Commercial Law in the United Arab Emirates - Assignment Example

Name: Instructor: Course: Date: Commercial Law Task 1 Vocabulary VOCABULARY WORD DEFINITION Transnational institutions These are wide variety of trade-related business entities involved or operate in at least two countries. They usually have a headquarters that is based in one country with other facilities based in different countries. Examples of these transnational institutions include UN, WTO and IMF. General Agreement on Tariffs and Trade This was an agreement between many countries to regulate trade. The purpose of this agreement was to “substantially reduce tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis” (World Trade Organization, 2009). The General Agreement on Trade and Tariff (GATT) also involves Intellectual Property (IP) rights European Union The European Union can be defined as a joint effort of 27 European countries that form a jointly beneficial community both economically and politically. The goal of EU is to help developing nations economically and at the same time uniting Europe itself. Import control Import control is a kind of trade restriction on imported goods and services into the country and it is a result of protectionism. Copyright Copyright is a legal perception of giving the original work creator exclusive right to it by government for a limited time. In other words, it is a document giving exclusive rights to an individual, a business organization or a legal entity to work. Trademark A trademark can be defined as a distinctive sign (indicator) used by an individual or business organization to identify for customers that the goods and services on which that sign appears came from a source meant for a specific market and goods or services are different from those of other entities. Or in short, a trademark is a sign that uniquely differentiate a particular company or individual from others. Inflation Inflation is defined as a widespread increase in prices for goods and services and it may occur over an extended period of time. Inflation reduces the value of money and this will force consumers to spend more on goods and services. WTO World Trade Organization (WTO) is an organization with a goal to manage and liberalize international trade. Its other aims are to help producers of goods and services, exporters, and importers conduct their business fairly as per trade rules. IMF IMF is an international organization with the goal of promoting the maintenance of a healthy world economy. Trade sanction Trade sanctions are penalties charged by one country against one or more countries in order to achieve economic policy, political or military objectives. Quota system A quota system is where an individual or an organization target a certain sales volume from selling goods within a given time. Patent A patent is a form of intellectual property. It is all about exclusive rights (protection) given by a country to an inventor for a limited period of time, and this protection is a very important part of any new invention. GDP Gross domestic product (GDP) is the total market value of all goods and services produced within a country over a given period of time, usually a year. Unemployment Unemployment means to the incapability for willing workers to find an employment. Workforce Work force is the total pool of workers who are ready and willing to work. These include both job seekers (unemployed) and people who are employed. Gdp/capita This is usually refers to a group of people and some form of income either earned or spent. Poverty Poverty can be defined as the state of lacking resources that would provide people with basic necessities. Poverty can force people to go without basic needs like food, clothes and shelter. Taxation Taxation is to impose a financial charge upon individuals or entities by a country (state) and whoever fails is punishable by law. Monetary system A monetary system is a system developed by a government to make easy exchange and also generate and measure wealth and debt Rule of law The rule of law is the basis of the justice system of a country whereby no one is above the law and everyone is equal under the law. Labor law Labor law is the body of administrative rulings (laws) that are designed to protect employees. Emiratisation Emiratisation is a plan by the government of the United Arab Emirates to provide jobs for its own citizens. Gratuity A gratuity is a small amount of money given to a service worker as a gift in recognition for his/her service Task2 Country business profile The United Arab Emirates (UAE) is currently on its rapid expansion process, with Emirati governments helping both in public and public-private ventures by spending the proceeds of high oil prices and international investments in the region. They have not only increase in availability of funds, but invest in human capital and in improving in the rapid growth of the non-oil sector. The UAE has been a regional leader when it comes to economic and innovative plans since it was established as a Federation. Business and economic data for the 6 GCC countries and 4 other countries. Country GDP exchange rate Population GDP per capita Inflation rate Unemployment rate YOUTH School life Workforce UAE $360.1 Billion 5,314,317 $48,800 0.9% 12.1% 13 years 4.1 Million Kuwait $176.6 Billion 2.9 Million $62,700 4.7% 2.2% 2.4 Million Qatar $173.0 Billion 1.9 Million $92,500 1.9% 0.5% 1.4 Million Saudi Arabia $576.8 Billion 28.1 Million $20,500 5% 10% 7.64 Million Oman $71.8 Billion 2.8 Million $25,200 4.1% 15% 920,000 Bahrain $22.9 Billion 1.34 Million $18,200 -0.4% 3.8% 655,000 Yemen $33.8 Billion 24.8 Million $1,400 16.4% 35% 6.5 Million Egypt $229.5 Billion 82.5 Million $2,800 10.1% 12% 26.1 Million Iran $331.0 Billion 74.8 Million $4,500 20.6% 12.4% 25.7 Million Israel $242.9 Billion 7.8 Million $31,300 3.5% 5.6% 3.2 Million Website used: www. worldbank.org Task 3 Usually the main aim of import quotas, tariffs and duties is generally to protect home industries that are more likely to fail against international giants (Cadogan, 2010), but in poor countries this is not the case because most developing countries do not have their own industries to protect and therefore, import quotas, tariffs and duties are of no benefits but to hurt their standard of living. As far as this question is concern, poor or developing countries in most cases prefer free trade where there is no trade controls for goods and services they import. Poor nations in most cases import more than they export and therefore any tariffs, quotas and import duties impose on goods and services into the country will hurt their standard of living because these goods and services into the country will reduce dramatically because individuals or organization will not be willing to pay for goods and services with high tariffs, quotas and import duties, hence decrease welfare of domestic consumers. Since tariffs and quotas can reduce the total goods into the country, the demand will shoot up and this will drive prices up and consumers' purchasing power is affected (Motoshige, 1982). As we have seen above, governments usually set import quotas and tariffs in order to encourage domestic production (Cadogan, 2010). This will often boosts local economies, but in some cases, it can lead widespread corruption. This happens when companies will try, sometimes, to avoid importing tariffs and quotas by bribing officials by big companies and smaller companies cannot compete. Import tariffs, quotas and other import duties have been known to create a black market for products. This is because consumers will turn to illegal methods of obtaining the goods they desire without import duties. Every country collects revenues so as to support its functions economically. Placing more import tariffs on foreign goods is one way getting more revenue, but in developing countries, corrupt officials may take an advantage of this and imposing any duties on imported goods is of no help to the economy (standard of living). Therefore imposing duties like quotas and tariffs on imported goods does not help the standard of living of poor countries with corrupt leaders. Task 4 What decides the standard of living for a nation is a combine measurement of various conditions like education, healthcare and purchasing power. It is different from other related measures like quality of life which relies on other factors like leisure opportunities and happiness. 1. Make a table similar to the one below and list each item above in the table. Standard of living items Measurable Non measurable Population Local culture Literacy rates Consumer sentiment Taxation Transportation GDP Education levels Balance of Payments Employment Electricity produced (Utilities) Legal System Poverty levels Access to technology Crime Rate Banking System Availability of Credit Political System Physical Environment Inflation Medical system Consumer expectations Family Possible presentation questions: 1. What is a Standard of Living? Standard of living can be defined as a measure of the total fiscal health of every citizen based on whether they can get basic needs like food, shelter and clothing. 2. Why does each country have a different standard of living? Every country have different GDP hence different standard of living. GDP of a country serve as an economic tool to determine the standard of living. 3. How do laws for business and the rule of law increase the standard of living? The rule of law simply means no one is above the law and everyone is equal under the law, therefore, there is no corruption and the country’s economic development is well distributed fairly between its citizens, hence better standard of living. 4. Are you familiar with the terms: Developed World Countries? These are countries with political stability, economic stability and a high standard of living. Third World? These are less economically developed nations and with no societal or technological infrastructure to support higher living standards for its citizens. Developing Countries? Generally, developing countries are poor but wealth and luxury can still be found in almost all developing countries. However, the little wealth and luxury they have concentrates more among a small portion of the population. Which category is the UAE placed in? Why? UAE is a Third world country even though it has improved a lot economically in the last few years. It is still a third world country because its economic still depend on the other advanced countries and its wealth has not been distributed fairly between its citizens. 1. What is a tariff? A tariff is a duty or tax imposed on imported goods by the government in order to regulate the flow of goods to that mentioned country. Every country has different regulations, but these tariffs can be categorized into five main types namely: revenue, prohibitive, ad valorem, protective, and specific. Revenue tariff is where the government makes money from businesses or companies that import goods by creating taxes on their goods into the country. An ad valorem tariff is a certain amount in percentage of the import’s value for example in every dollar value there is some cents being taxed. A specific tariff is where the tax does not deal with total value of the goods imported to the country but rather based on things like its volume or weight. A prohibitive tariff is meant to keep the goods from being imported and protective tariff is meant increase the price of goods imported to the country and that way, it will protect the local market from foreign market competition. 2. What is a quota? A quota is basically a target amount of goods and services sold in a specific given time. 3. What is a standard of living? Standard of living can be defined as a broad demographic measure that attempts to combine a variety of conditions like education, healthcare and purchasing power. It is different from other related measures like quality of life which relies on other factors like leisure opportunities and happiness. 4. What is the rule of law? The rule of law can be defined as the basis of the justice system of a country whereby no one is above the law and everyone is equal under the law. 5. Why is the rule of law so important to help an economy grow? The rule of law is very important for economic growth. Rule of law comprises of many different components in which security of persons and property rights are included. The rule of law can check on government and control of corruption. Corruption is so rampant especially in those developing nations where the rule of law is weak and those who are involved, especially the government officials at the top of leadership ladder may misuse the government funds and in the long run affect the economic growth. Some inferences about the effects of property rights protection in developing nations may not be warranted as it should be (Haggard et al., 2011). 6. Convince me that you agree/disagree with trade sanctions. Trade sanctions are usually a tool used in international relations for political purpose. There are many reasons why economic sanctions are impose on other nations. The nation that is subjected to trade sanctions is the one that feels the pinch because its economy will get hurt and the country that imposes the sanctions enjoy its success if it achieved its goals. Generally speaking, trade sanctions always leads to shocking impact on citizens in developing countries that rely on food aid and other important commodities like medicine from other nations. Therefore I disagree with trade sanctions because trade sanctions have resulted in more losses than gains (Mcgee, 2004). 7. What is free trade? Do you think it really works? Free trade is whereby goods and services, labor, and capital flow freely between countries without any barriers. 8. How is trade connected to Commercial Law? Commercial law is the law that governs wide areas of business, consumer transaction, and commerce. It deals with sale and distribution of goods, proper payment of transactions, tariffs, licensing and taxes. Commercial Law varies with jurisdiction. 9. Why do we study copyrights and trademarks in our class? So as to learn the importance of trade-marking and this will help us identify certain specific brands we want to purchase as customers. Also by learning copyrights laws, we will be able to understand and respect copyright laws and those will violate copyright law. 10. Choose the two items from the standard of living model that you consider to be the most important and convince me why these two are the most important to you. a) Political system The political system influences the standard of living of a country. The political system in socialist countries, like the Socialist Republic of Vietnam is one example a socialist single-party government where the standard of living is among the worst in the world because of the political system they have. The only ruling party sets up its own rules by force. But democratic socialist systems like those of the Scandinavian countries have a lot of political parties and often held democratic elections and provide a high standard of living for all its citizens. b) GDP Due to the fact that the GDP of a country serve as an economic tool to determine the standard of living, it is the most important factor to consider when assessing the standard of living of a country 11. Look at question 5 above under the Questions on the Standard of living. Which category do you think the UAE fits into? Why? According to Charliand (see web-page below), UAE is a Third world country even though it has achieve substantial growth in the last few years. It is still a third world country because its economic still depend on the other advanced countries like the UK, USA and Japan. Also, its economic development has not been distributed fairly between its citizens. 12. Does having a better business economy really help the people in that country have a better life? If you think yes, tell me how it helps. If you think no, tell me how it doesn’t really help. Yes. A country with better business economy usually has better GDP and this means its citizens are more likely to have a job and hence better quality of life because they are economically comfortable. 13. What does the WTO do? It manages and liberalizes international trade. The principle job of WTO is to assist producers of goods and services, exporters, and importers conduct their business fairly according to international trade rules. 14. What does the IMF do? IMF is responsible in promoting the maintenance of a healthy world economy. 15. Should the GCC form a union similar to the European Union? Why? Why not? Advantages? Disadvantages? Difficult because? Easy because? GCC should form a union like that of EU because this will increase the efficiency of trade within the region by eliminating trade barriers and there will be a good cooperation when it comes to monetary policies. Once they have form a Union, then the next thing is to form free trade agreements (FTAs) which will eliminate import tariffs, or taxes, between member states and this will encourage internal trade. Works cited Cadogan, Godfrey. “A Trade Policy Perspective on Import Quotas And The Substitution Effect.” Social Science Research Network (2010): n. pag. Print. Chaliand, Gerard. “THIRD WORLD.” Definitions and Descriptions: Retrieved on 24th November, 2012 from http://www.thirdworldtraveler.com/General/ThirdWorld_def.html. Print. Haggard, Stephan, and Lydia Tiede. “The Rule of Law and Economic Growth: Where are we?” World Development 39.5 (2011): 673-685. Print. Mcgee, Robert W. “Trade Sanctions as a Tool of International Relations.” Commentaries on Law Public Policy Vol 2 pp 53 127 2 (2004): 75. Print Motoshige Itoh. “Tariffs, Quotas, and Market.” Quarterly Journal of Economics 97.2 (1982): 295-305. Print. World Trade Organization. “General Agreement on Tariffs and Trade.” International Organization 17.04 (2009): 994. Print. Worldbank.org retrieved on 24th November, 2012 from http://www. worldbank.org. Print. Read More