Agriculture Reference
In-Depth Information
International law and property rights issues
A global agribusiness must understand the many legal systems of the countries in which it
operates. Once an international fi rm enters a country, it automatically becomes subject to all
of that country's laws. Some governments may monitor daily business activities very closely
while others may regulate only the large-scale activities of an agribusiness.
Probably the most important legal issues arising out of operating in the global economy
are the interpretation and enforcement of various regional trade agreements. Examples of
such agreements include the North American Free Trade Agreement (NAFTA), the World
Trade Organization (WTO), and several other large regional trade groups including the
European Union (EU), the Association of Southeast Asian Nations (ASEAN), and the Asia-
Pacifi c Economic Cooperation Group (APEC). Each of these represents a restructuring,
reorganizing, and refocusing for companies as they respond to the changing competitive
mix of the global marketplace.
These alliances, agreements, and trade initiatives affect the practice of business world-
wide. They mean companies will continue to inspect the hows and whys of conducting busi-
ness effi ciently enough and effectively enough to be competitive in the world market. For
example, the 1994 North American Free Trade Agreement (NAFTA) spurred U.S. exports
to Canada and Mexico. The NAFTA agreement reduced tariffs on agricultural commodities
and removed trade barriers.
Most countries protect intellectual property rights (IPR) such as trademarks, patents, and
publications. However, because these patents are issued in a particular country, they are
valid and legal only within that country's jurisdiction. Some countries, most notably several
in the Far East, do not have—or have not enforced—laws that protect these intellectual
property rights, though progress is being made on this front.
Since joining the World Trade Organization, China has strengthened its legal framework
and amended its IPR laws and regulations to comply with the WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS). Despite stronger statutory
protection, China continues to be a haven for counterfeiters and pirates. According to
one copyright industry association, the piracy rate remains one of the highest in the world
(over 90 percent) and U.S. companies lose over one billion dollars in legitimate business
each year to piracy. On average, 20 percent of all consumer products in the Chinese market
are counterfeit. If a product sells, it is likely to be illegally duplicated. U.S. companies
are not alone, as pirates and counterfeiters target both foreign and domestic companies
(U.S. Embassy in China).
Private property, and the protection of it, is another important international legal issue.
Individual nations, including the United States, reserve the right to take over private property
when it is in the best interest of the host country. In the United States, as with other countries,
the government may take over private property for a “public purpose” (the United States
uses the laws of condemnation or eminent domain to do this). But, the interpretation of what
“public purpose” means is often at issue.
Sanitary and phytosanitary regulations
Sanitary and phytosanitary (SPS) regulations
(with phytosanitary defi ned as sanitary
with regard to pests and pathogens) are intended to protect human, animal, and plant life or
health. SPS regulations have been instituted in many countries because consumers in devel-
oped countries demand higher levels of food safety. However, in some cases, these SPS
