International Trade Law Firms: A Powerful Way to Help Your Business Grow
October 8, 2020
If you are trading internationally or are considering going into imports or exports, then you need to know about International Trade Law Firms. These can provide crucial advice and support when it comes to venturing onto the global trade market. In this article, you will learn everything there is to know about international trade, international trade law firms, and how they can help you with your business.
What is International Trade?
At its heart, international trade is all about goods and services getting from A to B – with A and B being different countries.
International trade is a huge contributor to our growing global economy. Supply and demand are hugely influenced by what happens around the world, and this has an impact on prices.
As an example, if there were to be any political changes in Asia, the cost of labour might go up. This would then have a knock-on effect on the manufacturing costs of a European clothing company based in Vietnam.
As a consequence, the clothing items could become more expensive for European customers, who might not be willing to pay the price.
Import and export
Exporting is when a home country or company sells its goods and services to another foreign country or company. Importing, on the other hand, is when a country or company buys foreign products and brings them into their home country.
Global trade enables nations to use their own resources such as technology, land or labour more efficiently, through a careful balance of imports and exports. Of course, different nations have different natural resources and assets.
Global trade makes it possible for countries to produce the same goods more effectively by saving time and money. This also means they can then sell this product more cheaply. If a country is unable to produce a good efficiently, it can purchase it by entering into trade with another country that is able to provide it. The specialisation is the term used in international trade to describe this.
In 2018, the top importing countries were the US, China, Germany, Hong Kong, and the UK. The top exporting countries were China, the US, Germany, Japan and Korea.
What is the comparative advantage?
Comparative advantage is the term used to describe an economy’s ability to produce a service or product which has a lower opportunity cost than its trading partners. This advantage makes it possible for a country to sell products and services for less than its competitors, which leads them to a higher sales margin.
Comparative advantage is a crucial concept of economic theory. It is also a vital precept of the idea that anyone, at any time, can mutually benefit of cooperation and trading with another party. It is one of the founding principles of international trade.
If you want to understand comparative advantage, you first need to understand what opportunity cost is. Put simply, an opportunity cost is a potential benefit that someone misses out on when choosing one option over another.
When considering comparative advantage, the opportunity cost for one party is lower than that of another. The party that has the lower opportunity cost, and thus the smallest potential benefit which was lost, holds the comparative advantage.
Another way to look at a comparative advantage is as the best option given a trade-off. When deciding between two different options, with each one having both pros and cons, the option that has the best overall package will be the one with a comparative advantage.
The pros and cons of import and export
Trade influences all of our lives on a daily basis. And with such wide ramifications, there are of course pros and cons to import and export.
- Import and export, when compared to other ways of entering the global trade market, presents a smaller investment of time and money.
- Import and export present huge job opportunities and is the easiest route for any country or company to enter the global trade market.
- No country can ever be fully self-sufficient, so import and export is vital to the good functioning and prosperity of a country.
- Import and export provide nations access to the newest technologies and highest-quality goods and services.
- Import and export, when contrasted with other paths into global trade, is less risky.
- Good can be under the obligation to conform to certain regulations and quality standards.
- Focusing too much on clients in other countries can make you lose touch with local markets and customers.
- Exporting has its limits when it comes to other country regulations and prohibitions.
- Importing and exporting goods incurs extra costs when it comes to transportation and insurance costs.
- Home companies which are more closely located can be better able to serve than companies in other countries.
- It can be a very tiresome task to sort through different documentations and trade licences.
International trade and its legal ramifications
Just like commerce occurring within a country, international trade is governed by contracts: but with goods and services delivered across international borders, which country’s law governs the contract? Under international law, the parties involved can specify which country’s law will govern their contract and which country’s courts will rule on any disputes.
The same country doesn’t have to be chosen in both instances: in theory, the contract could be governed by the laws of A, with disputes being heard in B’s courts. Parties are also free to pick the laws of a completely unrelated third country.
What if B doesn’t want to let A’s goods into the country? If both countries are members of the World Trade Organisation (WTO), then a lawyer’s role can be somewhat limited. If, for example, they’re representing a company from country A, whose goods are being blocked from entering country B, then legal action can’t be brought on behalf of the client directly.
Only member states can access the WTO’s dispute resolution mechanism, so the company in question would first have to lobby A’s government to bring a case against B.
The role of international trade law firms
The work of international trade lawyers is split between two main areas: the application of domestic law to international trade, and treaty-based international law governing trade flows.
On the domestic side, work covers export controls, embargoes and economic sanctions, import relief actions such as anti-dumping, countervailing duties and safeguards, and customs classifications, valuation and rules of origin matters.
In relation to international treaties, attorneys advise on World Trade Organization (WTO) rules, preferential trade regimes such as the North American Free Trade Agreement (NAFTA) and bilateral investment treaties (BITs).
Lawyers advise on the implementation of these domestic and international rules, and counsel clients in disputes related to their violation.
Who does this concern?
In order to gain market share, a company will often seek to develop its business internationally. This brings with it additional risks, which the company must manage. International trade involves not only tariff barriers but non-tariff barriers, such as the different laws that apply to international commercial transactions between traders.
Companies engaging in international trade must negotiate their way through local laws, international treaties and the rules of common trade practices. Legal counsel must be versed in all three.
Top 7 International Trade Law Firms
Cleary Gottlieb Steen & Hamilton LLP
Cleary Gottlieb is an international practice in 16 different centres worldwide. They help clients effectively manage a wide range of customs and trade matters.
Thanks to their presence in both Brussels and Washington, they have access to the key regulatory bodies in the European Union and the United States. This also means they can effectively offer coordinated transatlantic advice.
Their lawyers can address a broad range of trade matters, including multilateral and bilateral trade dispute settlement, trade negotiations, trade defence, import and export regulations, foreign investment restrictions, sanctions and unfair trade practices.
Akerman’s International Trade and Customs Practice offers their customers strategic advice in order for them to gain and maintain their advantage in the global trade market.
Chambers Global singled them out for their deep expertise in international trade matters, helping both multinational and local companies with all aspects of the movement of goods and services across borders.
Akin Gump Strauss Hauer & Feld LLP
Akin Gump Strauss Hauer & Feld LLP offers a whole range of services built to optimize their customers’ ability to engage in the cost-efficient and timely trade of products and services across borders, in full compliance with applicable laws and regulations.
They help clients with legal matters in front of the World Trade Organization (WTO); the Office of the U.S. Trade Representative (USTR); the International Trade Commission; the departments of State, Treasury, Commerce, Justice and Homeland Security (including U.S. Customs and Border Protection); and other federal agencies and offices that deal with international trade regulation.
Van Bael & Bellis
Van Bael & Bellis is an independent law firm with offices in London and Brussels.
They were founded in 1986 and now have a multi-jurisdictional team of lawyers. These offer specialised advice to clients ranging from government bodies and multinational corporations to international law firms and international trade.
Van Bael & Bellis also have a third office in Geneva which takes care exclusively of World Trade Organisation matters.
Dentons work to offer their clients a competitive advantage. With strong connections in the places where their clients do business, Dentons know how important understanding local cultures in order to do business successfully or resolving a dispute.
They are currently the largest law firm in the world. Dentons’ global team develops tailored solutions to meet the local, national and global needs of public and private clients of any size in 188 locations serving 77 countries.
Their customers can access legal expertise within 25 sectors and 40 practices.
Norton Rose Fulbright
Norton Rose Fulbright provides global corporations and financial institutions with a full business law service. They have over 3,700 lawyers and other legal staff based in Europe, the US, Asia, Canada, Australia, Latin America, Africa and the Middle East.
Recognized for their industry focus, their expertise spans across many different industries and sectors: infrastructure, mining and commodities; financial institutions; transport; energy; technology and innovation; and life sciences and healthcare.
Thanks to their global risk advisory group, they can use their industry experience with their knowledge of compliance, legal, governance, and regulatory issues to offer their clients with practical solutions to the regulatory and legal risks facing their businesses.
Legal challenges come from all directions. Hogan Lovells understand and collaborate with their customers to solve the toughest legal issues within major industries and commercial hubs worldwide. Whether that’s expanding into new markets, dealing with increasingly complex regulation or disputes or, considering capital from new sources, Hogan Lovells can help.
How COVID-19 has impacted international trade
The COVID-19 pandemic represents an unprecedented disruption to the global economy and world trade, as production and consumption are scaled back across the globe.
The World Trade Organisation is currently forecasting a 9.2% drop in the volume of world merchandise trade for 2020. However, they are predicting a 7.2% rise in 2021. However, these predictions are extremely uncertain, as they depend on the evolution of the pandemic and government responses to it.
Current data suggest a possible drop for 2020 that is less severe than the 12.9% drop that was initially forecast by the World Trade Organisation in April. This is due to strong trade performances in June and July, which have led to some optimism for overall trade growth in 2020.
How International Trade Law Firms can support CONNECTS members
CONNECTS is a global online business matchmaking platform. Members have access to thousands of potential partners, suppliers, opportunities and clients from all around the world.
If members wish to start a business with a company from another country, there will most probably be some rules and regulations that need to be considered before any deals can start.
This is where International Trade lawyers can be extremely helpful. They can advise both parties as to how to draft contracts in order to remain compliant with international law, thus avoiding any sticky situations.
If you are considering international trade as part of your business operations, going by an International Trade Law Firms and seeking their advice is the best solution to ensure successful business and compliance with international legislation.
Are you an entrepreneur wanting to develop your business? Join our Business Matchmaking Platform and take advantage of 3 months free trial.