International Trade

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Evaluate two of the scenarios listed below and explain the best solution for each. Include comments related to any ethical issues that arise. Support your responses with appropriate cases, laws and other relevant examples by using at least one scholarly source from the SUO Library in addition to your textbook for each scenario.

Scenario 1—International Trade
The Director of Purchasing for parts distribution company wants to purchase steel coach screws from Germany; however, he is not sure what the best option is. The director comes to you and asks your opinion. You know that Germany, Canada, and Korea are the best sources for obtaining this product. While your research shows coach screws from Germany are of the highest quality, the United States imposes a tariff of 12.5%, which makes this option noncompetitive.

Which US trade laws should you consider when selecting a country?
Is there any way by which you can seek a reduction on the tariff? If so, how? If not, why?
Select an alternative country (Canada or Korea) for purchasing the coach screws and explain your reasons for selecting the country.
Scenario 2 – Bribery
Slyce Pizza Company purchased four commercial refrigerators for the restaurants and eight pizza ovens from a supplier in Italy. Between the shipping costs, delays, and unanticipated duties, the purchasing manager was worried that his boss would be upset about the total costs. In an effort to reduce costs, the manager offered a US Customs officer $500 in cash to re-classify the imported goods to reduce the amount of duties owed.

Analyze the legal and ethical ramifications of the purchasing manager’s offer to the customs official?
Would it make a difference if the purchasing manager offered to donate $500 to St. Jude Children’s Research Hospital if the officer expedited the paperwork necessary to release the goods from custom’s custody?
Scenario 3—Environment
Recycling Genie is a new company that contracts with Best Buy and other electronics retailers for the collection old computers, monitors, televisions, and cell phones dropped off at their facilities. The electronics contain lead, mercury, and polyvinyl chlorides that are known to have toxicological effects such as cancer, kidney disease, and brain damage. Recycling Genie has been in negotiations to ship the e-waste to companies in China, Vietnam, and Mongolia.

What are the legal and ethical concerns with shipping e-waste to these countries?
Scenario 4—Property
Ginger and Allen lived together in New Mexico since 2011, but they were not married until July 2013. Allen purchased the home in 2008, prior to meeting Ginger. He did not add Ginger to the title after they were married; however, she contributed to the mortgage payments from 2011 until she started her business in 2013. In September 2013, Ginger inherited $55,000 from her father that she used to start a corporation, Fantastic Faces, a beauty consulting business

Ginger worked full time for Fantastic Faces, while Allen continued with his job teaching at the university. Allen made no contributions to Fantastic Faces. Due to limited financial resources, Ginger did not earn any salary until 2015.

In May 2013, Allen inherited 20 acres of farmland in Alabama from his grandfather. The land was leased to a local farmer. Allen visited the farm after the funeral in 2013 but did not return to Alabama. The rental income of $5,000 per year was deposited into the couple’s joint account. Allen filed for divorce in New Mexico on November 10, 2015.

Explain the how the court will determine the ownership of the house, farmland, and business based on New Mexico law.
Determine how the court would decide if the couple resided in your state instead of New Mexico.

Sample Solution

Scenario 1: International Trade

Trade Laws:

When selecting a country for purchasing coach screws, the following U.S. trade laws should be considered:

  • Tariff Harmonized System (HTS): The HTS is a classification system used to determine tariffs on imported goods. By understanding the HTS code for coach screws, you can identify the applicable tariff rate.
  • Free Trade Agreements (FTAs): The U.S. has FTAs with several countries, including Canada and South Korea. These agreements may offer preferential tariff rates or other trade benefits.

Tariff Reduction:

To potentially reduce the tariff on coach screws from Germany, you could explore the following options:

  • Negotiate with the German Government: Engage in diplomatic efforts to negotiate a reduction in the tariff rate.
  • Lobby Congress: Advocate for changes in U.S. trade policy to reduce tariffs on specific products, such as coach screws.
  • Consider Alternative Sources: If reducing the tariff is not feasible, explore alternative sources for coach screws, such as Canada or Korea.

Alternative Country:

Given the 12.5% tariff on German coach screws, it would be advisable to consider purchasing from Canada or South Korea. Both countries have FTAs with the U.S., which may offer lower or even zero tariffs on coach screws. Additionally, these countries are known for their high-quality manufacturing standards, making them suitable alternatives.

Scenario 2: Bribery

Legal and Ethical Ramifications:

Offering a bribe to a customs official is illegal and unethical. It constitutes a violation of U.S. anti-corruption laws and can result in severe penalties, including fines and imprisonment. Bribery undermines the integrity of the customs system and can lead to corruption and inefficiency.

Impact of Donation:

Offering a donation to a charity as a bribe is not a legitimate or ethical alternative. While charitable donations are generally encouraged, they cannot be used to influence government officials or avoid legal obligations.

Scenario 3: E-Waste

Legal and Ethical Concerns:

Shipping e-waste to developing countries like China, Vietnam, and Mongolia raises significant legal and ethical concerns. These countries often lack adequate environmental regulations and waste management infrastructure to properly handle e-waste. This can lead to the dumping of hazardous materials, pollution, and health risks for local communities.

International treaties, such as the Basel Convention, regulate the transboundary movement of hazardous waste. Shipping e-waste to developing countries without proper permits and safeguards can violate these regulations and result in legal consequences.

Scenario 4: Property Ownership

Ownership of the House:

Under New Mexico law, the court will likely consider the following factors when determining ownership of the house:

  • Common Law Marriage: If Ginger and Allen were considered common law married, they would have an equal right to the house, even though Allen was the sole owner.
  • Contributions: The court may consider Ginger’s contributions to the mortgage payments and her role in maintaining the house.
  • Intent: The court may also consider the parties’ intent regarding ownership of the house.

Ownership of the Farmland:

The farmland is likely to be considered Allen’s separate property, as he inherited it before marrying Ginger. However, if Ginger contributed to the maintenance or improvement of the farmland, she may be entitled to a portion of its value.

Ownership of the Business:

The business, Fantastic Faces, is likely to be considered Ginger’s separate property, as she started and operated it. However, if Allen contributed to the business in any way, he may have a claim to a portion of its value.

If the couple resided in a different state, the laws governing property ownership and divorce would vary. It is essential to consult with an attorney to determine the specific laws that apply in the relevant jurisdiction.

 

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