International law means the law of nations, which includes a set of rules, norms, regulations, standards generally accepted in relations between nations. Nowadays business became truly international. There is evidence that international trade existed as long back as 2000 B.C. Today complexities and volumes in international trade are continuously increasing so there is an urgent need for a uniform code for regulating these transactions. The international law aims to provide regulations required for the execution of international transactions involving more than one nation. Every country has its own set of laws for regulating its respective business. Therefore the international business has to comply with the provisions of domestic as well as international law.
Meaning and Scope of International Business
International Business is an economic activity of buying and selling goods and services from one country to another country. These activities may be of public and private enterprises. The international business focuses on business at the global level and the objective of the enterprises is to expand its business globally like trading goods and services or investments. The result of increasing international trade is globalization in the world.
The scope of International business is very dynamic that involves international marketing, international investments, International Development Association (IDA), World Bank, procuring international finance from International Monetary Fund (IMF), management of foreign exchange, international strategic management, International Finance Corporation (IFC), management of international production and logistics, international human resources and management of cultural diversity, etc.
Difference between International Business and Domestic Law
| Domestic business activities are conducted within the country. | International business activities are conducted among several countries in the world. |
| Domestic businesses’ deals in a single currency. | International businesses’ deals in multiple currencies. |
| The capital investments are low in domestic businesses. | There is a high capital investment in international business activities. |
| The customers are homogeneous i.e. within the country. | The customers are heterogeneous i.e. both within the domestic country and other countries. |
| Business research can be conducted easily. | Business research becomes difficult for running a business globally. |
Different Legal Disciplines in International Law
International Trade Bodies and Policies
- World Trade Organization (WTO): The World Trade Organization was established in 1995. This international was established to regulate the trade between countries. The purposes of the organization are governed by the agreement establishing the World Trade Organization which is known as the ‘Marrakesh Agreement’. It does not specify the actual rules to go on the international trade in specific areas but it helps to found separate treaties that then govern their respective trade. World Trade Organization provides a framework for administration and implementation of the agreement and also provides a forum for further negotiations. It also has the trade policy review mechanism and it helps to promote greater coherence among the members’ countries.
- General Agreement on Trade and Tariffs (GATT): GATT is a legal agreement between many countries that wants to promote international trade by reducing or eliminating trade barriers such as quotas and tariffs. So its mean aim is to promote multilateral clear trade and reduce the trade barriers. This agreement is considered the backbone of international trade and law. It also provides for the promotion of fair trade practices by prohibiting dumping and unfair subsidies, bounties, and grants.
International Trade Principles
- Most Favored Nation (MFN): MFN principle ensures that whenever a WTO member lowers downs its trade barriers then it has to do so or the like goods and services from all the number countries of WTO, without taking into consideration the economic size or level of development of the countries. Also, only the WTO members would benefit from the most favorable treatment.
- National Treatment Principle: According to these imported goods as well as domestic goods should be treated equally. It is equally applicable to foreign and domestic services, trademarks, copyrights, and patents.
- Cross Border Transactions: The cross-border transactions are those that take place among several jurisdictions or countries and they are subjected to taxation by more than one country. International taxation planning ensures that cross border transactions and businesses Steve X compliant and avoid or lessen double taxation.
- Trade and Intellectual Property: Intellectual property rights and trade aspects related to it required signatory nations to raise intellectual property rights. Which are also called intellectual monopoly privileges. This means that no never company or organization can use to possess the rights of the other big charges to launder intellectual property rights.
- Disappeared Settlement: The WTO dispute settlement system works in the areas of dispute between different countries in case of international trade. This body has been working since 1995. The WTO dispute settlement body has exclusive and compulsory distinction weather disappears on World Trade Organization law.
