Research Proposal on "International Business Law"

Research Proposal 9 pages (2404 words) Sources: 11 Style: Harvard

[EXCERPT] . . . .

LEGAL IMPLICATIONS for INTERNATIONAL EXPANSION INTO USA of Business CURRENTLY ESTABLISHED in THAILAND, MALAYSIA, HONG KONG, SINGAPORE & AUSTRALIA

PRESENTATION to BOARD of DIRECTORS

The purpose of this presentation is to familiarize the board with the legal implications for expansion of a business currently established in Thailand, Malaysia, Hong Kong, Singapore and Australia into the United States. Toward this end the first section of this presentation will be comprised of a brief review of trade negotiation agreements between each of these countries and the United States then followed by information that is relevant to expansion into the United States marketplace.

United States Trade with Thailand, Malaysia, Hong Kong, Singapore and Australia

Malaysia- U.S. Trade

In June 2006 negotiations on a Free Trade Agreement were initiated between the United States and Malaysia. U.S. goods and services trade with Malaysia is stated to have totaled approximately $48 billion in 2007 and Malaysia is current the 17th largest goods trading partner with the United States. In 2007 Malaysia's Foreign Direct Investment (FDI) in U.S. stock was $355 million.

B. Thailand -- U.S. Trade

Free trade negotiations were launched between the United States and Thailand in 2004 but these were suspended in 2006 after the dissolution of the Thai Parliament and the following military-led coup. Presently Free Trade negotiations are suspended between Thailand and the United States although discussions of bilateral issues and the advancement of the Doha negotiations, the APEC and ASEAN agendas are still on the table. The United States and Thailand are reported to have held "informal consultations... [in what was]... A formal dialogue on trade and investment issues in Washington D.C. In June 2008 and informal meetings in March 2009." (Office of the United States Trade Representative, 2009) Concerns raised by the United States included those regarding Thailand's: (1) customs practices; (2) labeling requirements and other technical barriers to trade; (3) market access for U.S. beef and live cattle; and (4) the deterioration of intellectual property rights protection in Thailand over the past several years. (Office of the United States Trade Representative, 2009)

The United States reports that it will continue monitoring and evaluating the political situation in Thailand, and will "as appropriate...consider steps to further strengthen bilateral economic relations." (Office of the United States Trade Representative, 2009)

C. Singapore -- U.S. Trade

The U.S. -- Singapore Free Trade Agreement (FTA) is reported to have been the first "comprehensive FTA with an Asian country." (Office of the United States Trade Representative, 2009) This FTA went into force in 2004 and export from the U.S. To Singapore is stated to have increased approximately 73% with a steady growth reported in "...medical devices, electrical and non-electrical machinery and construction equipment, and pharmaceuticals." (Office of the United States Trade Representative, 2009)

The United States announced in September 2008 that its intention was to begin negotiations in joining the "Trans-Pacific Strategic Economic Partnership (TPP) agreement, a high-standard FTA between Singapore, Chile, New Zealand, and Brunei Darussalam, intended to serve as a vehicle for Trans-Pacific economic integration. Shortly after the U.S. decision to join the negotiations, Australia, Peru, and Vietnam indicated their interest in participating as well. A public hearing on TPP was held on March 4, 2009." (Office of the United States Trade Representative, 2009)

Singapore is reported at the 27th largest import market for the United States as of 2008 with importation of agricultural products from Singapore totaling $133 million in 2008. Singapore FDI in the United States was reported at $10.2 billion in 2007 which was a 90.3% increase over 2006. Primary Singapore FDI in the U.S. is in the real estate and rental and leasing and banking sectors.

D. Australia-U.S. Trade

The United States and Australia Free Trade Agreement (FTA) went into effect on the first day of January 2005. Australia is reported as the 24th largest goods trading partner of the United States with $32.8 billion in total goods trade during 2008.

E. Hong Kong -- U.S. Trade

The goods and services trade with Hong Kong and the United States totaled approximately $40 billion in 2007. Hong Kong is presently the 26th largest goods trading partner with the U.S. with $28.0 billion in total goods trade during 2008.

II. Business Expansion into the U.S. And Trademarks

The work of Kenneth Suzan and Hodgson Russ (2004) entitled; "Expand Your Brand Into the U.S." states that central to brand expansion into the United States is the strategic development of a strong trademark/service mark portfolio that sufficiently protects the source identity of a company's important intellectual property assets." (Suzan and Russ, 2004) Suzan and Russ additionally state that competitors "....are likely to keep a close watch on marks used (or anticipated to be used) in a particular industry. Inclusion of a company's marks in a government database accessible by anyone worldwide at USPTO.GOV should send a strong signal to competitors to avoid choosing a similar brand name that is likely to cause confusion in the marketplace. This advantage starts several weeks after filing an application as records of newly filed trademark and service mark applications are constantly added to the database at USPTO.GOV." (Suzan and Russ, 2004)

Stated as other benefits of registering marks with the United States Patent and Trademark Office include those as follows:

(1) Nationwide trademark and service mark priority rights,

(2) Presumption of validity and exclusive rights to use the mark in the United States,

(3) Availability of "incontestable" status after five years of continuous use (a type of immunity from many types of challenges that can be filed by third parties against the registration),

(4) Reliance by the USPTO upon a federal registration in rejecting a third party's application that is confusingly similar,

(5) Ability to use the registration symbol, ," to give nationwide notice of trademark rights, (6) potential availability of recovering treble damages and attorneys' fees in an infringement proceeding, and (7) Ability to block the importation of infringing goods through the assistance of the U.S. Customs Service by recording the trademark registration details. (Suzan and Russ, 2004)

Suzan and Russ (2004) report that prior to "...rolling out new products or advertising services in the United States, it is recommended that companies conduct a full U.S. trademark/service mark search. With the assistance of U.S. trademark counsel, companies should assess whether a particular brand name, slogan, or logo is available for use and registration in the United States. A thorough search should include research and analysis of pending and registered federal trademarks and service marks, state trademarks and service marks, common law marks, filings made pursuant to the Madrid Protocol, Internet domain names, and Web sites. Receiving the green light from counsel is only a preliminary step for brand expansion into the United States...companies seeking to conduct business in the United States should also consider registering their trademarks and service marks with the USPTO. The benefits of registration will likely outweigh the initial costs of obtaining the registration. Presently, the official filing fee charged by the USPTO is U.S.$335.00 per class of goods or services listed in the application. It is possible to file a multiple class application covering a wide range of goods and services. Companies should also budget for legal fees and costs associated with the preparation and prosecution of the application." (Suzan and Russ, 2004)

Securing of valuable priority rights in the U.S. makes it "...essential that trademark or service mark applications be filed early on in the development of the product or service." (Suzan and Russ, 2004)

III. International Financial Reporting Standards (IFRS)

International Financial Reporting Standards (IFRS_ have been adopted in 100 countries throughout the world. Because of this a thorough knowledge of IFRS is required for businesses that are internationally active. Because international expansion is likely to result in cross-border acquisitions and joint ventures as well as raising international debt finance and development of relationships with private equity houses and rising of capital from the equity markets and other such transactions, an increased requirement exists for a detailed understanding of the International Reporting Standards (IFRS).

Australia is reported to have been one of the first OECD members to adopt the International Financial Reporting Standards (IFRS). Hong Kong is working toward the provision of audit and IFRS conversion services and Singapore is also in the process of integrating these standards. Member firms are also in existence in Hong Kong and Malaysia.

IV. Global Labor Standards and Corporate Social Responsibility

The work of Lee (2009) entitled: "Corporate Social Responsibility in the Asian Context: Local Issues and Global Standards" states "The tension and conflict that arise from the term "corporate social responsibility" (CSR) should be distinguished by the following two concepts. First is the relationship between business and society, and second is the sense of "responsibility" that appeared against the concept of charity and philanthropy. The underlying notion is that because a business takes root as part of a society, its activities are by nature "social," and that it follows the behavioral norms of that society, which by and large characterize it and determine… READ MORE

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