Chapter 5 the Political and Legal Environment

Chapter 5 The Political and Legal Environment

Allan

February 9, 2019

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The political and legal environment in the home country, the environment in the host country, and the laws and agreements governing relationship among nations are all important to the international marketer. One must be extremely familiar with these to conduct international business. Some of these laws and regulations control imports and exports. A company might not be allowed to import a certain product or might get taxed heavily on that import. In this paper I will be going over the different political and legal hurdles that international marketers must get by to succeed.

Embargoes and sanctions are some of the strongest governmental actions that can be used against another country. These embargoes and sanctions halt trade or restrict importing certain things to a certain country. This is a popular tool of foreign policy used by the United States and currently maintain sanctions with countries such as China. What happens frequently with these sanctions is that any firms that look to trade with the sanctioned company are either fined or not traded with by the country imposing the sanction. As an international marketer one must be weary of these sanctions and make sure not to anger the wrong people.

Many countries also have export control systems which control any products physically transferred out of the exporting country. In the United States if someone wants to export something, they need to get an exporting license. Many regulations and requirements need to be met to officially receive an exporters license. All of this is so that a firm isn’t exporting something that the United States wouldn’t want in a country that isn't friendly with United States. These exporting control systems can be harmful if government implement unfair systems. In Argentina an export control system was put in to limit the amount of soy being exported and it caused many farmers to rebel against it. This then led to food shortages and riots.

Exporting control in today’s business world tries extremely hard to limit the trade of high-level technology and destructive weapons to countries that aren’t too stable. Keeping such technologies and weaponry out of Third World countries