LOGO

INTRODUCTION TO
INTERNATIONAL BUSINESS

Team name: INS302204 Sept2022

Team code: wujtqkg

Cao Xuân Phong

phongcaox@gmail.com
 International Business Law - INS3022

Introductory Notes
THE COURSE
1 15 weeks 8 topics
1 midterm 1 final individual task

TEXTBOOK
2 How to use?
8 chapters

CLASS REQUIREMENTS
Read materials before class
3
Full attendant and Active participation in
discussions

EVALUATION
Attentance 10%
4
Midterm 30%
Final 60%
 International Business Law - INS3022

How to use textbook

 Important parts of a chapter in this textbook.
 Introduction/Conclusion
 Chapter Summary and Key Terms

 Court cases
• These are decision of the court over the actual dispute between different
trade parties
• Structure: Name of case, Background and Facts, Opinion of the Court,
Decision of the Court; Case Questions
 Questions and Case Problems
• These are “case study” situations
 Ethical Consideration
• Topics for further thinking

Back
 International Business Law - INS3022

Content of Subject
 Chapter 1. Introduction to International Business
 Chapter 2. International Law and the World’s Legal Systems
 Chapter 3. Resolving International Commercial Disputes
 Chapter 4. The Formation and Performance of Contract for
the Sale of Goods
 Chapter 9. The WTO: Basic Legal Principles
 Chapter 10. Laws Governing Access to Foreign Markets
 Chapter 11. Regulating Import Competition and Unfair Trade
 Chapter 17. Protection and Licensing of Intellectual Property
CHAPTER 1.
INTRODUCTION TO INTERNATIONAL
BUSINESS
 International Business Law - INS3022

Start!
 Read case Tarbert Trading, Ltd v. Cometals, Inc case
 Try to understand all terms in the case
• You may ask questions
 Try to narrate case (facts, opinion, decision)
 Try to answer case questions
 15 minutes to go!
 International Business Law - INS3022

What is International Business

 It is commercial transactions between parties from different
countries.
 Individuals, companies, national and international
organizations
• Can Government be a party to international business transactions?
• Role that international organizations play in IB: WTO, regional
agreements
• IB in modern time: application of www, individuals can freely participate
in the IB
 Move of goods and services across borders
• Exception: special economic zones, export-processing zones
 At lest 2 legal systems involved
• There may be much more (conflict of law: when laws from different
countries offer different solution to the same situation)
• There should be common “rules of game” to create standardized code of
conducts
 International Business Law - INS3022

Forms of International Business

 Trade
 Buy and sell goods and services
• Goods are tangible things, not include real property
 Protection and licensing of intellectual property
 Buy and sell, lease, franchise intellectual property.
• Intellectual property include copyrights and industrial property
(trademarks, know-how, industrial design, patents and innovative
initiatives, etc.)
 Foreign direct investment
 Foreign investor controls assets and manage an ongoing
business
 International Business Law - INS3022

Why International Business

 Basic economic theory of international business.
 Comparative advantage doctrine
• Some countries may produce same product, but based on different
objective and subjective reasons, one country may produce such
product cheaper than other countries
 Benefits of international business.
 Flow of ideas, services and capital across the world
 More effective use of resources
• Natural resources
• Labor/employment
• Management
 Offer consumers new or more reasonable choices
 International Business Law - INS3022

Why not International Business

 Fitness to foreign market
 Consumption attitude
 Technical standards
 Legal requirements
• Registration
• Taxes, duties and other
 Competition
 Insufficient competition
 Exploitation of less-developed countries/economies
 Natural resources
 Cheap labor
 Profit
 Environment concerns
 International Business Law - INS3022

TRADE
 Definition: Trade = export and import goods and services
 Export
 Direct export
• Companies (big, experienced) perform all works relating to
export
• DE is conducted through: foreign sale representatives, foreign
distributors
 Indirect export
• Companies small or less-experienced should hire work of other
companies to conduct foreign sale
• IDE is conducted through services of:
– International Trading Companies: do not manufacture or produce,
only trade, on their own account
– Export Management Companies: provide export/import services to
manufacturer/producers
• Example issue of export: Certificate of Origin (CO)
– Tarbert Trading, Ltd. V. Cometals, Inc. (page 4)
 International Business Law - INS3022

INTELLECTUAL PROPERTY LICENSING

 Definition of IT:
 Legal rights which result from intellectual activity in the
industrial, scientific, literary and artistic fields
 International Organizations and IP: WIPO
• Develop IP policies
• Coordinate registration In some IP areas
• Conduct dispute settlement
• Common disputes involve: infringement, piracy and counterfeit
 International Business Law - INS3022

INTELLECTUAL PROPERTY LICENSING

 Common tools
 Licensing Agreements
• It is a contract, by which the IP holder grant certain rights
(license) to other party under specified conditions and for
specified time, in return for fee or loyalty, may be as part of larger
business arrangement
• Russian Entertainment Wholesale, Inc. v. Close-Up International,
Inc.
 Transfer of technology
 Franchising
• It is a business arrangement that uses an agreement to license,
control and protect the use of the franchisor’s patents,
trademarks, copyrights, or business know-how, combined with a
proven plan of business operation in return for royalties, fees or
commissions
• Dayan v. McDonald’s Corp
 International Business Law - INS3022

FOREIGN DIRECT INVESTMENT

 Definition
• Ownership and operation or effective control of the productive
assets of an ongoing business by an individual or corporate
investor who is a resident or national of another country
• There is also foreign indirect investment in form of purchasing of
stock for dividends
 Advantages and disadvantages of FDI
• Greatest opportunity for foreign investor for market penetration
• Exercise greatest control over business
• Overcome disadvantages of other forms of international business
• Become more competitive (especially in host market)
– Cheaper products, no duties and quotas, avoid currency fluctuations, better
services for customers, quicker adaptation to local taste
• Greatest risk
 Forms of FDI
• Foreign branch
• Joint venture
• Multinational corporation
 International Business Law - INS3022

CLASSIFICATION OF ECONOMIES
 Developed countries
• In the later stages of industrialization: advanced technology,
modern production and management methods, advanced
research facilities
• High income, high standard of living
 Developing countries
• Greater state control over economy: High tariffs and taxes; Import
licensing requirements; Financial regulations; Control on technology
transfer; Trade and investment barriers that protect local industries from
competition
 Newly industrialized countries
• Developing countries that made rapid progress toward becoming
industrialized economies
• Emerging market economies:
 Least-developed countries
• Low income, poor nutrition and health, high rate of illiteracy
• Unstable agriculture production, weak export
 International Business Law - INS3022

RISKS OF INTERNATIONAL BUSINESS

 Distance and logistics
• Seller: payment or credit risk; buyer: defective goods
• Common to all: shipping risk
 Language and cultural differences
• Always exists
 Cross-border trade control
• Export control
– Embargo
• Import control: tariff and non tariff barriers
– Quota
 Currency risk
• Exchange rate
• Currency control
 Political risks
• Lost of investor’s property (expropriation or confiscation)
• Exposure to foreign law/foreign courts
LOGO

Cao Xuan Phong