Answer 1: International Law is a set of rules made by a group of countries to ensure a formal pattern in trade and inter country relation. But there is no central controlling committee or headquarter to resolve any breach of regulations and procedures as in the case of domestic laws; it cannot be termed as law because worldwide countries adhere to international law to avoid getting cornered by the remaining nations. Associations like the United Nation Security Council and NAFTA often favour powerful nations; International Law is similar to Law in term of consent but the consent should be followed by abidance which is generally not the case. With globalization one countries problem does affect the other and it is the reason behind international law being enforced.
Answer 2: Globalization has benefitted the low income families and the middle income class because of the benefits of import competition. It has created more job opportunities and raised the living standard of people. In the book Mad About Trade by Grizwold has mentioned that an economy like USA should get ready to open doors of the economy to the benefits of Globalisation. USA has gained customers worldwide due to globalisation. Apprehensions of the domestic market to foreign goods have been addressed in the book; in the long run it is always better to produce those commodities that the economy specialises in. Cheaper goods and creation of jobs are the advantages of Globalisation. Developing economies like India and China have progressed considerably due to increasing trade; it has helped in reducing poverty and unemployment. The global economy has prospered but there is another side to the story with a change in domestic government the current trade policy might be changed. It has introduced systematic risk; a risk which transfers from one interdependent economy to other. Shared infrastructure like transport and internet pose a threat along with increasing scarce supply of natural resources. Risk management should be a focus point with the multinationals to protect its employees and people against the systematic risk.
Answer 3: The WTO was established with a mission to foster international trade by reducing trade barriers. The aim was to promote healthy trade competition among member countries. One of the most important roles of the WTO is trade dispute settlement; the WTO round at Doha in 1994 was very successful. The member nations of WTO accord each other as Most Favoured Nation (MFN) and agree to give equal trade advantages to each other with an exception giving special consideration to developing countries. The drawbacks of international organisations like ILO in fighting child labour have attached more importance to WTO as it has a powerful dispute mechanism. In 1995 ever since Australia’s membership in the WTO; Australia has successfully helped its farmers fight the case of meat import restrictions by USA and Korea. The ninth Mistrial Conference held in Bali in December 2013 allowed developing countries more food security. The success of WTO has also posed certain threats due to MFN; WTO followed a policy of non discrimination for ensuring trade liberalisation. The developing countries have levied charges of WTO being very welcoming to large corporations. Guatemala followed WTO’s guidelines to reduce infant mortality; the affected milk powder companies somehow managed to reverse the decision and continued earning profits.
Answer 4: Set in 1977 the FCPA act addresses two issues accounting transparency and bribery of foreign officials. The FCPA applies to residents of USA and people trading there. The provisions of FCPA can be dived into Accounting and anti Bribery. Accounting provisions refer to the entire activities of a firm; from book keeping, tax payment to even bribery issues. A record of all trnasctions wether big or small needs to be accounted for. In case of the Anti Bribery Provision any act that influences the decision of a government employee, a party or a firm to mould or alter government regulations is regarded as bribery. Both enterprises and individuals come under this act. In case of violation the FCPA can levy civil and criminal penalties like a fine of $ 2 million on corporations based on bribery charges and also the possibility of being put behind bars. For individuals the amount is $ 100,000 and an imprisonment of about 5 years. Smith & Wesson Holding Corporation paid SEC around $ 2 million because of violation of FCPA rules as it paid bribes in Pakistan and other countries to sell its guns. German Electronics Giant Siemens has also pleaded guilty in FCPA violation; agreed to pay $ 800 to settle charges. Bribe payments of $ 1.4 billion were made at employee levels. Siemens was also charged with book, record and internal control violations in Iraq. But still Siemens was not forced out of the US government contracts. The companies did suffer a lot of damage in their brand image. But the cases clarified the message of treating all violators with strictness.
