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International trade has evolved and continue to evolve. But in its present form it can be described as the by-product of globalization, political and ideological conflict, breakthroughs in technology and overdependence on fossil fuels. Every major adjustments made were linked to these forces.
As a result it can be said that three of the most pressing issues concerning international trade are:
- the need for international courts and international laws;
- international terrorism; and
- energy security.
These three issues had to be addressed in order for national governments and their respective representatives to the United Nations and other international organizations to develop policies and laws that can eliminate the uncertainties in international trade and ensure that it continues to flourish in the 21st century.
International Courts and International Laws
The importance of well-crafted international laws to help resolve conflict can never be stressed strongly enough. It is imperative to have international laws especially when it comes to business transactions between two multi-national companies. The same thing is true when it comes to international courts because there is a need to have a place or an institution that business organizations can go to in order to settle differences and resolve conflicts.
In a local setting laws and courts are needed to safeguard peace, to punish erring criminals and therefore ensure that streets are safe for young and old alike. Without laws and courts, a country can easily plunge into chaos. From a business point of view, there would be no products and services.
People will suffer because of the lack of food and other basic supplies. The same thing can happen if business organizations cannot resolve conflicts (Janis, 1992). Consider for instance if the supply of wheat is made possible by an exporting company and then all of a sudden a conflict arises making it unprofitable for the said organization to continue supplying wheat.
The stakeholders dependent on the said imports cannot afford to simply stop using the said product. According to experts, the concept of international law and international courts is an old idea. Dutch statesman Hugo Grotius, considered to be the “Father of International Law” argued, “…that all nations should follow one set of rules” (Kolba, 1995, p.10).
There are many who were in agreement and so they finally made the decisive actions beginning in 1864 and Kolba wrote: In 1864, a group of nations met at Geneva, Switzerland, at the urging of Henri Dunant, one of the founders of the International Red Cross […] It produced a set of rules for nations at war called the Geneva Convention […] Only twelve nations signed the convention at first.
Then in 1899 and 1907, delegates met at The Hague in the Netherlands […] These conferences produced more rules, moving beyond war to cover how nations could stay at peace. (Kolba, 1995, p. 10). The International Court of Justice is an example of an institution that can help international trade flourish in the 21st century and limit the problems that can discourage other players from creating a truly free enterprise in a global stage (Amr, 1993).
The said institution does not only helps nations settle their differences without going to war but it can make legal decisions that many nations and heads of state would respect and adhere to. There are similarities with regards to how a local justice system and an international court work. However, there major differences such as the scale of the conflict that has to be resolved and instead of individuals, the international court deals with strained relationships between two multinational companies or sovereign nations.
A good example of an international court is a tribunal created by the United Nations. The purpose of a UN-sponsored tribunal is to ensure that there would be a fair trial. It has been said that without the International Court of Justice, it would have been impossible to have a neutral third party that can be perceived by erring parties to be truly non-biased in tackling their dispute (Knoops, 2003, p.8).
This can be seen through the way judges are selected as seen below: Judges are elected by the General Assembly of the UN after being nominated by Member States […] The input of the General Assembly allows for representation of the interests of the diverse legal systems of the world. Furthermore, ad hoc international tribunals may have the advantage that judges appointed by the General Assembly are more likely to be impartial and representative of the general legal norms accepted by most nations and also be perceived as such (Knoops, 2003, p. 8).
In civilized countries all over the world, civil courts had been proven to be effective in dealing with conflicts between two neighbours or even with groups and organizations. In the case of conflicts between two nations or a multinational company, a similar system is needed but one that can handle the intricacies involved in international relations and international trade.
Threat of International Terrorism
For thousands of years, the nature of warfare was predictable. It can be described as a battle between two armies and the conflict resolved in the battle field. In modern times it was characterized by troop movement as well as the use of modern equipment to increase the efficiency of fighting men.
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But in the latter part of the 20th century and up to the present a new form of warfare was forced into the consciousness of the general public and it is a war rooted in guerilla warfare but done in a manner that combatants are unseen until the moment they choose to strike (Weimann, 2006). This is the methodology of a terrorist hidden from view and willing to destroy high-value targets using unconventional techniques.
According to historians, these groups can be described as “an evolving threat” and they remarked: The modern domestic terrorist threat has adopted advanced organizational and operational techniques that make it increasingly insidious. Terrorists from various groups have demonstrated an ability to work by themselves or in small groups … they can operate as ‘leaderless resistance,’ operating from general instructions or directive, perhaps spread via Web sites.
Such small cells are difficult to detect and stop (Carafano & Sauter, 2005, p. 129). There are two major implications when it comes to the existence of international terror groups and international trade. First of all these extremists have no permanent residency and can move from one country to the next. Secondly, their main objective is to destroy high-value targets such as airports, seaports, and vital structures that can increase the number of casualties.
A crippled nuclear reactor and a tampered water treatment system can easily claim hundreds or even thousands of lives. The ability of terrorists to operate in different parts of the world and to orchestrate a terror plot beyond the reach of their target is made possible by technology, specifically Information Technology (Bielsky, 2005).
In this regard, terrorists can also use computers and the Internet to create mayhem and confusion in the form of cyber attacks (Tipton & Krause, 2005). These men must not be underestimated based on the September 11 attacks on the World Trade Center that showcased their intent and their ability to think-out-of-the-box so to speak.
Cyber terrorists are a new breed of criminals and saboteur for they combine intelligence and the implications of a perpetually changing technology. It is therefore extremely difficult to stop them before they strike. The enemy of free enterprise and democracy can use wireless technology and vanish like the wind. These criminals can use mobile technology and set-up a system in rented apartment or even in a mobile vehicle. Their presence creates a great deal of instability when it comes to
In the oil crisis of the 1970s the world was made aware that oil supply will not last for long. There is a certain limit to the amount of fossil fuel that could ever be used. With a growing global population and the continuing insatiable thirst for energy from factories in China, India, Europe and the United States, there would come a time when there is no more oil, coal, and natural gas that can sustain the need for fossil fuel.
In the case of international trade the importance of energy security cannot be stressed hard enough. The only thing that powers trains, airplanes and cargo ships is nothing more than fossil fuel. If one would remove crude oil for instance from the equation then it would be impossible for the transport of raw materials and finished products. In other words international trade becomes a thing of the past (Jaccard, 2005).
The whole planet reverts back to ancient way of moving goods and services between two nations. The need for energy security has become a problematic issue because of the nature of globalization and international markets. In the past the manufacture of goods was much simpler. Raw materials come from rural areas and transported to the cities where the factories are located.
Industrialists and businessmen simply had to deal with the distance between factories and source of raw materials. In the Medieval Age the problem was partially solved by the use of massive ships that require weeks and months of travel time before raw materials can be transformed into much needed finished products. But most of the time what was transported are goods that are ready to be used, not components that require assembly in another distant location.
Consider also the significance of establishing factories in far-away locations as China and India (Chambers, 2003). Consider the implications when it comes to logistics and energy requirements needed to sustain that kind of operation. It has become painfully clear that as the industrialized world continues to demand for cheaper products the threat of an energy crisis looms large.
In recent years soaring prices has provided a glimpse as to what can happen if products and services are no longer available because there is no means to transport raw materials and finished goods. International trade can easily fail on account of one factor and it is energy needs. The worst case scenario can include famine, anarchy, and destabilization of societies.
Governments are powerless to deal with the aftermath of an energy crisis wherein factories can no longer operate; power plants can no longer provide electricity, and the paralysis of the transport sector forcing life to come to a standstill. It is therefore important to solve this problem before it happens. There is so much incentive to deal with it in the present and not wait for the future outcome of a planet unable to live without fossil fuel.
The short term solution is to maximize oil production and to increase the efficiency of the recovery of fossil fuel from oil-rich countries. Energy saving measures are also in place as well as the need to change habits and lifestyles to conform with the reality of dwindling oil supplies. But there is only one sustainable solution and it is to stop using fossil fuel by developing alternative sources of energy taken from renewable sources.
It is imperative to focus on three major issues related to international trade. There is a need to improve the capabilities of international courts and there is also the need to create international laws that can help resolve conflicts between multinational companies and organizations that have dealings with different countries.
But it is also important to deal with the threat of international terrorism. An international terrorist is difficult to apprehend but more importantly an international terrost can destroy high-value targets that could threatne the stability of airports, seaports, and transportation hubs vital to international trade.
All these two factors combine cannot match the serious implication of an energy crisis. The whole world must come together to find a solution to an impending energy crisis.
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Chambers, A. (2003). Renewable Energy in Nontechnical Language. Tulsa, OK: PenWell Books.
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