International laws govern political and economic transactions between nations. U.S.-based companies conducting business beyond national borders are subject to a multitude of host-country laws and U.S. domestic statutes 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 those global standards to decide cases where prevailing national law is insufficient. In addition to using the prevailing international regulations, different countries apply their own labor laws governing wages, working hours, union membership, employment contracts and visa requirements.
The World Trade Organization (WTO) is in charge of overseeing international trade and enforcing fair trade practices among countries. If your company extends its reach into foreign markets, you must comply with various WTO laws. For example, the WTO Anti-Dumping Agreement allows governments to take action against companies that export products at a lower price than that at which they are usually sold in the country of origin. Exporters should therefore consider overall world prices to avoid distorting the market unfairly when selling abroad.
Companies engaging in global trade are subject to both international and regional customs requirements concerning quotas, tariffs and licensing obligations. Doing business in foreign markets means becoming familiar with these regulations, especially if you are involved in exporting and importing goods. Dealing with international customs can impact your business, particularly in markets with high tariffs, strict quality regulations or export-import quotas.
Companies viewed as violating human rights or condoning human rights abuses may find themselves without customers. Multilateral organizations such as the United Nations have set forth international human rights standards such as the Universal Declaration of Human Rights. These standards require all constituents of society to participate in the preservation of human rights. American firms involved in international trade are responsible for alleviating human rights abuses such as torture, crimes, genocide and forced labor according to the U.S. Alien Tort Claims Act.
The internationalization of trade and new technological innovations make it necessary for businesses with a global presence to protect their inventions and processes. The World Intellectual Property Organization administers various treaties that uphold intellectual property rights among countries. For example, some global treaties guarantee automatic copyright protection for WTO members. These agreements also offer strong dispute settlement mechanisms. You may protect intellectual property by filing for a patent, trademark or copyright, according to the foreign country’s intellectual property laws.
- International Labor Organization: How International Labour Standards are Used
- Denver Business Journal: Be Mindful of Foreign Laws Governing Overseas Employees
- World Trade Organization: Understanding the WTO: Principles of the trading system
- United Nations Human Rights: International Human Rights Law
- Entrepreneur: How to Start an Import/Export Business; June 28, 2001
Jeffrey Carey is a journalist with more than 15 years of diverse writing experience. He graduated with Bachelor of Business Administration (Hons) in 2002 from the University of Southern California (USC), and later obtained a Masters in Business Administration in 2009 from the same institution.