raised. 6Cross-border mergers and acquisitions, although presenting many of the same issues as domestic deals, are usually more complex and rife with surprises and other pitfalls. In recent years this complexity has grown along with the pace of globalization. The sheer range of concerns has expanded as the speed and volume of international deals have increased”. The complexities that emerge in the internal and external boundaries of trade environment have given much importance to the value of international lawyers. The heavy burdens of carrying out international trades have given way to the wide usage of international trade consultants and lawyers .7As economies further improve, we expect cross-border deal activity to continue to rise as perceived rewards begin to outweigh 6. Buller, C.J. 2004. Managing Your Cross-Border Transactions. [ONLINE] Available at: http://library.findlaw.com /2004/Jul/22/133528.html. [Accessed 19 February 11. 7. United Business Media Company. 2011. M&a deal activity in industrial manufacturing sector.[ONLINE] Available at:http://www.prnewswire. com/news-releases/ma-deal-activity-in-industrial-manufacturing-sector-shows-continued-momentum-with-226-billion-in-q4-deal-value-making-up-almost-half-of-full-year-2010-total-116392494.html. [Accessed 19 February 11] perceived risks," added Misthal.  "The need of corporations to augment slow organic growth by entering new, faster-growing geographies and repositioning their product portfolios for increased growth will also aid this up tick in cross-border activity”. Cross border transactions implies considerable scope for economic growth and increased shareholder and investor worth. However, the business gains obtained by means of cross border transactions generate high cost, added tax payments which can really hinder the profit outcome of the corporate and companies. 8Small and medium-sized businesses need to do a better job of structuring cross-border sales. All businesses should ensure they have all their documentation in order for any kind of cross-border transactions. The cross border transactions are extensively supported by the opinions and values by the international legal consultants and experts and this makes the international transactions way better for international traders and business corporate. 9 Dedicated full-time to the transaction structuring business, our cross-border team’s work together regularly on deal after deal. Our familiarity with this fast-paced environment enables us to anticipate the nuances inherent in transactions and to respond rapidly with valuable, well-informed advice and visible results. 8.Bivinteractive. 2011. Canadian businesses less-than vigilant on $1.5 trillion worth of cross-border sales: E&Y . [ONLINE] Available at: http://www.bivinteractive.com/index.php?option=com_ content&task=view&id= 3802&Itemid=46 . [Accessed 19 February 11]. 9 .Ernst & Young. 2011. Cross-border transactions. [ONLINE] Available at: http://www .ey.com /US/en/Services/ Tax/International- Tax/Cross-border-transactions. [Accessed 19 February 11 Legal concepts and its relation to public and private sector 10“Infrastructure is vital to the development of an economy. The availability of essential Infrastructure such as water, sanitation, transport, electricity, telecommunications and health services are not only important to the living conditions of the people in the economy, but they are also necessary conditions for investment in and development of the economy”. A modern economy thrives hard on the industrialization and free trade transaction among the countries on a global level. The nature of the organizations and companies holding transactions are primarily of two nature : public and private companies. Thus, these companies have their own juridical concepts and policies to work within. The public and private international laws may very well be formulated by the means of international instruments, but their can often arise conflicts and contradictions according to the nature of transaction and countries involved in the trade. 11The general situation might describe the complementarity of public and private sector research activity, especially that which is pre – competitive, involving both private sector failure and advantages of commercial orientation(p.142).In order to evaluate the scope of international law, it is mandatory to acknowledge the connection and relation that exist between private and public international law concepts. The international traders use the legal procedures and policies coming under their national jurisdiction to practice trade and commercial activities. The transaction of goods and services across the border is of a very complicated nature and in the absence of appropriate statutory laws and restrictions activities can go out of control. 10. United Nations Economic and Social Commission for Asia and the Pacific. 2010. A Legal Perspective. [ONLINE] Available at: http://www.unescap.org/ttdw/ppp/trainingmaterials/PPPs_Legal_Perspective.pdf. [Accessed 18 February . 11. Dietrich , M., 2008. Transaction cost economics and beyond: towards a new economics of the firm . 2nd ed. London: Routledge 12Today, one international trade law stands as one of the most successful international systematic laws. This is the United Nations Convention on Contracts for the International Sale of Goods (CISG). This treaty has been ratified by 74 countries; it provides a compatible international sales law. Still there are number of countries who have not yet joined the league of international trade and union conventions, due to their lack in infrastructural and economical growth.Neverthless, the absentee nations can be joined in the group and gradually they also would become a part of the globalize economy and trade. It is a saddening fact that, the underdeveloped countries in the Far East and Asian continents are less benefited from their exports and imports of raw materials and manufactured goods than the developed nations. 13The very idea of Free Trade is, of course, a noble one. The idea is to bring the third World nations of Latin America, Asia, and Africa into a fair competition with, and economic parity with, the Western countries. Now since the concept of borderless economy is getting evolved , more and more opportunities are being explored and implied by international trade organization and bodies to bring out the best of all nation. The underdeveloped countries like Bangladesh, Cambodia, countries of African continents need a real help from world leaders to explore their trade possibilities and resources. Even though unfair trading is a part of the international business scene, some developments are observable on the intentional and national level. 12.Unpeace Maker. 2010. International Trade laws: the need for them past and present.. [ONLINE] Available at: http://www.unpeacemaker.org/international-trade-laws.html. [Accessed 18 February 11]. 13. Van den Cate, R., 2009. THE IMPACT OF INTERNATIONAL TRADE ON LESS DEVELOPED COUNTRIES. Business Intelligence Journal , 2/1, 120-136. Scope of advancement in the international law scene Trade liberalization is a primary aspect for a considerable success of the economic development on a national and international level. To have a sustainable development in the trade sector a proper understanding and utilization of trade policies and laws are greatly needed. Unfortunately, the working process of international business transaction is not static as trade policies of different national conflict at different points. This can hamper the trade activities on many levels and can create delays and even obstruct the achievement of sustainable development in the right way. 14Global financial stability is the most fundamental prerequisite for sustainable development. Over two years after the 2008 credit crunch and the beginning of the ensuing financial crisis, politicians, policy-makers, legislators and financiers continue to debate on how best to create a stable, resilient and robust financial system that can deliver sustained and balanced economic growth. It can be seen that developing countries like china has pushed its investment policy to reach to the central spot in the field of export and import on global level. The country has grown in to a huge manufacturer, exporter and importer in recent years. This has uplifted the potentiality of their investment capabilities and given more opportunity for the other under developed countries to look up to. This re-establishes that consistent upgrading of international trade laws and policies are essential for the sustainable growth of any nation or organization. 14.IISD. 2011. International Trade. [ONLINE] Available at: http://www.iisd.org/trade/. [Accessed 19 February 11]. Conclusion International trade in these modern times is the core of national and international economical and social development. It is the activity concerned with exchange of capitals, goods and services between national and international companies. 15Countries have become more interdependent, and the world more increasingly globalize because international trade has far outpaced growth in over all global economy (and in world pop- ulation as well.(pg.279).Through out the history, the trade scenarios have evolved and has reached great heights .The political, social and economical importance of trade and commercial activates have given new meaning to the legal frame -work related to international trade .The development and progression in transport, communication and technical field has given a new dimension to the commercial world and demands a high legal strategy from national and International legal authorities. At the present stage, China and India are the rapidly progressing nations and the former has occupied the leading position in the international trade scenario. Every country in the progressive stage is upgrading and closely monitoring the trade policies to make the working procedures of commercial activities across the international boundaries easy and comfortable. Another major factor is that international trade is far more expensive and cost consuming than domestic trade and a strong and flexible trade policy is very essential for the free trade among nations to grow economically in a consistent way. 15 . Kegley, C.W., 2009. World politics: trend and transformation . 2nd ed. Californai: Wadswort Bibliography Buller, C.J. 2004. Managing Your Cross-Border Transactions. [ONLINE] Available at: http://library.findlaw.com/2004/Jul/22/133528.html. [Accessed 19 February 11 Bivinteractive. 2011. Canadian businesses less-than vigilant on $1.5 trillion worth of cross-border sales: E&Y . [ONLINE] Available at: http://www.bivinteractive.com/index.php?option=com_ content&task=view&id= 3802&Itemid=46 . [Accessed 19 February 11]. Cornell University of Law School. 2010. International Law. [ONLINE] Available at: http://topics.law.cornell.edu/wex/International_law. [Accessed 18 February 11]. Carr, I., 2010. International Trade Law . 1st ed. New York: Routledge - Cavendish Publishing ltd. Dietrich , M., 2008. Transaction cost economics and beyond: towards a new economics of the firm . 2nd ed. London: Routledge. Ernst & Young. 2011. Cross-border transactions. [ONLINE] Available at: http://www.ey.com/US/en/Services/Tax/International-Tax/Cross-border-transactions. [Accessed 19 February 11 IISD. 2011. International Trade. [ONLINE] Available at: http://www.iisd.org/trade/. [Accessed 19 February 11]. J.W.T.Chan. 2007. Modern Law for Global Commerce. [ONLINE] Available at: http://www.uncitral.org/ pdf/english/congress/Chan.pdf. [Accessed 19 February 11]. Kegley, C.W., 2009. World politics: trend and transformation . 2nd ed. Californai: Wadswort Mckenzie, Baker . (2010). Cross border transactions handbook. [ONLINE] Availableat;www.bakermckenzie.com/files/Uploads/../bk_crossbordertransactions.pdf[Accessed 18 February 11]. United Business Media Company. 2011. M&a deal activity in industrial manufacturing sector shows continued momentum, with $22.6 billion in q4 deal value making up almost half of full-year. [ONLINE] Available at:http://www.prnewswire. com/news-releases/ma-deal-activity-in-industrial-manufacturing-sector-shows-continued-momentum-with-226-billion-in-q4-deal-value-making-up-almost-half-of-full-year-2010-total-116392494.html. [Accessed 19 February 11] Pervis, N, 1991. Critical Legal Studies in Public International Law. Law Journal , 32/1, 81-89 United Nations Economic and Social Commission for Asia and the Pacific. 2010. A Legal Perspective. [ONLINE] Available at: http://www.unescap.org/ttdw/ppp/trainingmaterials/PPPs_Legal_Perspective.pdf. [Accessed 18 February 11 Unpeace Maker. 2010. International Trade laws: the need for them past and present.. [ONLINE] Available at: http://www.unpeacemaker.org/international-trade-laws.html. [Accessed 18 February 11 Van den Cate, R., 2009. THE IMPACT OF INTERNATIONAL TRADE ON LESS DEVELOPED COUNTRIES. Business Intelligence Journal , 2/1, 120-136. Read More