How does international law affect business?

The purpose of international laws is to allow countries the greatest possible authority over their own international trade affairs, while maximizing the economic benefits of trade and labor relations with other nations. International laws govern political and economic transactions between nations. National statutes of the United States, as well as international treaties and conventions. While compliance may not guarantee profitability, it can alleviate some of the challenges of doing business abroad.

Most countries have aligned national labor laws with International Labor Organization (ILO) standards to ensure that employers provide humane and equal working conditions. Nations that have ratified the ILO treaty can use these global standards to decide cases where existing national legislation is insufficient. In addition to using existing international regulations, different countries apply their own labor laws that govern wages, hours of work, union membership, employment contracts and visa requirements. The World Trade Organization (WTO) is in charge of overseeing international trade and enforcing fair trade practices between countries.

If your company extends its reach to foreign markets, it must comply with several WTO laws. For example, the WTO Anti-Dumping Agreement allows governments to take action against companies that export products at a lower price than what is normally sold in the country of origin. Therefore, exporters should consider global world prices to avoid unfairly distorting the market when selling abroad. Companies involved in world trade are subject to international and regional customs requirements relating to quotas, tariffs and licensing obligations.

Doing business in foreign markets means becoming familiar with these regulations, especially if you are engaged in the export and import of goods. Dealing with international customs can affect your business, especially in markets with high tariffs, strict quality regulations, or export and import quotas. Companies that are considered to violate human rights or tolerate human rights abuses may find themselves without customers. Multilateral organizations, such as the United Nations, have established international human rights standards, such as the Universal Declaration of Human Rights.

These norms require that all constituents of society participate in the preservation of human rights. U.S. companies involved in international trade are responsible for alleviating human rights abuses, such as torture, crimes, genocide and forced labor, according to the United States. The WTO has a unique position in world affairs.

It is the global forum for trade negotiation. It coordinates the regulatory framework for global trade, serves as a clearinghouse for trade information, manages trade agreements and helps nations resolve trade disputes. Its website contains a wealth of information for the global business researcher. Companies involved in international trade must be attentive to legal problems unique to the international context.