Ways Parts Ltd Could Transfer Its Business into the Brazilian Market - Assignment Example

?International Business Law Introduction International business involves business activities straddling two or more nations. The phenomenon of globalization has greater effects and impacts on international business. Today there is a fundamental shift in the global economic foundation and grouping. There has been a constant move away from a global society whereby the national economies are isolated from one another. This is due to barriers such as across-the-border investment. Other factors creating such barriers include differences in business systems, language, distance and time zones. There are also the developing and developed countries with different interests and perspectives to global trade liberalization. There are various factors that are covered in the international business law. Such factors will be critically explored through examining Parts Ltd and its business transactions internationally. This paper will thus give an assessment of the contrasting perspectives and interests of Parts Ltd with respect to global trade liberalization. Various Ways Parts Ltd Could Transfer its Business into the Brazilian Market With reference to business regulations, there are various factors, which are put into consideration when it comes to transferring business from one point to the other. As a rule, such ways of transferring business internationally usually goes hand in hand with international business laws (Matthew, 2004, P. 18). That is been the case such ways forms a benchmark from where operating the business in the new environment is enhanced accordingly. Parts Ltd could enter into the Brazilian market through various ways. In that case, the firm can enter the Brazilian market through a joint enterprise with a host nation firm, and through exporting and licensing or permitting hosting country firms. What is more, the firm could enter into the Brazilian market through an entirely owned subordinate in the host nation to serve that market (Brooks, 2010, P. 36). Despite this different ways through which the firm can enter into the Brazilian market, it is worth to note that the disadvantages and advantages of each mode of entry is determined by various aspects accordingly. Such costs take account of the firm strategy, economic and political risks, trade barriers and transport costs. Explore the Various Trade Barriers, If Any, Which Could Affect Parts Ltd’s entry into the Brazilian Market From a description perception, trade barriers denotes to government-placed limitations on trade between countries. The most widespread forms of trade barriers take account of things such as tariffs, subsidies, quotas, embargoes, and duties. Such things will be critically analyzed in relation to how they are predicted to affect Parts Ltd, and conducting its business (Bernard & Schott, 2007, P. 106). The expression free trade denotes to the hypothetical removal of all trade barriers, permitting for entirely free and unregulated trade. If truth be told, however, no country completely embraces trade which is free. This is because countries utilize some variety of trade barriers for their own advantage. In any international business, trade barriers are always expected and so appropriate measures must be employed in order to combat their occurrences. From the history of the world, there has ever been the need of having the entire globe engaged in forms of trade which have the ability of increasing their performance and operations thus improving their development in terms of economy (Charles, 2009, P. 5). This had been suggested in form of a free and fair trade which was aimed at ensuring that all nations would engage in useful business and trade operations. However, there have been divergent views with the issue as majority of the people do argue that the present ‘free and fair trade’ operations have never in the least been fair. This is an implication that trade barriers are prone to happen whenever doing international business. Evidently through studies, tariffs, like nearly all trade barriers, are imposed for different motives. For instance, some tariffs are put in place so as to earn money for the regime. This could either be a fixed fee on an item, or it could be based on the market price of the item. Comparables tariffs exist as a type of protectionism, which makes the goods that are imported expensive than they might otherwise be (Bernard & Schott, 2007, P. 108). This is usually done with the deep intention to protect domestic industries. In that case, these tariffs will considerably hinder the manner through which Parts Ltd will conduct its business. A comparable trade barrier that can hinder the entry of Parts Ltd in Brazilian market is subsidies. In essence, subsidies are common trade barriers, and are over and over again placed to defend domestic industries. Subsidies may in point of fact be projected simply to make certain main goods reasonably priced to citizens of the country. However, the end outcome can still be to make imports not highly competitive (Matthew, 2004, P. 29). Numerous food crops, for instance, are heavily subsidized, to make sure the citizenry have a constant supply of inexpensive food. Steel is as well often subsidized, to guarantee a country always has a domestic steel supply, which can be vital during times of conflict when usual shipping avenues may be cut off. In its implication, one can deduce that such subsidies will make it hard for Parts Ltd to conduct business in the new markets. Another trade barrier expected to hinder business operations in the new market is an embargo. With reference to business, an embargo is considered as the most tremendous of the trade barriers. Basically, embargoes forbid the export or import of anything with another nation (Matthew, 2004, P. 35). This is often performed as a form of punishment, or to attempt to force the nation to undergo radical change inside as a consequence of a weakened economic rank. Through historical viewpoint, the embargo was employed as a war approach, and so was often seen as a declaration of war. In current times, nevertheless, although the most atrocious of the trade barriers, it is more often than not not considered as an act of absolute hostility, even though a declaration of war is often accompanied by an embargo. It is worth to contemplate that, tariffs are a somewhat common form of trade barriers, and are fundamentally taxes on goods as they go across the borders of a country. Tariffs almost all the time are placed on goods that are brought into the nation, as it is not the case to goods sold as exports (Brooks, 2010, P. 39). However, in some instances, they may go both ways. Over several years, tariffs have been a large source of government income, as they could easily be gathered as a tax on ships as they landed in the country. What Role does International Law Organizations Play in Removing Trade Barriers? Various actions or measures are usually put into considerations by international law organizations towards removing trade barriers. In one way or the other, trade barriers are removed in order to promote a smooth flow of business, and endorse the realization of gains in the long run (Bernard & Schott, 2007, P. 110). That is been the case there are various roles that international law organizations play towards removing such barriers. Several free trade organizations exist in the globe to attempt to restrain the use of trade barriers by countries. For instance, the World Trade Organization is possibly the widest reaching of such organizations, which has been highly involved in creating new rules to govern international business (Matthew, 2004, P. 45). In that manner, the WTO enforces strict regulations in opposition to member countries, restricting the satisfactory use of factors like tariffs. Consequently, some nations have started using trade barriers that are not tariffs, but have identical effects. There are various ways through which such organizations work towards limiting trade barriers in the global perspective. For instance, the European Union does not agree to the import of lots of genetically-modified organisms (Charles, 2009, P. 14). This effectively bans the vast most of food imports from the United States. In current years, groups like the WTO have stated to look at such forms of trade barriers in addition to strip them when doable. Different nations have come up with their own dictated subsidies which have been able to see them protected while still engaged in the free trade (Matthew, 2004, P. 56). The other nations have not been given such protection in their trade operations, and therefore their engagement in the trade operations have not been giving them the necessary profits like their counterparts in the other nations. This has been one major reason why most of the third world nations have been keen in coming up with new measures and adoptions which can promote trade operations and make the global trade fair enough (Bernard & Schott, 2007, P. 113). Without addressing this big issue, it is something very true that the current engagement within the global free trade has not been fair they way it ought to be. Majority of the business and trade participants have been doing this so as to earn profits within the shortest time possible. When such people fail to achieve better profits for engaging in such business activities, it becomes something very damaging, and thus calling for newer approaches in which the trade has to be made much fair and effective for all. For instance, about two-fifths of about all the entire budget for the European Union have been going ahead on subsidizing the farmers while putting the food producers in all parts of the globe at a very unfair and unwelcoming disadvantage. On the other hand, the American farmers and others in the developed nations have been protected by the subsidies which have been regulated in their nations (Brooks, 2010, P. 43). This practice of subsidies have been comfortably protecting such individuals and thus failing to give the necessary similar addressing for the exporters from other nations. While the greatest concern in the global trade has been in making it very fair and ensuring all people have been able to benefit from it, that has not been achieved since majority of the players have failed to engage in a truly fair trade. How the World Trade Organization Settles Trade Disputes Ever since its beginning in the year 1995, the World Trade Organization (WTO) has mediated trade disputes between its associates in part by determining whether unilateral proceedings by its 134 member countries for instance trade bans or restrictions infringe international free trade regulations and approving penalties in opposition to members that are found to be disobedient with such terms (Charles, 2009, P. 23). Those who consider its weight on free trade destabilizes national environmental and public health defense efforts condemn the WTO. For all intents and purposes, there are various ways through which the World Trade Organization settles disputes related to trade. This is a clear illustration concerning how the organization attempts to solve such disputes (Bernard & Schott, 2007, P. 117). Current disputes regarding the importation of hormone-treated beef and genetically modified crops have paid the attention on how the WTO adjudicates disputes having environmental and public health insinuations and sparked disapprovals as to whether the organization is competent to do so. Based on this illustration, the WHO attempts to solve such disputes with reference to the terms set for the organization, and the manner through which it solves any emerging dispute in terms of trade barriers. Today, a number of theorists and business analysts have described a number of concepts through which one is able to effectively measure the overall performance of a given business not through their financial standings and the amount of profits gained, but as well through analyzing how management of the people working for the organization. This also looks at the manner in which the environment is conserved and taken care of while engaging in any kind of international business. While engaged in business operations overseas, the first thing worth considering is not harming the nation where the business operation is being carried out. This is to say, the kind of business engagement should not harm the society. A company, which fails to observe this ethical responsibility while conducting international dealings in business, while lack clients and fail to realize profits. When talking of ethical responsibility, it means that the organization should right away begin by cleaning its own premise. While all businesses and organizations exist with the sole aim of making handsome profits, the responsibility aspect is vital, and this is where the ethical issue or approach lies (Charles, 2009, P. 28). The manner in which money and profits are made within the given business is where ethical responsibility lie. The meaning of this is that, should a given firm realize that it is making good cash through involvement in harmful behaviors which are potentially damaging to the people, or selling to the people different products which can affect them, then it must be standing in a very shaky ground in terms of its ethical performance. This will harm the business operations in a very big way (Bernard & Schott, 2007, P. 121). If this business is operating overseas, chances became very high that the operations might be terminated within a given period of time. This has happened to a number of business firms like the McDonald’s believed to have had supplying foodstuffs not fit for people’s health. There has been an increase in protesters who are after making sure that this issue of unfair global trade has been addressed. With historical developments, the developed nations have been greatly taking unnecessary advantage with the free and fair trade in which they have been utilizing a number of internal subsidies which protect their own people and at the same time exploit the undeveloped nations. In the so called free trade world, the current protesters have always claiming that this fair trade has been nothing better but a plot which has been aimed in developing the world having natural resources while wrecking the environment. On the contrast, a number of liners and laissez-faire ideals and thinkers have been against the free trade. Basically, the international fair trade is a form of trade which has no interference from any form of tariffs, prices, subsidies, and controls which have no influence on the logistics and operations on the trade operations (Brooks, 2010, P. 56). While having the free trade, the aim has been in coming up with a new prosperity. For the years the free trade has been in place, therein have been a number of problems which have been faced when trying to proof and judge whether this free trade has been fair. Like what socialism has been, it has led to very many problems in which the poor hardly ever been put into practice wholeheartedly; purists have to look back to Hong Kong in the 1960s for an countries have continued have continued to get oppressed. Majority of the business and trade participants have been doing towards attaining benefits in the long run. In the event when such people fail to achieve better profits for engaging in such business activities, it becomes something very damaging, and thus calling for newer approaches in which the trade has to be made much fair and effective for all (Matthew, 2004, P. 89). For instance, about two-fifths of about all the entire budget for the European Union have been going ahead on subsidizing the farmers while putting the food producers in all parts of the globe at a very unfair and unwelcoming disadvantage. . On the other hand, the American farmers and others in the developed nations have been protected by the subsidies which have been regulated in their nations. This practice of subsidies have been comfortably protecting such individuals and thus failing to give the necessary similar addressing for the exporters from other nations (Bernard & Schott, 2007, P. 125). While the greatest concern in the global trade has been in making it very fair and ensuring all people have been able to benefit from it, that has not been achieved since majority of the players have failed to engage in a truly fair trade. Conclusion Economists believe that liberalization of trade can positively affect growth of a nation’s economy. However, the greatest issue is how the existing many interests of the growing and developed nations must be addressed because they have a great impact too. Currently, liberalization of international trade is pushed by the international nations to promote the developing nations through adjustment of loans and adoption of the WTO negotiation towards a liberalized global market. The main concern is how the industrialized nations will address the issues raised by the developing nations in order to help them realize their goals. It would also be necessary for the World Bank, WTO, and the IMF to focus on the elimination of non-tariff barriers applied by the developed nations. This will make it possible to achieve a liberalized trade in the developing nations. The WTO should advocate for policies that favor the development of poor nations. This approach will help transform the international trade and make every partner benefit adequately from international trade. The interests of these two groups should be considered towards the liberalization of mutual trade. If the developed nations liberalize their imports, it will be possible for the developing nations to get better returns and as a result promote economic growth and sustainability (Brooks, 2010, P. 59). There will also be need to maintain an asymmetry between the two groups of nations because their economies are founded on different balances and expenditures. In conclusion, the main idea is to know how to make a level ground for international trade and address the specific concerns of the two parties and address them accordingly. Bibliography Bernard, A, & Schott, E, 2007, Firms in international trade. Journal of Economic Perspectives. Vol. 21, No. 3, pp. 105-130. Brooks, I, 2010, International Business Environment: Challenges and Changes. New York: John Wiley and Sons. Charles, H, 2009, Global Business Today 6e, McGraw-Hill Companies, Inc Matthew, P, 2004, International law and organizations, Journal of Foreign Accents, Vol. 10, No. 2, pp. 1-145. Read More