Important developments in international trade relations over the last two weeks show how diverse this field is and how quickly events unfurl. They include the following areas: global antitrust, international taxation (transfer-pricing), newer non-tariff barriers (general national economic regulation), the Russian Federation’s accession to the WTO and recent EU complaints, and the International Telecommunication Union’s (ITU) communications treaty impacting Internet regulation.
…. The EU has levied its biggest fine ever of $1.92 billion. This case involves an international price-fixing cartel (cathode-ray tubes) of foreign corporations. The USDOJ is continuing a similar investigation. The EU previously fined $1/2 billion the LCD makers over its cartel. “Global Cartels Fined.” Wall Street Journal (December 6, 2012).
…. A good discussion of Apple’s use of transfer-pricing, licensing intellectual property rights, and off-shore tax havens to amass two billions dollars offshore and to avoid paying EU and U.S. corporate income taxes. “Apple and Billions Offshore.” New York Times (12.6.12).
…. Annual review of global trade by the Director-General of the WTO. Calls for addressing increase in new restrictive trade measures, that anti-dumping measures are on the rise, regional trade arrangements continue to be strong utilized, and new national regulatory measures are emerging as newer non-tariff barriers. The world needs a renewed commitment to revitalize the multilateral trading system. Lamy, “Overview of Developments in the International Trading Environment.” (WTO, December 2012).
…. Russia has been criticized by the EU for not following the rules concerning its accession to the EU, just four months after joining the WTO. “Russia’s Interest in Following the Rules.” Financial Times (December 10, 2012).
…. The United States refused to sign the new ITU treaty at the World Conference on International Telecommunications (WCIT) in Dubai, the first new one in 24 years, because of its inclusion of provisions concerning the Internet that the U.S. feels would lead to international regulation of it, a reversal of the private regulation of it, even though aspects of the treaty dealt with freedom of speech and cyberwarfare. “U.S. Leads Rejection of Treaty on Internet.” Financial Times (December 15, 2012).
Additional items of great importance that demonstrate the rapidly evolving landscape and newer issues now being considered as part of international trade relations in this decade are the following: (i) HSBC’s massive global money laundering and payment of $1.9 billion in fines; (ii) UBS’s soon to be announced guilty plea to criminal charges concerning fixing the LIBOR rate (a potential fine of $1 billion); (iii) the extension of U.S. capital requirements to foreign banks doing business in the United States through subsidiaries; (iv) allegation of overseas bribery by Rolls Royce; the U.K. investigation by the Serious Fraud Unit (SFU); (v) extensive application of U.S. trade sanctions to foreign corporations; (vi) calls to revise U.S. international corporate taxation concerning foreign tax havens, bank secrecy, transfer-pricing, worldwide taxation, among other issues.
The items above further highlight the increasing importance of the extraterritorial application of U.S. economic legislation as well as that of other countries to global transactions of all kinds.
This is really a great time to be involved in this dynamic and critical area. It is about time that professionals and professors engaged in global trade pay more attention to the legal and regulatory nature of this field. Recognizing that it is more and more becoming the poster child of this century. One involving great implications for trade, peaceful relations and national security for all nations.