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Essay, 35 pages (9000 words)

Major ocean ports of the world

Vancouver Seattle Tacoma Halifax Boston Philadelphia Oakland Los Angeles Long Beach Baton Wilmington Rouge Mobile Beaumont Houston Corpus Christi Veracruz Kingston South Louisiana New York/New Jersey Baltimore Port of Virginia Charleston Savannah Jacksonville Port Everglades Miami San Juan Cristobal Major Ocean Ports of the World (Maps not to scale) Buenos Aires Santos North, Central, and South America Gothenburg Port Said Alexandria Jeddah Dubai Bremen Liverpool Gdansk Salalah Abidjan

Hamburg Felixstowe Rotterdam Southampton Le Antwerp Havre Marseilles Barcelona Algeciras Valencia Gioia Tauro Durban Europe Africa and the Middle East Dalian Inchon Chiba Tokyo Busan Qingdao Yokohama Nagoya Ulsan Shanghai Osaka Ningbo Kobe Tianjin Karachi Mumbai Kolkata Vizagapatnam Bangkok Kochi Colombo Klang Xiamen Guangzhou Keelung Taichung Kaohslung Shenzhen Hong Manilla Kong Laem Chabang Singapore Tanjung Priok Melbourne Port Botany/ Sydney Harbour Auckland Asia, Australia and the South Paci c region S EVENTH E DITION

I NTERNATIONAL B USINESS L AW AND ITS E NVIRONMENT R ICHARD S CHAFFER Professor Emeritus (Ret. ) Walker College of Business Appalachian State University F ILIBERTO A GUSTI Senior Partner Steptoe & Johnson LLP Attorneys at Law Washington, DC B EVERLEY E ARLE Professor Bentley College McCallum Graduate School of Business Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States International Business Law and its Environment, 7e Richard Schaffer, Filiberto Agusti, and Beverly Earle VP/Editorial Director: Jack W.

Calhoun VP/Editor-in-Chief: Rob Dewey Acquisitions Editor: Vicky True Developmental Editor: Kendra Brown Marketing Manager: Jennifer Garamy Content Project Manager: Corey Geissler Production Technology Analyst: Emily Gross Technology Project Manager: Kristen Meere Website Project Manager: Brian Courter Sr. First Print Buyer: Kevin Kluck Production and Composition: Pre-Press PMG Senior Art Director: Michelle Kunkler Internal Designer: Jennifer Lambert/Jen2Design Cover Designer: Joseph Pagliaro Graphic Design Cover Image: © Harald Sund/ Photographer’s Choice © 2009, 2005 South-Western, a part of Cengage Learning

ALL RIGHTS RESERVED. No part of this work covered by the copyright hereon may be reproduced or used in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, information storage and retrieval systems, or in any other manner—except as may be permitted by the license terms herein. For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706 For permission to use material from this text or product, submit all requests online at www. engage. com/permissions Further permissions questions can be emailed to [email protected] com Library of Congress Control Number: 2007942354x ISBN-13: 978-0-324-64967-3 ISBN-10: 0-324-64967-3 South-Western Cengage Learning 5191 Natorp Boulevard Mason, OH 45040 USA Cengage Learning products are represented in Canada by Nelson Education, Ltd. For your course and learning solutions, visit academic. cengage. com Purchase any of our products at your local college store or at our preferred online store www. ichapters. com

Printed in the United States of America 1 2 3 4 5 6 7 12 11 10 09 08 R. S. To Avery. And to John Phillip Reid, Russell D. Niles Professor of Law Emeritus at New York University, dear friend and mentor, whose lectures on the common law and English legal history have in? uenced my teaching and writing to this day. F. A. To my father, Filiberto, and my mother, Maria Luisa, who sacri? ced so much that I might be free to write and read as I wish; and to my wife, Susan, and our daughters, Caroline, Olivia, and Jordan, for their patience.

B. E. To my husband, John, for his support and to our daughter, Molly, for inspiring me with her dedication and hard work. ABOUT THE AUTHORS RICHARD SCHAFFER is Professor Emeritus of Business Law (retired) in the Department of Finance of the Walker College of Business at Appalachian State University. He taught for twenty-? ve years in the area of business law, international business transactions, and the law of international trade and investment. Professor Schaffer received his J. D. rom the University of Mississippi and his LL. M. from New York University. From 1976 through 1982, he assisted United Nations agencies in New York, San Jose, and Vienna with projects related to multinational corporations, corrupt practices, and socioeconomic development, and served as rapporteur of international working groups on international economic crime. He also has served as a consultant to business schools, providing advice on the internationalization of the curriculum, and to industry trade groups.

He is a graduate of Harvard Law School, where he was a senior editor of the Harvard Law Review. He graduated summa cum laude with a B. A. from the University of Illinois in 1974. BEVERLEY EARLE is a professor in the Law, Taxation, and Financial Planning Department and the McCallum Graduate School of Business at Bentley College, Waltham, Massachusetts, where she has been on the faculty since 1983. She teaches international business law at the undergraduate and graduate levels as well as courses on the legal environment of business and law and society.

She graduated with a B. A. from the University of Pennsylvania, received a J. D. from Boston University, and is admitted to the practice of law in Massachusetts. Professor Earle has received numerous awards including the Academy of Legal Studies in Business Holmes-Cardozo award (2006), the ALSB Distinguished Proceedings paper (2007), Charles Hewitt Master Teacher Finalist (2006), and the ALSB/Indiana University Center for International Business Education and Research Case Competition (1999).

She has been honored as Bentley Scholar of the Year (2001), and has received the Bentley Innovation in Teaching Award and the Bentley Outstanding Scholarly Contribution Award (2007). Professor Earle has presented papers at numerous conferences including the Cornell Law School Symposium, and her articles have appeared in law reviews including those published at Cornell University, Northwestern University, and the University of California at Berkeley.

She taught at Yunnan University in Kunming, China in 1990 and in Strasbourg, France in 1992. She lived in Paris on sabbatical in 1993–1994 and traveled to India on her 2007 sabbatical. She is past president of the International Section of the Academy of Legal Studies in Business. Since 2006, she has been an appointee to the Massachusetts Board of Bar Overseers Hearing Committee on Attorney Discipline. iv CONTENTS IN BRIEF PREFACE PART ONE xxvi The Legal Environment of International Business 2 3 Introduction to International Business 4 International Law and the World’s Legal Systems 47 Resolving International Commercial Disputes 85 2 PART TWO International Sales, Credits, and the Commercial Transaction 4 5 6 7 Sales Contracts and Excuses for Nonperformance 116 The Documentary Sale and Terms of Trade 161 The Carriage of Goods and the Liability of Air and Sea Carriers 191 Bank Collections, Trade Finance, and Letters of Credit 227 114 PART THREE International and U. S.

Trade Law 8 9 10 11 12 13 14 15 258 National Lawmaking Powers and the Regulation of U. S. Trade 260 GATT Law and the World Trade Organization: Basic Principles 288 Laws Governing Access to Foreign Markets 321 Regulating Import Competition and Unfair Trade 356 Imports, Customs, and Tariff Law 384 The Regulation of Exports 431 North American Free Trade Law 463 The European Union and Other Regional Trade Areas 499 PART FOUR Regulation of the International Marketplace 16 17 18 19 20 21 22 530

International Marketing Law: Sales Representatives, Advertising, and Ethical Issues 532 Licensing Agreements and the Protection of Intellectual Property Rights 558 Host-Country Regulation: Corporate Law, Taxation, and Currency Risk 584 Nationalization, Expropriation, and Privatization 606 Labor and Employment Discrimination Law 637 Environmental Law 662 Regulating the Competitive Environment 690 APPENDICES All appendices can be found on the companion website, located at academic. cengage. om/blaw/schaffer A B C D E F United Nations Convention on Contracts for the International Sale of Goods A-1 (in text and online) The General Agreement on Tariffs and Trade B-1 (online only) Multilateral Agreements on Trade in Goods (Selected Provisions) C-1 (online only) General Agreement on Trade in Services (Selected Provisions) D-1 (online only) Agreement on Trade-Related Aspects of Intellectual Property Rights E-1 (online only) North American Free Trade Agreement F-1 (online only)

INDEX I-1 v CONTENTS TABLE OF CASES xvii TABLE OF TREATIES xxii TABLE OF STATUTES xxiv PREFACE xxvi Countries in Transition: Eastern Europe, Russia, and the Newly Independent Republics of the Former Soviet Union 31 The Transition from Communism to Free Markets and Private Enterprise 31 PART ONE THE LEGAL ENVIRONMENT OF INTERNATIONAL BUSINESS 2 Managing the Risks of International Business 32 CHAPTER ONE

INTRODUCTION TO INTERNATIONAL BUSINESS Economic Interdependence 4 4 America in International Markets 5 Forms of International Business Trade 6 Exporting 9 Importing and Global Sourcing 12 Government Controls over Trade: Tariffs and Non-tariff Barriers 12 Intellectual Property Rights and International Licensing Agreements 14 Foreign Direct Investment 19 Multinational Corporations 19 United States Foreign Direct Investment 21 6

Risk Assessment and the Firm’s Foreign Market Entry Strategy 32 Transaction Risks in Contracts for the Sale of Goods 33 Managing Currency and Exchange Rate Risks 35 Managing Distance and Communications 36 Language and Cultural Differences 37 Managing Political Risk 38 Risks of Exposure to Foreign Laws and Courts 40 Receiving Professional Assistance in Going International 42 CHAPTER TWO INTERNATIONAL LAW AND THE WORLD’S LEGAL SYSTEMS 47 International Law 47 Conducting Business in Developing and Newly Industrialized Countries 22

The Developing Countries 22 The Economic Environment in Developing Countries 23 Controls on Investment in Developing Countries 25 The Road to Free Markets, ConsumerBased Economics, and Private Ownership 28 The Newly Industrialized Countries 30 The Least-Developed Countries 30 De? ning International Law 47 Public and Private International Law 48 Sources of International Law 48 Customary International Law 49 The Law of Treaties 50 International Human Rights and Humanitarian Law 56 International Criminal Law 57 Basic Principles of International Criminal Jurisdiction 58 Mutual Legal Assistance and Extradition 65 i Contents vii Some General Concepts of Public International Law 65 Comity 66 Sovereign Immunity Act of State 67 66 Forum Non Conveniens Forum Selection Clauses 99 102 Con? ict of Laws International Organizations The Role of the United Nations in International Law 67 International Court of Justice 68 UN Agencies Affecting International Business Law 69 67 The Restatement (Second) of the Con? ict of Laws 104 Choice of Law Clauses 105 The Application of Foreign Law in American Courts 105 Judicial Assistance: Discovery and the Collection of Evidence 105 Antisuit Injunctions 108 102

Ethics, Social Responsibility, and Corporate Codes of Conduct 71 Corporate Social Responsibility in Developing Countries: A Tale of Two Worlds 71 Codes of Conduct 72 Corporate Codes of Conduct 73 Enforcement of Foreign Judgments Commercial Disputes with Nations 108 111 Comparative Law: Differences in National Laws and Legal Systems 74 PART TWO INTERNATIONAL SALES, CREDITS, AND THE COMMERCIAL TRANSACTION 114 Modern Legal Systems of the World 75 Origins of Civil Law Systems 75 Origins of Common Law Systems 76 Differences between Modern Civil Law and Common Law Countries 77 Islamic Law 77

CHAPTER FOUR SALES CONTRACTS AND EXCUSES FOR NONPERFORMANCE 116 Introduction to Contracts for the International Sale of Goods 116 The Law of Sales 116 The Law Merchant and English Sales Law 118 The American Uniform Commercial Code 119 Contract Law in China 119 CHAPTER THREE RESOLVING INTERNATIONAL COMMERCIAL DISPUTES 85 Avoiding Business Disputes Cultural Attitudes toward Disputes Methods of Resolution 86 85 85 Alternate Dispute Resolution Mediation 86 Arbitration 87 86 The Convention on Contracts for the International Sale of Goods 120

Applicability of the CISG to International Sales 121 Litigation Jurisdiction Venue 99 90 91 Validity and Formation of International Sales Contracts 124 Enforcement of Illegal Contracts 124 viii Contents The Writing Requirement 124 Problems of Contract Interpretation 127 Mutual Assent: The Offer 129 Mutual Assent: The Acceptance 132 Standard Business Forms and Contract Modi? cations 135 Certi? cates of Inspection or Analysis 169 Measuring Damages for Breach of the Documentary Sale 173 Types of Ocean Bills of Lading 173 Other Types of Transport Documents 174 Electronic Data Interchange 175

Performance of Contracts Performance of Seller 140 140 Allocating Shipping Responsibilities and the Risk of Loss 175 144 Freight and Transportation Charges 176 Allocating the Risk of Loss 176 The Risk of Loss in International Sales under the CISG 177 Trade Terms 178 International Rules for the Interpretation of Trade Terms 178 Modi? cation of Trade Terms 185 Remedies for Breach of Contract Fundamental Breach 144 Seller’s Right to Remedy 145 Price Reduction 146 Money Damages 147 Speci? c Performance 150 Anticipatory Breach 150

Events Beyond the Control of the Parties: Excuses for Nonperformance 151 Impossibility of Performance 151 Frustration of Purpose 152 Commercial Impracticability 152 The CISG Exemptions for Impediments Beyond Control 153 Force Majeure Clauses 154 CHAPTER SIX THE CARRIAGE OF GOODS AND THE LIABILITY OF AIR AND SEA CARRIERS 191 The Liability of International Air Carriers 191 Cultural In? uences on Contract Negotiations 155 Negotiating Contracts in Japan 155 CHAPTER FIVE THE DOCUMENTARY SALE AND TERMS OF TRADE 161 Transaction Risk 162 163

The Warsaw Convention of 1929 191 The Montreal Convention of 1999 192 Air Carrier’s Liability for Death or Bodily Injury 194 The Death on the High Seas Act 199 Liability for Air Cargo and Baggage Losses 201 Liability for the Carriage of Goods by Sea 201 The Documentary Sale The Document of Title 163 The Bill of Lading 164 Rights of Purchasers of Documents of Title 164 History of Carrier Liability 202 Nautical Liability of the Carrier 203 Shipper’s Liability for Hazardous Cargo 207 Carrier’s Liability for Cargo Shortages 208 The Per-Package Limitation 210 Liability for a Material Deviation 213 The Hamburg Rules 214 The Visby Amendments 214

Contents ix The Liability of Ocean Transportation Intermediaries 215 Freight Forwarders 215 Non-Vessel Operating Common Carriers 216 The Ocean Shipping Reform Act of 1998 217 Other Specialized Uses for Letters of Credit 251 Electronic Data Interchange and the eUCP 251 Letters of Credit in Trade Finance Programs 252 Marine Cargo Insurance Marine Insurance Policies and Certi? cates 217 General Average and FPA Losses Particular Average Losses 219 Types of Coverage 219 217 PART THREE INTERNATIONAL AND U. S. TRADE LAW 258 218 CHAPTER EIGHT NATIONAL LAWMAKING POWERS AND THE REGULATION OF U.

S. TRADE 260 CHAPTER SEVEN BANK COLLECTIONS, TRADE FINANCE, AND LETTERS OF CREDIT 227 The Bill of Exchange 227 The Separation of Powers The Executive–Legislative Debate 261 Legislative Power 261 Presidential or Executive Power 262 260 The Origin of Bills of Exchange 228 Brief Requirements of a Bill of Exchange 228 The Documentary Draft and the Bank Collection Process 229 Documentary Drafts Used in Trade Finance 229 Credit Risks in Factoring Accounts Receivable: The Rights of the Assignee 232 The Treaty Power The Domestic Law Effect of U. S. Treaties 267 266 Executive Agreements

Sole Executive Agreements and the President’s Inherent Power 270 Congressional–Executive Agreements and the President’s Delegated Power 271 269 The Letter of Credit The Documentary Letter of Credit 233 Law Applicable to Letters of Credit 235 The Independence Principle of Letters of Credit 235 Following a Letter of Credit Transaction 237 The Rule of Strict Compliance 242 Enjoining Banks from Purchasing Documents in Cases of Fraud 245 Con? rmed Letters of Credit 248 Standby Letters of Credit 248 232 U. S. Trade and Tariff Legislation The Smoot-Hawley Tariff Act of 1930 272 The Reciprocal Trade Agreements Act of 1934 272 More Recent U. S.

Trade Legislation 274 272 Trade Agreements The General Agreement on Tariffs and Trade 275 Trade Promotion Authority 275 274 x Contents Federal–State Relations The Supremacy Clause 276 Burma, Human Rights, and Federal Preemption 276 The Import–Export Clause 277 The Commerce Clause 278 276 GATT 1994: Major Principles of Trade Law 302 Multilateral Trade Negotiations 303 Tarif? cation 304 Tariff Concessions, Bound Rates, and Tariff Schedules 304 Federal Agencies Affecting Trade United States Department of Commerce 281 United States Department of Homeland Security 281 United States Trade Representative 282 International Trade Commission 282 The U.

S. Court of International Trade 282 281 Nondiscrimination, Most Favored Nation Trade, and National Treatment 305 Most Favored Nation Trade 306 NTR Status and Jackson-Vanik: A Remnant of the Cold War 307 National Treatment 310 310 GATT and the Elimination of Quotas CHAPTER NINE GATT LAW AND THE WORLD TRADE ORGANIZATION: BASIC PRINCIPLES 288 Introduction to Trade Regulation Reasons for Regulating Imports 289 Tariffs 290 Non-tariff Barriers to Trade 290 Indirect Non-tariff Barriers 292 Transparency 293 Impact of Trade Barriers on Managerial Decisions 294

Quantitative Restrictions: The Balanceof-Payments Exception and Developing Countries 313 br /> CHAPTER TEN LAWS GOVERNING ACCESS TO FOREIGN MARKETS 321 The General Principle of Least Restrictive Trade 321 Technical Barriers to Trade The Protection of Public Health, Safety, or Welfare 324 European Union Standards and Technical Regulations 326 Japanese Standards and Technical Regulations 326 Chinese Standards and Technical Regulations 328 The WTO Agreement on Technical Barriers to Trade 329 International Organization for Standardization 330 289 324 The General Agreement on Tariffs and Trade 294

The GATT Framework 295 GATT and U. S. Law 296 Scope and Coverage of GATT 1947 Scope and Coverage of GATT 1994 296 297 The World Trade Organization Organization of the WTO 297 297 GATT/WTO Dispute–Settlement Procedures WTO Dispute-Settlement Procedures 299 WTO Reports as Legal Precedent 302 299 Import Licensing Procedures The WTO Agreement on Import Licensing Procedures 334 Trade Facilitation 334 334 Contents xi Government Procurement The WTO Agreement on Government Procurement 335 Administering Government Procurement Rules in the United States 336 335 Trade in Services The WTO General Agreement on Trade in Services 337 337

The WTO 1994 Agreement on Safeguards 357 Safeguards against Injury under U. S. Law 358 Trade Adjustment Assistance 364 The U. S. Steel Industry: A Case Study in Managed Trade 364 Unfair Import Laws: Dumping and Antidumping Duties 366 Trade in Agriculture The WTO Agreement on Agriculture 340 Sanitary and Phytosanitary Measures: Food, Animal, and Plant Safety 341 339 Trade in Textiles and Clothing History of Textile Import Regulation and Deregulation 344 344 The Economics of Dumping 366 The WTO Antidumping Agreement 367 WTO Dispute Settlement in Dumping Cases 371 Dumping and Non-market Economy Countries in Transition 371

Unfair Import Laws: Subsidies and Countervailing Duties 374 Other WTO Trade Agreements Trade-Related Investment Measures 345 Trade-Related Aspects of Intellectual Property Rights 345 Information Technology Agreement 346 345 Trade Sanctions and U. S. Section 301: The Threat of Retaliation 346 Basic Section 301 347 The Trade and Development Act of 2000: The Carousel Law 349 Special 301 349 Telecommunications 301 349 Super 301 349 WTO Agreement on Subsidies and Countervailing Measures 374 De? nition of a Subsidy 374 Prohibited Subsidies 375 Domestic Subsidies 375 Nonactionable or Socially Bene? ial Subsidies 376 Subsidies and State-Owned Enterprises 376 The Controversy over the Continued Dumping and Subsidy Offset Act of 2000 379 Material Injury in Unfair Import Cases 379 CHAPTER ELEVEN REGULATING IMPORT COMPETITION AND UNFAIR TRADE 356 The Double-Edged Sword of Import Regulation 356 Safeguards Against Injury 357 Judicial Review in International Trade Cases 379 CHAPTER TWELVE IMPORTS, CUSTOMS, AND TARIFF LAW The Administration of Customs and Tariff Laws 384 The Formal Entry Process 385 Liquidation and Protest 389 384 The GATT Escape Clause 357 xii Contents Enforcement and Penalties Binding Rulings 395 Judicial Review 395 89 Dutiable Status of Goods The Harmonized Tariff Schedule 398 Using the General Rules of Interpretation 404 Customs Valuation 408 Country-of-Origin Rules 410 WTO Agreement on Rules of Origin 414 Special Rules of Origin for Textiles and Apparel 416 Marking and Labeling of Imports 418 Federal Trade Commission “ Made in U. S. A. ” Rules 419 398 The Effectiveness of Trade Sanctions 435 The Impact of Export Controls on Business and Trade 435 Trade Controls for Reasons of Short Supply 437 Trade Controls for the Protection of Wildlife, the Environment, Public Safety, or of Antiquities 437

History of U. S. Export Control Laws The Cold War “ Cat and Mouse” Game: Spying and Industrial Espionage 438 Some Recent Enforcement Actions 440 Multilateral Cooperation in Controlling Technology 440 438 U. S. Trade Preferences for Developing Countries 419 Export Controls on Commercial and Dual-Use Goods and Technologies 441 Export Administration Act of 1979 and Regulations 441 The Export Licensing Process 443 Deemed Exports 446 Extraterritorial Jurisdiction of Export Control Laws 447 Antiboycott Provisions 448 Compliance and Enforcement 449

The Generalized System of Preferences 420 Caribbean Basin Economic Recovery Act 421 Other Customs Laws Affecting U. S. Imports 423 Drawbacks 423 Returns of U. S. Exports 424 Foreign Trade Zones 424 The President’s Emergency Powers During Peace and War 452 Trading with the Enemy Act 452 National Emergencies Act 452 International Emergency Economic Powers Act 452 USA PATRIOT Act 453 Court Challenges to IEEPA 454 U. S. Sanctions on Trade with Cuba 457 CHAPTER THIRTEEN THE REGULATION OF EXPORTS 431 Trade Controls over Arms, Munitions, and Defense Systems 432 The Neutrality Acts 432 CHAPTER FOURTEEN

NORTH AMERICAN FREE TRADE LAW The North American Free Trade Area Canada–U. S. Trade 465 Mexican–U. S. Trade 465 The North American Free Trade Agreement 466 463 464 National Security and Foreign Policy Issues 433 Trade Controls for Reasons of National Security 434 Trade Controls for Reasons of Foreign Policy 434 Contents xiii NAFTA Trade and Tariff Provisions National Treatment 466 466 The Free Trade Area of the Americas Other Western Hemisphere Free Trade Agreements 493 493 Rules of Origin Goods Wholly Produced or Obtained in North America 468 Annex 401 Tariff Shift Rule of Origin 468 The NAFTA Certi? ate of Origin 471 Standards and Technical Barriers to Trade 471 Marking and Labeling Rules 473 468 CHAPTER FIFTEEN THE EUROPEAN UNION AND OTHER REGIONAL TRADE AREAS 499 The Philosophy of Economic Integration 499 Trade in Goods: Sectoral Issues Trade in Motor Vehicles and Parts 474 Trade in Textiles and Apparel 474 Trade in Agriculture 475 Government Procurement 475 Emergency Action to Protect Domestic Industry (NAFTA Safeguards) 475 474 Federal Model 499 Free Trade Area 500 Customs Union 500 Common Market 501 Compatibility of Trade Areas with the WTO and GATT 504 European Union Trade in Services

Financial Services 476 Transportation 476 Telecommunications 479 476 History 504 Structure of the European Union 507 Harmonization: Directives and Regulations 512 The Business Implications of the European Union 518 504 Cross-Border Investment NAFTA’s Investment Provisions 480 480 Other Regional Trade Areas Other NAFTA Provisions Intellectual Property Rights 483 Environmental Cooperation and Enforcement 484 Labor Cooperation and Worker Rights 485 Antitrust and Competition Policy 485 Rights to Temporary Entry 485 483 Administration and Dispute Settlement NAFTA Fair Trade Commission 486 486

MERCOSUR 519 The DR–Central American Free Trade Area 520 Andean Community of Nations 520 Central American Common Market 521 African Trade Areas 521 Asia-Paci? c Economic Cooperation Group 522 CARICOM: Caribbean Community 522 ASEAN 525 Commonwealth of Independent States Free Trade Area 525 Gulf Cooperation Council 525 Greater Arab Free Trade Area 525 519 Production Sharing: Assembly Plants and the Mexican Maquiladoras 489 Assembly Plant Tariff Rules 490 Issues Related to the Mexican Maquila Industry 492 PART FOUR REGULATION OF THE INTERNATIONAL MARKETPLACE 530 xiv Contents CHAPTER SIXTEEN

INTERNATIONAL MARKETING LAW: SALES REPRESENTATIVES, ADVERTISING, AND ETHICAL ISSUES 532 Regulation of Relationships with Representatives 532 Right to Use and Conditions of Use 559 Competitive Circumstances 559 Con? dentiality and Improvements 560 International Protection for Patents, Trademarks, and Other Intellectual Property 560 Paris Convention 561 Patents 561 Trademarks 562 Domain Names 562 Copyrights 564 TRIPS 565 Supersession of Agreement with Representative 533 Tax and Labor Regulation and Principal Liability: The Dependent—Independent Distinction 535 The Doha Declaration on TRIPS and Public Health 566

Regulation of Advertising Abroad Truth in Advertising 537 Content-Speci? c Regulations 539 Marketing Considerations: The Nestle Infant Formula Case 540 536 The War of “ Geographical Indications” 567 Geographical Indications under the Doha Development Agenda 570 Continuing TRIPS Turmoil on Biodiversity 570 The Foreign Corrupt Practices Act Origins of the FCPA and Other Antibribery Laws 541 Structure of the FCPA 542 The Department of Justice Review Process 544 FCPA Enforcement Actions 546 Foreign Enforcement Actions 546 International Refusal to Enforce Contracts Induced by Bribery 549 Prudent Behavior for the U. S. Businessperson 552 541

Nonenforcement of IPR Laws 571 The Mechanics of IPR Transfer Regulations 575 Prior-Approval Schemes 575 Noti? cation–Registration Schemes 576 The Gray Market The Nature of the Problem 577 Resolution of the Dispute 577 576 CHAPTER SEVENTEEN LICENSING AGREEMENTS AND THE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS 558 Reasons for Intellectual Property Transfer Arrangements 558 Intellectual Property Rights: Transfer Arrangements 559 Franchising: Licensing Outside the Technological Context 579 CHAPTER EIGHTEEN HOST-COUNTRY REGULATION: CORPORATE LAW, TAXATION, AND CURRENCY RISK 584 Host-Country Corporate Law Affecting Foreign Investment 584

Contents xv Minority Ownership Investments Passive Debt Investments 585 Passive Equity Investments 586 Active Investments 587 Local Assistance 588 Majority Ownership Interests 588 Establishing a Foreign Branch or Subsidiary 588 Tax Issues Associated with Foreign Branches and Subsidiaries 589 Laws Prohibiting Foreign Control 597 Effects of Prohibition of Control 598 585 Preparation for Privatization The Creation and Organization of an Independent Government Corporation 624 Preparation of a Legal System for Privatization 624 Methods of Distribution 625 623 Models of Privatization

Controlling Currency Risk Minimizing Fluctuation Risk: Currency Swaps 599 Arrangements with the Soft-Currency Country 599 Payment and Price Adjustment Approaches 600 Structuring of Hard-Currency Obligations and Revenues 600 Countertrade 601 Informal Consortia or Parallel Exchanges 602 Inconvertibility Insurance 602 598 Sale of a Noncontrolling Interest 626 The Trade Sale 627 The Sale to Employees 628 Concessions: BOTs and BOOs 630 The Models in Combination 632 626 CHAPTER TWENTY LABOR AND EMPLOYMENT DISCRIMINATION LAW 637 General Directions of Labor Law Abroad 637

CHAPTER NINETEEN NATIONALIZATION, EXPROPRIATION, AND PRIVATIZATION 606 Theories Relating to Takings of Foreign Property 606 Employee Participation in Strategic Decisions 637 Impediments to Dismissal 638 Assumption of Employment Arrangements 640 Employment Discrimination Outside the United States 640 The Traditional Theory and Modern Traditional Theory 606 Non-Western Theories of Takings 607 Public Purpose, Nondiscrimination, and the Expropriation–Nationalization Distinction 609 The Extraterritorial Application of U. S. Employment Discrimination Law 641 Defenses to U. S.

Employment Law When Applied Extraterritorially 644 Control by a Foreign Person 645 The Foreign Compulsion Defense 645 The Bona Fide Occupational Quali? cation Defense 645 Antidiscrimination Laws Outside the United States 647 Guarding Against Political Risk Political Risk Insurance 612 Resolving Investment Disputes with Foreign Nations 614 612 Foreign Laws Permitting Dif? cult Work Conditions 653 Unsafe Labor Conditions Prison Labor 654 Child Labor 654 653 Historical Development of Privatization 623 xvi Contents Consequences of Participation in Illegal or Harsh Work Conditions 654

Basic Regulatory Framework CHAPTER TWENTY-ONE ENVIRONMENTAL LAW 662 Consideration of Varying Environmental Requirements 662 Prohibitions Against Agreements to Restrict Competition 691 Abuse of Dominant Market Position 692 The EC Merger Regulation 697 691 Distinctions of Non-U. S. Competition Law Differences in Regulatory Schemes 662 Environmental Law as an Anticompetitive Tool 663 Private Causes of Action for Damages and Criminal Prosecution 704 Article 81(3) and the Rule of Reason 704 Preapproval Procedures Versus Litigation 705 704 Extraterritorial Effect of Competition Laws

Traditional International Remedies The Polluter Pays: Responsibility for Pollution 664 Regulation of Products that Violate Environmental Objectives 665 Regulation of Products with Environmentally Objectionable Production Processes 667 Litigation Against Polluters in an Affected Country 669 Litigation Against Polluters in Polluter’s Home 672 Inadequacies of the Traditional International Pollution-Control System 674 664 The U. S. Effects Test 707 The European “ Implementation” Test 712 Blocking Legislation 716 China Begins to Regulate the Competitive Environment 717 707 APPENDICES

ALL APPENDICES CAN BE FOUND ON THE COMPANION WEBSITE, LOCATED AT ACADEMIC. CENGAGE. COM/BLAW/SCHAFFER A UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS A-1 (TEXT AND ONLINE) B THE GENERAL AGREEMENT ON TARIFFS AND TRADE B-1 (ONLINE ONLY) C MULTILATERAL AGREEMENTS ON TRADE IN GOODS (SELECTED PROVISIONS) C-1 (ONLINE ONLY) D GENERAL AGREEMENT ON TRADE IN SERVICES (SELECTED PROVISIONS) D-1 (ONLINE ONLY) E AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS E-1 (ONLINE ONLY) F NORTH AMERICAN FREE TRADE AGREEMENT F-1 (ONLINE ONLY) INDEX I-1 Emerging Problems and Solutions

Regional Approaches 675 Global Solutions 681 674 CHAPTER TWENTY-TWO REGULATING THE COMPETITIVE ENVIRONMENT 690 Historical Development of International Competition Law 690 TABLE OF CASES Principal cases are in bold type. Other cases discussed in the text are in roman type. Cases cited within the principal cases, or other quoted materials are not included. A. Ahlstrom Osakeyhtio v. Comm’n, 715 A. Bourjois & Co. v. Katzel, 578 Adler v. The Federal Republic of Nigeria, 552 Aguinda v. Texaco, Inc. , 672 Air France v. Saks, 196 Airtours v. European Commission, 699 Alesayi Beverage Corp. v.

Canada Dry Beverage Corp, 113 Alfadda v. Fenn, 108 Alfred Dunhill of London, Inc. v. Cuba, 619 Allied Chemical International Corp. v. Companhia De Navegacao Lloyd Brasileiro, 189 Allied Signal Technical Services Corp. v. M/V Dagmar Maersk, 204 ALS Scan, Inc. v. Digital Service Consultants, Inc. , 96 Aluminios Pozuelo, Ltd. v. S. S. Navigator, 211 Amerada Hess Corp. v. S/T Mobil Apex, 218 American Banana Co. v. United Fruit Co. , 707, 710 American Bell International Inc. v. Islamic Republic of Iran, 249 Anheuser-Busch Brewing Association v. United States, 413 Asahi Metal Industry, Co. v.

Superior Court of California, Solano County, 92 Asante Technologies, Inc. v. PMC–Sierra, Inc. , 122 Asbestos Corp. Ltd. v. Compagnie de Navigation, 205 Badhwar v. Colorado Fuel and Iron Corp. , 188 Banco General Runinahui, S. A. v. Citibank, 254 Bank of America Nat’l Trust & Savings Assn. v. United States, 590 Banque de Depots v. Ferroligas, 166 Barbados Rediffusion Service Limited v. Mirchandani, 522 Barclay’s Bank, Ltd. v. Commissioners of Customs and Excise, 188 Barclays Bank PLC v. Franchise Tax Board of California, 279, 589 Basse and Selve v. Bank of Australasia, 172 BAT Reynolds v.

Commission, 1987 E. C. R. 4487, 714 Bende and Sons, Inc. v. Crown Recreation and Kiffe Products, 158 Bernina Distributors v. Bernina Sewing Machine Co. , 158 Bestfoods v. United States, 473 Better Home Plastics Corp. v. United States, 406 Beyene v. Irving Trust Co. , 254 Bezguia Adoui v. Belgian State & City of Liege; Cornuaille v. Belgian State, 649 Biddell Brothers v. E. Clemens Horst Co. , 170 Bilka-Kaufhaus GmbH v. Karin Weber von Hartz, 651 Binladen BSB Landscaping v. The Nedlloyd Rotterdam, 213 Briggs & Stratton Corp. v. Baldridge, 449 Bulk Aspirin from the People’s Republic of China, 372 Bulmer v.

Bollinger, 509 B-West Imports, Inc. v. United States, 433 C. J. Van Houten & Zoon v. United States, 403 Cabot Corp. v. United States, 376 California v. American Stores Co. , 706 Camel Manufacturing Co. v. United States, 402 Carlill v. Carbolic Smoke Ball Co. , 537 Case Concerning the Arrest Warrant of 11 April 2000 (Democratic Republic of the Congo v. Belgium), 62 Case Concerning the Factory at Chorzow (Poland v. Germany), 68 Case of New Zealand Mussels (Germany), 142 Chateau des Charmes Wines Ltd. v. Sabate, 134 Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 397 Cicippio-Pueblo v.

Islamic Republic of Iran, 617 CMS Gas Transmission Company v. Argentine Republic, 622 Coker International v. Burlington Industries, 152 Comite Interprofessionel du Vin de Champagne v. Wineworths Group, Ltd. , 567 Commission of the European Communities v. Italian Republic, 501, 515 xvii xviii Table of Cases Freedom to Travel Campaign v. Newcomb, 457 Frigaliment Importing Co. , Ltd. v. B. N. S. International Sales Corp. , 44 Gaskin v. Stumm Handel GMBH, 37 General Instrument Corp. v. United States, 491 General Motors Ireland Limited v. SES-ASA Protection SPA, 94 Geneva Pharmaceuticals Technology Corp. . Barr Laboratories Inc. , 124 Georgetown Steel Corp. v. United States, 376 Gibson-Thomsen Co. v. United States, 413 Gilda Industries, Inc. v. United States, 349 Grace Label, Inc. v. Kliff, 159 Graduate Management Admission Council v. Raju, 96 Gulf Oil v. Gilbert, 99 Heavyweight Motorcycles & Engines & Power-Train Subassemblies, 362 Hadley v. Baxendale, 255 Hamdan v. Rumsfeld, 266, 284 Harriscom Svenska, AB v. Harris Corp. , 154 Hartford Fire Insurance Co. v. California, 709 Havana Club Holding v. Galleon, 460 Heartland By-Products, Inc. v. United States, 408 Herman Chang v.

United States, 454 Hudson River Audubon Society of Westchester, Inc. & Save Our Sanctuary Committee: United States, 676 Hyundai Electronics Co. , Ltd. v. United States, 302 Imperial Tobacco Ltd. v. European Parliament & Council, 518 In re Union Carbide Corporation Gas Plant Disaster at Bhopal, 27 In the Matter of Cross Border Trucking, 477 In the Matter of Statoil, ASA, 547 INA Corp. v. Islamic Republic of Iran, 610 Inceysa Vallisolenta, S. L. v. Republic of El Salvador, 549 Inner Secrets v. United States, 429 Intercontinental Hotels Corp. v. Golden, 107 International Shoe Co. v. Washington, 91 Iragorri v.

United Technologies Corp. & Otis Elevator Co. , 100 Iwanowa v. Ford Motor Co. , 656 J. Gerber & Co. v. S. S. Sabine Howaldt, 206 J. H. Rayner and Co. , Ltd. v. Hambro’s Bank, Ltd. , 255 Japan Line, Ltd. v. County of Los Angeles, 278 John Roe I v. Bridgestone Corporation, 656 Compaq Computer Corp. Subsidiaries v. Commissioner of Internal Revenue, 593 Consumers Union of U. S. , Inc. v. Kissinger, 284 Courtaulds North America, Inc. v. North Carolina National Bank, 243 Crosby v. National Foreign Trade Council, 277 David B. Pasquantino, et al. v. United States, 595 Dayan v. McDonald’s Corp. , 18 Dazo v.

Globe Airport Security Services, 226 Delchi Carrier, SpA v. Rotorex Corp. , 148 Department of Revenue of the State of Washington v. Association of Washington Stevedoring Cos. , 278 Department of Transportation v. Public Citizen, 479 DIP SpA v. Commune di Bassano del Grappa, 40 Dole v. Carter, 270 Eagle Terminal Tankers, Inc. v. Insurance Co. of USSR, 219 Eastern Air Lines, Inc. v. Gulf Oil Corp. , 153 Eastern Air Lines, Inc. v. Floyd, 200 Edward Owen Engineering Ltd. v. Barclays Bank International Ltd, 247 Ehrlich v. American Airlines, Inc. , 200 El Al Israel Airlines, Ltd. v. Tseng, 195 Electra-Amambay S.

R. L. v. Compania Antartica Paulista Ind. Brasileira de Bebidas E Conexos, 534 El-Hadad v. United ArabEmirate, 83 Entscheidunger des Bundersgerichtshofs in Zivilsachen, 143 Equal Employment Opportunity Commission v. Arabian American Oil Co. , 641 Equitable Trust Co. of New York v. Dawson Partners Ltd. , 242 Eskofot A/S v. Du Pont (U. K. ) Ltd. , 713 European Parliament v. Council of the European Union and Commission of the European Communities, 510 F. Hoffman-La Roche Ltd. v. Empagran S. A, 712, 718 Federal Energy Administration v. Algonquin SNG, Inc. , 285 Federal Republic of Germany v.

European Parliament and Council of the European Union, 539 Ferrostaal Metals Corp. v. United States, 415 Finnish Fur Sales Co. , Ltd. v. Juliette Shulof Furs, Inc. , 106 First Flight Associates v. Professional Golf Co. , Inc. , 15 Fishman & Tobin, Inc. v. Tropical Shipping & Const. Co. , Ltd. , 225 Foreign Corrupt Practices Act Review Opinion Procedure Release 07-01, 545 Table of Cases Jose Cartellone Construcciones Civiles SA v. Hidroelectrica Norpatagonica SA, 622 Joseph Muller Corp. , Zurich v. Societe Anonyme De Gerance Et D’Armament, 709 Judgment of February 23, 1988 (Austria), 671 K Mart Corp. v.

Cartier, Inc. , 577 Kaepa, Inc. v. Achilles Corp. , 108 KMW International v. Chase Manhattan Bank, 249 Knell v. Henry, 152 Kochi Hoso (Broadcasting Co. ,) 640 Kruger v. United Airlines, Inc. , 225 Kumar Corp. v. Nopal Lines, Ltd. , 185 Kunglig Jarnvagsstyrelsen v. Dexter & Carpenter, Inc. , 218 Kwongyuen Hagkee Co. , Ltd. v. Starr Fireworks Inc. , 112 Leegin Creative Leather Products, Inc. v. PSKS, Inc. 704 Liechtenstein v. Guatemala, 70 Live Swine from Canada, 488 Lobsters from Canada (U. S. -Canada Binational Panel), 666 M. Aslam Khaki v. Syed Mohammad Hashim, 79 MacNamara v. Korean Air Lines, 268 Mahoney v.

RFE/RL, Inc. , 646 Manches & Co. v. Gilby, 109 Marlwood Commercial Inc. v. Kozeny, 549 Matsushita Electric Corp. v. S. S. Aegis Spirit, 202 Maurice O’Meara Co. v. National Park Bank of New York, 238 MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova D’Agostino, S. P. A. , 127 Medical Marketing International, Inc. v. Internazionale Medico Scienti? ca, S. R. L. , 143 Merrit v. Welsh, 408 Metalclad Corporation v. The United Mexican States, 482 Michelin Tire Corp. v. Wages, 278 Microsoft Corp. v. Commission of the European Communities, 693 Mid-America Tire, Inc. v. PTZ Trading Ltd. , 256 Milliken v.

Meyer, 93 Mitsui & Co. v. American Export Lines, 212 Mobile Communication Service Inc. v. WebReg, RN, 563 Monarch Luggage Co. v. United States, 409 Morgan Guaranty Trust Co. v. Republic of Palau, 106 Motions Systems Corp. v. Bush, 363 M/S Bremen v. Zapata Off-Shore Co. , 103 Murray v. The Schooner Charming Betsy, 66 National Farmers’ Union and Secretariat general du gouvernement (France), 513 xix National Group for Communications and Computers, Ltd. v. Lucent Technologies International, Inc. , 157 National Juice Products Association v. United States, 414 National Thermal Power Corp. v.

The Singer Co. , 620 Nissan Motor Mfg. Corp. , U. S. A. v. United States, 425 Ofori-Tenkorang v. American Intern. Group, Inc. , 644 Olympic Airways v. Husain, 197 The Paquette Habana, 49 Pesquera Mares Australes Ltda. v. United States (Chilean Salmon), 369 Pestana v. Karinol Corp. , 189 Phillips Puerto Rico Core, Inc. v. Tradax Petroleum Ltd. , 188 Pillowtex Corp. v. United States, 406 Piper Aircraft Co. v. Reyno, 100 Plastique Tags, Inc. v. Asia Trans Line, Inc. , 208 Prima U. S. Inc. v. Panalpina, Inc. , 215 Pulp Mills on the River Uruguay (Argentina v. Uruguay), 682 Quality King Distributors v.

L’anza Research Int’l. Inc. , 583 Reyes-Gaona v. North Carolina Growers Ass’n, Inc. , 642 Regent Corp. , U. S. A. v. Azmat Bangladesh, Ltd. , 245 Renkel v. United States, 54 Republic of Argentina v. Weltover, Inc. , 614 Rewe–Zentral (Cassis de Dijon), 528 Robertson v. American Airlines, Inc. , 194 Salant v. United States, 410 Samsonite Corp. v. United States, 490 Sanders Brothers v. Maclean & Co. , 167 Sarei v. Rio Tinto, PLC, 655 Saudi Arabia v. Nelson, 615 Scherk v. Alberto-Culver, 89 Schmitz-Werke GmbH & Co. v. Rockland Industries, Inc. , 141 Schneider Electric SA v.

The European Commission, 700 Schooner Exchange v. McFaddon, 66 Seaver v. Lindsay Light Co. , 173 Sebago Inc. v. GB Unic, SA, 578 Senator Linie GmbH & Co. Kg v. Sunway Line, Inc. , 207 Sharpe & Co. , Ltd. v. Nosawa & Co. , 173 Shaver Transportation Co. v. The Travelers Indemnity Co. , 222 Shekoyan v. Sibley Int’l Corp. , 642 xx Table of Cases United States v. Citroen, 408 United States v. Curtiss-Wright Export Co. , 262 United States v. Golden Ship Trading Co. , 391 United States v. Guy W. Capps, Inc. , 285 United States v. Haggar Apparel Co. , 491 United States v. Lindh, 455 United States v.

Mead Corp. , 396 United States v. Microsoft, 704 United States v. Ramsey Yousef, 61 United States v. Roberts, 61 Vimar Seguros y Reaseguros, S. A. v. M/V Sky Reefer, 203 Walt Disney Co. v. Beijing Publishing Press, 573 Warner Bros. & Co. v. A. C. Israel, 188 Waterproo? ng Systems, Inc. v. Hydro-Stop, Inc. , 533 Westway Coffee Corp. v. M. V. Netuno, 208 Wilko v. Swan, 89 Woodling v. Garrett Corp. , 106 World Wide Minerals Ltd. v. Republic of Kazahkstan, 619 Worldwide Volkswagen Corp. v. Woodson, 92 W. R. Grace & Co. v. Local Union 759, 143 W. S. Kirkpatrick v. Environmental Tectronics Corp. 618 WTO/GATT Report on Argentina—Safeguard Measures on Imports of Footwear, 360 WTO/GATT Report on Canada—Term of Patent Protection, 566 WTO/GATT Report on EC Measures Concerning Meat & Meat Products (Hormones Dispute), 342 WTO/GATT Report on European Communities—Measures Affecting Asbestos & Asbestos-Containing Products, 331 WTO/GATT Report on European Communities—Regime for the Importation, Sale & Distribution of Bananas, 300 WTO/GATT Report on European Economic Community— Import Regime for Bananas, 305 WTO/GATT Report on India—Quantitative Restrictions on Imports of Agricultural, Textile, & Industrial Products, 314 WTO/GATT Report on Japan—Taxes on Alcoholic Beverages, 302, 311 WTO/GATT Report on Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef, 319 WTO/GATT Report on Thailand—Restrictions on Importation of Cigarettes, 322 WTO/GATT Report on United States—Continued

Dumping and Subsidy Offset Act of 2000, 379 Silhouette International Schmied GmbH & Co. KG v. Hartlauer Handelsgesellschaft GmbH, 578 Singh v. North American Airlines, 198 Smith-Corona Group v. United States, 382 Smith Kline and French Laboratories v. Bloch, 86 Sony Magnetic Products Inc. of America v. Merivienti O/Y, 226 Sosa v. Alvarez-Machain, 51, 655 South-Central Timber Development, Inc. v. Wunnicke, 280 Southwest Livestock & Trucking Co. v. Ramon, 113 Spanish American Skin Co. v. The Ferngulf, 209 Spector v. Norwegian Cruise Line Ltd. , 66 Sports Graphics, Inc. v. United States, 429 Squillante & Zimmerman Sales, Inc. v. Puerto Rico Marine Management, Inc. , 226 St.

Paul Guardian Ins. Co. v. Neuromed Medical Systems & Support, GmbH, 179 Star-Kist Foods, Inc. v. United States, 273 Stichting ter Behartiging van de Belangen van Oudaandeelhouders in Het Kapitaal van Saybolt International B. V. v. Schreiber, 543 Stiftung v. V. E. B. Carl Zeiss, 109 Stone v. Freeman, 125 Sumitomo v. Avagliano, 269 Suramerica v. U. S. , 296 Synthetic Baler Twine with a Knot Strength of 200 lbs or Less Originating in or Exported from the United States of America, 487 Sztejn v. J. Henry Schroder Banking Corp. , 246 Tarbert Trading, Ltd. v. Cometals, Inc, 125 Tetra Laval BV v. Comm’n, 703 Texas Apparel Co. v. United States, 410 Texas Instruments v.

United States, 403 Thailand—Restrictions on Importation of Cigarettes, 322 Timken Co. v. United States, 296 Tokio Marine & Fire Ins. Co. , Ltd. v. Nippon Express U. S. A, 213 The Trail Smelter Arbitration, 664 Tupman Thurlow Co. v. Moss, 281 Underhill v. Hernandez, 67 Uniroyal, Inc. v. United States, 414 United Bank Limited v. Farooq Brothers and Others, 80 United City Merchants (Investments), Ltd. v. Royal Bank of Canada, 247 United States v. Aluminum Co. of America, 707 Table of Cases WTO/GATT Report on United States—Countervailing Measures Concerning Certain Products from the European Communities (European Steel), 377 WTO/GATT Report on United States—De? itive Safeguard Measures on Imports of Certain Steel Products—Report of the Panel, 366 WTO/GATT Report on United States—Import Prohibition of Certain Shrimp and Shrimp Products, 668 WTO/GATT Report on United States—Sections 301–310 of the Trade Act of 1974, 347 WTO/GATT Report on United States—Standards for Reformulated and Conventional Gasoline, 670 WTO/GATT Report on United States—Subsidies on Upland Cotton, 341 Xerox Corporation v. County of Harris, Texas, 285 Young v. New Haven Advocate, 97 Youngstown Sheet & Tube v. Sawyer, 262 Zicherman v. Korean Air Lines Co. , Ltd. , 199 Zippo Manufacturing Co. v. Zippo Dot Com, Inc. , 96 Z. K. Marine, Inc. v. M/V Archigetis, 211 xxi TABLE OF TREATIES

Arab Convention on Commercial Arbitration, 87 ASEAN Agreement on the Conservation of Nature and Natural Resources, 679 ASEAN Bangkok Declaration, 525 Barcelona Convention for the Protection of the Mediterranean Sea from Pollution, 679 Basel Convention on Transboundary Movements of Hazardous Wastes and Their Disposal, 683 Berne Convention for the Protection of Literary and Artistic Works, 484, 564 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 94 Budapest Convention on Cybercrime, 55 Caribbean Court of Justice Agreement, 522 CARICOM Single Market and Economy Treaty, 522 CARICOM Treaty of Chaguaramas, 522 Cartagena Agreement Creating the Andean Pact, 520 Charter of the United Nations, see United Nations Common Market for Eastern and Southern Africa Treaty, 521 Commonwealth of Independent States Free Trade Agreement, 525 Draft Treaty on Certain Questions Concerning the Protection of Literary and Artistic Works, 564 European Agreement Relating to Community Patents, 561 European Convention for the Protection of Human Rights, 56, 511 European Convention on International Arbitration, 90 European Convention Providing a Uniform Law on Arbitration (Strasbourg Convention), 87 European Criminal Law Convention on Corruption, 542 European Patent Convention, 561 European Union – Treaty Establishing a Constitution for Europe, 506 European Union – Treaty of Amsterdam, 506 European Union Treaty, see Maastricht

Agreement General Agreement on Tariffs and Trade 1947 (GATT 1947), 294-316, 357, 366, 371 General Agreement on Trade in Services (GATS), See WTO Agreements Geneva Conventions (relative to the treatment of prisoners and international humanitarian law), 56, 58, 266 Geneva Convention on the Execution of Foreign Arbitral Awards, 87 Geneva Protocol on Arbitration Clauses, 87 Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil and Commercial Matters, 98 Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, 106 Hague Rules for the Uni? cation of Certain Rules of Law relating to Bills of Lading, 202 Hague System for the International Registration of Industrial Designs, 562

Hamburg Rules, 214 Helsinki Convention on the Protection of the Marine Environment of the Baltic Sea Area, 679 Inter-American Convention on International Commercial Arbitration, 87 International Convention for the Protection of New Variety of Plants, 571 International Labour Organization (ILO) – Conventions, generally, 69 International Labour Organization (ILO) – Convention Concerning Forced or Compulsory Labor, 56, 657 International Labour Organization (ILO) – Worst Forms of Child Labour Convention, 658 Kyoto Protocol to the United Nations Framework Convention on Climate Change, 678, 686 London Convention for the Prevention of Marine Pollution by Dumping from Ships and Aircraft, 679 Maastricht Agreement, 505 Madrid Agreement Concerning the International Registration of Marks of 1891 (Madrid Protocol), 562 Montreal Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation, 61 Montreal Convention for the Uni? cation of Certain Rules for International Carriage by Air, 54, 192-199 Montreal Protocol on Substances That Deplete the Ozone Layer, 684 Multi? er Arrangement of 1974, 344 New York Convention, see United Nations – Convention on the Recognition and Enforcement of Foreign Arbitral Awards North American Agreement on Environmental Cooperation, 484 North American Agreement on Labor Cooperation, 485 North American Free Trade Agreement (NAFTA), 274, 412, 416, 417, 464-497, 675-678 OECD Convention on Combating Bribery of Foreign Public Of? cials in International Business Transactions, 73, 542 Paris Convention for the Protection of Industrial Property, 561 Protocol on Civil Liability and Damage Caused by the Transboundary Effects of Industrial Accidents, 680 Rome Statute of the International Criminal Court, see United Nations Statute of the International Court of Justice, see United Nations Statute of the River Uruguay, 682 Stockholm Declaration on the Human Environment, 681 Treaty of Paris Establishing the European Coal and Steel Community, 504 Treaty of Rome Establishing the European Economic Community, 41, 504-518 Treaty of Westphalia, 47 xxii Table of Treaties

United Nations – Convention against Corruption, 71, 542 United Nations – Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, 54-56, 65, 510 United Nations – Convention on Bills of Exchange and Promissory Notes, 228 United Nations – Convention on Biological Diversity, 571, 681 United Nations – Convention on Contracts for the International Sale of Goods, 118, 120-160 United Nations – Convention on Environment Protection and Sustainable Development of the Carpathians, 680 United Nations – Convention on International Trade in Endangered Species of Wild Fauna and Flora, 684 United Nations – Convention on the Protection and Promotion of the Diversity of Cultural Expressions, 320 United Nations – Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 87, 90, 269 United Nations – Convention on the Rights of the Child, 57 United Nations – Convention to Combat Deserti? ation, 680 United Nations – Framework Convention on Climate Change, 685 United Nations – International Convention on Elimination of All Forms of Discrimination against Women, 56 United Nations – International Convention on the Elimination of All Forms of Racial Discrimination, 56 United Nations – International Convention on the Protection of the Rights of All Migrant Workers, 56 United Nations – International Convention on the Rights of the Child, 57 United Nations – International Covenant on Civil and Political Rights, 56 United Nations – International Covenant on Economic, Social and Cultural Rights, 56 United Nations – Protocol to Prevent, Suppress and Punish Traf? cking in Persons, Especially Women and Children, 56 United Nations – Rome Statute of the International Criminal Court, 56-58 United Nations – Statute of the International Court of Justice, 48, 68 United Nations – Universal Declaration of Human Rights, 56 United States–Central America–Dominican Republic Free Trade Agreement, 274, 423, 493, 520 Uruguay Round Agreement, 275 Vienna Convention on Diplomatic Relations, 53 xxiii

Vienna Convention on the Law of Treaties, 53 Vienna Convention on Protection of the Ozone Layer, 53 Visby Amendments, 214 Warsaw Convention of 1929, 191-198 Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, 87 WHO Framework Convention on Tobacco Control, 539 WIPO Copyright Treaty, 564 WIPO Patent Cooperation Treaty, 571 WIPO Performances and Phonograms Treaty, 564 WTO – Agreement Establishing the World Trade Organization, 297 WTO – Agreement on Agriculture, 340 WTO – Agreement on Basic Telecommunications, 339 WTO – Agreement on Customs Valuation, 409 WTO – Agreement on Government Procurement (1994), 335 WTO – Agreement on Import Licensing Procedures, 334 WTO – Agreement on Preshipment Inspection, 297 WTO – Agreement on Rules of Origin, 413 WTO – Agreement on Safeguards, 357 WTO – Agreement on Subsidies and Countervailing Measures, 374-379 WTO – Agreement on Technical Barriers to Trade, 329 WTO – Agreement on Textiles and Clothing, 344 WTO – Agreement on the Application of Sanitary and Phytosanitary Measures, 341 WTO – Agreement on Trade in Financial Services, 338 WTO – Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), 346, 484, 561, 565, 572 WTO – Agreement on Trade-Related Investment Measures (TRIMS), 345 WTO – Antidumping Agreement, 296, 366-373 WTO – Final Act Embodying the Uruguay Round of Multilateral Trade Negotiations, 297 WTO – General Agreement on Trade in Services, 297, 337-339 WTO – International Technology Agreement, 346 WTO – Revised Agreement on Government Procurement of 2006, 335 WTO – Understanding on Balance-of-Payments, 297 WTO – Understanding on Commitments in Financial Services, 297 WTO – Understanding on Rules and Procedures Governing the Settlement of Disputes, also known as the WTO DisputeSettlement Understanding, 297, 299 TABLE OF STATUTES African Growth and Opportunity Act of 2000, 274 Age Discrimination in Employment Act, 641-647 Alien Tort Claims Act, 50, 655 Americans with Disabilities Act, 66 Andean Trade Preference Act, 428 Andean Trade Program and Drug Eradication Act of 2002, 274 Arbitration Act, 9 U. S. C 1 et. seq. 90 Arms Export Control Act, 432-434 Barbados – Constitution (Amendment) Act, 2003, 523 Barbados – Supreme Court of Judicature Act, 523 Belgian Law of 21 August 1948, 649 British Arbitration Act, 87 Buy American Act, 335-337 Canada – Investment Canada Act, 481 Canada – Special Import Measures Act, 487 Caribbean Basin Economic Recovery Act, 412 Caribbean Basin Economic Recovery Act of 1983, 274 Caribbean Basin Trade Partnership Act of 2000, 422 Carriage of Goods by Sea Act, 202-218 China – Arbitration Law of the People’s Republic of China, 87 China – Company Law of the People’s Republic of China, 373 China – Contract Law for the People’s Republic of China, 120, 126 China – Food Hygiene Law, 329 China – Foreign Trade Law of the People’s Republic of China, 373 China – Frontier Health and Quarantine Law, 329 China – Law on Import and Export Commodity Inspection, 329 China – Law on Metrology, 328 China – Law on Product Quality, 328 China – Law on the Entry and Exit Animal and Plant Quarantine, 346 China – Standardization Law, 328 Civil Rights Act of 1964, 268, 641 Clayton Act, 690 Clean Air Act of 1990, 318, 670 Continued Dumping and Subsidy Offset Act, 379 Cuban Democracy Act of 1992, 457, 716 Cuban Liberty and Democratic Solidarity Act, 459 Customs Modernization and Informed Compliance Act of 1993, 393 Death on the High Seas Act, 199 Defense Production Act, 22 Electronic Signatures in Global and National Commerce Act, 127 Employee Retirement Income Security Act of 1974, 644 Endangered Species Act of 1973, 676 Energy Policy Act of 2005, 686 English Bills of Exchange Act, 228 English Sale of Goods Act of 1894, 119, 170 Equal Pay Act, 644 EU Council Regulation No. 44/2001, 94 EU – Directive Authorization of Electronic Communication Networks and Services, 512 EU – Directive Concerning Distance Marketing of Consumer Financial Services, 512 EU – Directive on E-Commerce, 512 EU – Directive on

Electronic Signature, 528 EU – Directive on Money Laundering, 512 EU – Directive on Privacy and Electronic Communication, 512 EU – Directive on the Harmonization of Certain Aspects of Copyright and Related Rights in the Information Society, 512 EU – Directive on the Prevention of the Use of Financial Systems for Purpose of Money Laundering, 512 EU – Registration Evaluation Authorization and Restriction of Chemicals, 678 EU – Tobacco Advertising Directive, 518 Exon-Florio Amendments, 22 Export Administration Act, 60, 441 Export Trading Company Act, 11 Fair Labor Standards Act, 643 Family and Medical Leave Act, 644 Farm Bill, 340 Federal Arbitration Act, 88 Federal Bills of Lading Act, 164 Federal Court Act, 487 Federal Insecticide, Fungicide, and Rodenticide Act, 675 Federal Trade Commission Act, 419 Flammable Fabrics Act, 324 Foreign Corrupt Practices Act, 71, 541-548, 618 Foreign Narcotics Kingpin Designation Act of 1999, 453 Foreign Sovereign Immunities Act, 66, 82, 614, 615, 635 Foreign Trade Antitrust Improvements Act, 709 Freedom of Information Act, 544 French Civil Code, 91 Generalized System of Preferences, 420 German Standard Contract Terms Act, 139 German Works Constitution Act, 638 Harmonized Tariff Schedule of the United States, 398-410 Harter Act, 202 Hart–Scott–Rodino Act, 706 Helms-Burton Act, 459 Homestead Acts, 623 Internal Revenue Code, 589 International Emergency Economic Powers Act, 276, 277, 441, 452, 455-457, 461 Jackson-Vanik Amendment, 307 Japan – Antimonopoly Law, 691 Japan – Food Staple Law, 339 Japan – Large-Scale Retail Stores Law, 292 Japan – Large-Scale Retail Store Location Law, 293 Japan – Liquor Tax Law, 310 Korean Criminal Code, 541 Korean Monopoly Regulation and Fair Trade Act, 691 Magnuson Fishery Conservation and Management Act, 666 xxiv Table of Statutes

Migratory Bird Treaty Act, 676 Military Commissions Act, 266 Multiparty, Multiforum Trial Jurisdiction Act of 2002, 200 National Emergencies Act, 452 National Labor Relations Act, 644 Neutrality Acts, 432 Occupational Safety & Health Act, 644 Ocean Shipping Reform Act of 1998, 217 Omnibus Trade and Competitiveness Act of 1988, 274, 358 Patriot Act, 453 Puerto Rico Dealer’s Act, 533 Reciprocal Trade Agreements Act of 1934, 272-274, 288 Resource Conservation and Recovery Act, 675 Russian arbitration law, 88 Sarbanes-Oxley Act of 2004, 544, 644 Sherman Antitrust Act, 690, 691, 707-713 Shipping Act of 1984, 217 Smoot-Hawley Tariff Act, see Tariff Act of 1930 Special 301, 347 Super 301, 347 Tariff Act of 1930 (Smoot-Hawley), 260, 272, 273, 288, 350, 399, 576 Telecommunications 301, 347 Thailand – Tobacco Act of 1966, 322 Toxic Substances Control Act, 675 xxv

Trade Act of 1974, 307, 346, 347, 358, 363, 659 Trade Act of 2002, 274 Trade Agreements Act of 1979, 274 Trade and Development Act of 2000, 349 Trade and Tariff Act of 1984, 274 Trade Expansion Act of 1962, 274 Trade Reform Act of 1974, 274 Trading with the Enemy Act, 60, 452-458 U. S. –China Relations Act of 2000, 363 U. S. Constitution, 499 Uniform Commercial Code, 119, 121-126, 130, 137-140, 145, 147, 152, 153, 164, 166, 169, 171, 177, 228, 230, 231, 235, 245, 246 Uniform Foreign Money Claims Act, 109 Uniform Negotiable Instruments Law of 1866, 228 Uniform Recognition of Foreign Money Judgments Act, 108, 112 Uniform Sales Act of 1906, 119 United Kingdom Sale of Goods Act of 1979, 119 Uruguay Round Agreement Act, 295, 296, 358, 367, 374, 376, 576 Webb–Pomerene Act of 1918, 715 Worker Adjustment, Retraining, and Noti? cation Act, 637, 644 PREFACE

It has been said that America’s interest in international education has peaked and ebbed with the changing tide of the American political climate, rising in times of economic expansion and ebbing during periods of political isolation or economic protectionism. Perhaps, however, the cycle has ? nally been broken, and industry leaders, government policymakers, and educators alike have come to understand the importance of making a permanent commitment to international education. In the last half of the twentieth century, America faced an increasingly competitive global marketplace and a mounting trade de? cit. Rather than seek protection behind often-politicized trade laws, America’s leaders committed themselves and the nation to policies of free trade and open investment. American ? ms realized that they had no choice but to compete aggressively with international competitors, in markets both here and abroad. Witness not only America’s great multinational corporations, but also the successes of the many small and medium-sized companies that today do business internationally. Among nations, the spirit of free trade has become contagious. Examples can be seen everywhere: the rush of nations to join the World Trade Organization, the growth of regional economic integration, privat

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