Type
Solution Manual
Book Title
Business Law with UCC Applications 14th Edition
ISBN 13
978-0077733735

978-0077733735 Lecture Notes

April 10, 2019
Chapter 34 - International Law and the New World Order
Chapter 34
International Law and the New World Order
I. Key Terms
Associated persons National treatment principle (p. 899)
and forces (p. 889) New world order (p. 870)
Authorization for the Use of Neoconservatism (p. 873)
Military Force (p. 887) Neoliberalism (p. 873)
Chaotic events (p. 881) North American Free Trade
Civilization (p. 874) Agreement (NAFTA) (p. 900)
Commission on Science and Predictive political history (p. 870)
Technology for Development (p. 897) Preemptive war (p. 885)
Competent authority (p. 883) Preventative war (p. 885)
Covering laws (p. 872) Principle of honorable
Dispute Settlement Board surrender (p. 885)
(DSB) (p. 899) Principle of repentance (p. 884)
Dispute Settlement Understanding Principle of restoration (p. 885)
(DSU) (p. 899) Probability of success (p. 883)
Economic Security Council Proportionality (p. 883)
(ESC) (p. 897) Protective war (p. 885)
Economic zone (p. 880) Realism (p. 872)
Euro (p. 900) Realpolitik (p. 872)
European Union (EU) (p. 900) Reflexivity principle (p. 880)
General Agreement on Tariffs Right intention (p. 882)
and Trade (GATT) (p. 898) Secretariat (p. 890)
General Assembly (p. 881) Secretary General (p. 890)
Geneva Conventions (p. 889) Security Council (p. 891)
Idealism (p. 873) Tariff-based principle (p. 899)
International Court of Justice Theory of international
(ICJ) (p. 891) behavior (p. 870)
International Criminal Court Uncertainty principle (p. 880)
(ICC) (p. 895) UN Commission on International
International initial Trade Law (UNCITRAL) (p. 896)
conditions (p. 870) UN Convention on Contracts for
International Monetary Fund the International Sale of Goods
(IMF) (p. 898) (CISG) (p. 896)
Just cause (p. 882) Volition variable (p. 880)
Just war theory (p. 882) War Powers Resolution (p. 887)
Last resort (p. 883) World Bank (p. 898)
Liberal World order (p. 869)
Internationalism (p. 873) World Trade Organization
Most-favored nation (WTO) (p. 899)
principle (p. 899)
II. Learning Objectives
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
1. Explain the process of predictive political history.
2. Identify and define the theories of international behavior.
3. Identify and define the various sets of global initial conditions.
4. Describe the mission of the International Criminal Court.
5. Identify the main goal of UNCITRAL.
6. State the differences between the UCC and the CISG.
7. Outline the structure of the World Trade Organization.
8. Relate the objectives of the Dispute Settlement Understanding.
9. Determine the major purpose of NAFTA.
10. Clarify the goals of the European Union.
III. Major Concepts
34-1 The New World Order
When a political scientist wants to use predictive political history to explain the past, to
predict the future, or to handle an international crisis, he or she must first determine the
present state of the global system (the international initial conditions or the new world
order) and then match that system to the correct set of covering laws under an accurate
theory of international behavior. The four theories of international behavior are
Realpolitik; idealism; neoconservativism; and neoliberalism. Each international
behavioral theory can be summarized by reducing it to several covering laws. A covering
law is a rule of behavior that follows consistently predictable pattern such that it can be
described as dictating normative decision-making processes. The four sets of initial
conditions are (1) economic initial conditions, (2) cultural initial conditions, (3)
ideological initial conditions, and (4) hybrid initial conditions.
34-2 International Law and War
War has many significant effects on the transaction of business in the international
marketplace. One of the key questions concerning the nature of war as it relates to
international business is whether the war is just. Ethical and legal philosophers in the
West have developed criteria for determining when a war can be considered legally and
morally correct. This theory is termed the just war theory.
34-3 The United Nations and the Global Community
The stated purposes of the United Nations are to advance human rights, to end war, to
enhance human achievement, to support peaceful international coalitions, and to promote
international fidelity to truth, justice, and the rule of law. The promotion of international
law has taken many forms within the structure of the United, Nations, including the
International Court of Justice, the UN Commission on International Trade Law, and the
UN Convention on Contracts for the International Sale of Goods. The International
Criminal Court also plays a key role in policing international justice.
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
34-4 International Law, Finance, and Trade
To deal with issues of finance and trade on a worldwide scale, several international
organizations and agreements have emerged that are designed to make global dealings
work as smoothly as local ones. These include the International Monetary Fund, the
World Bank, the World Trade Organization, the North American Free Trade Agreement,
and the European Union.
IV. Outline
I. The New World Order (34-1)
A. Introduction
1. The phrase “new world order” is frequently used to describe situations on the global
stage that are unusual and unfamiliar.
2. The phrase can be used to describe the situation in which we find ourselves today.
3. A world order is a set of initial conditions that describes how nation-states relate to
one another on a global scale.
4. The use of the word new to describe that world order reveals that these initial
conditions have just emerged from a tectonic shift in international relations.
B. Patterns within the New World Order
1. In the new world order, patterns have yet to be determined.
2. Sometimes diplomatic errors and international incidents follow pattern shifts.
C. The Underlying Technique: Predictive Political History
1. Predictive political history is a technique for determining how world leaders will
probably act in a given world order when facing a crisis or mapping out a future
global strategy.
2. If a political scientist wants to apply predictive political history, he or she must first
determine the present state of the global system (the international initial conditions or
the new world order) and then match that system to the correct set of covering laws
under an accurate theory of international behavior.
D. The Theories of International Behavior
1. Realpolitik or realism
a. The international order can be described as a chaotic system.
b. The chief actors on the global scene are nation-states, with some having more
power.
c. National leaders customarily look for a rational (logical) way to sustain or widen
their own power.
d. In regard to special considerations, the power that leaders have is curbed by
NGOs.
2. Idealism or liberal internationalism
a. The global order is not fully chaotic but is instead controlled by the NGOs.
b. Nation-states share power with the NGOs.
c. Nation-states and NGOs seek power and control but do so in the interests of
international peace, by following international law and using military action only
within international coalitions.
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
d. In regard to special considerations, the final best state of affairs that all
nation-states seek (or should seek) is the formation of a democratic or a
republican world government.
3. Neoconservativism
a. The global landscape is chaotic.
b. Nation-states are the chief actors and all foreign policy decisions must be made to
echo the “deepest values of liberal democratic societies.”
c. The United States must be involved in global affairs and, in doing so, must
promote democratic principles.
d. In regard to special considerations, neoconservatives voice a wariness for social
reengineering missions, suspicion about the usefulness of NGOs, and a belief in
the effectiveness of unilateral (as opposed to multinational) military crusades
including especially preemptive and preventative strikes
4. Neoliberalism
a. The global community scene is largely chaotic.
b. Nation-states and NGOs share the global power with international corporations.
c. International corporations cross frontiers and act to preserve their own existence,
as do nation-states; however, internationals act reasonably as they work to
generate higher profits.
d. Nation-states and international corporations act as collaborative partners and in
doing so, follow the morality of profit.
E. The Global Initial Conditions
1. Economic Initial Conditions
a. The economic new world order sees the international community as divided into
two sectors: (1) those nations that are economically stable and secure and, thus,
have healthy, functioning economies and (2) those nation-states that are
economically dysfunctional.
b. The goal is to overcome or eliminate disconnectedness between economically
stable and economically dysfunctional nations.
2. Cultural Initial Conditions
a. This view sees the globe as divided into eight distinct civilizations that are more
or less autonomous and more or less incapable of successfully cooperating with
more than one, or at the most two, other civilizations.
b. A civilization is a group of people in a series of different nation-states that share
common characteristics, including history, religion, tradition, beliefs, often
language, and sometimes ancestry.
c. One of the rules proposed is the prime directive of the civilizational world order,
that is, that each civilization should never interfere with the internal affairs of
another civilization.
d. Under this version of the new world order, international law has two goals: to
promote civilizational autonomy and to protect civilizational rights.
3. Ideological Initial Conditions
a. The ideological new world order sees nation-states grouped based on politics.
b. In this international environment, the job of international law is to help build and
protect a modern concert of democracies that would unite the democratic states
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
into a treaty of mutual protection and act as a counterbalance to the new autocratic
empires.
4. Hybrid Initial Conditions
a. Bromfield proposes that the major global powers, including the United States,
Europe, Russia, China, Japan, and India, establish regional economic zones
among those nations closest to them.
b. Economic zones are unified but isolated sectors of economic activity based on
geographical areas designed to focus on the economic well-being of the nations in
each zone.
c. Once these zones were economically and politically secure, the members of each
zone would trade only with other nations within their respective zones which
would continue until the members of each zone developed economically secure
relationships among themselves.
d. Eventually, each zone could enter open trade agreements with nations outside the
four established zones, but only when those outside nations were ready to partici-
pate as economic equals.
5. Unlike the laws of physics or those of chemistry, the covering laws of predictive
political history are limited by the free will of the people who operate within that
system which is referred to as the volition variable.
6. Predictive political history might also be disrupted by the uncertainty principle in
which, for example, value judgments may affect a decision.
7. Predictive political history can also be disrupted by unexpected, uncontrollable
chaotic events.
II. International Law and War (34-2)
A. Introduction
1. War may affect international business.
2. When entering a contract that relies on the international marketplace, it is wise for all
parties to be aware of the international conditions in areas of the globe that could
affect the contract.
3. If a court in the U.S. deems an international crisis foreseeable, the loss suffered by the
parties affected by the crisis will not be offset by the court.
B. The Just War Theory
1. The just war theory has been invoked for defending and for questioning the morality
of many armed conflicts.
2. The theory focuses on certain areas.
a. It establishes the following criteria for deciding whether a war can be morally
justified:
(a) Just cause.
(b) Right intention.
(c) Competent authority.
(d) Probability of success.
(e) Proportionality.
(f) Last resort.
b. It institutes criteria for the proper conduct of a war.
c. It adds a set of criteria that establish the rules of conduct that must be followed
after a war ends.
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
C. Preemptive and Protective War
1. A nation-state starts a preemptive war to stop another nation-state’s imminent attack
on the first nation-state.
2. A nation-state begins a preventative war to stop another nation-state from reaching a
point that it would be capable of attacking the first nation.
3. In 2002 preemptive war became an active strategic policy of the United States.
4. During the administration of President Barack Obama, the United States launched a
protective war aimed at assisting civilians in Libya.
5. In dealing with questions of the legality of a war, the U.S. generally defers to the
judgment of the United Nations.
6. Title VII of the United Nations Charter places most of the decision making process in
relation to military action in the hands of the United Nations Security Council.
7. The War Powers Resolution is designed to limit the power of the president as
Commander-in-Chief of the Armed Forces to commit American troops to the field
and to maintain those troops in the field contrary to Congressional approval.
8. The Authorization for the Use of Military Force (AUMF) is an act passed in 2002 by
Congress in the wake of the 9/11 attacks and addresses the right of the U.S. to use
self-defense and force to prevent future acts of international terrorism against the U.S.
9. In 2015 the president presented a reengineered version of the AUMF act of 2002,
which had not yet been acted upon as of the printing of the text, giving the president
the authority to use military action to oppose ISIS and any associated persons and
forces, and making other changes.
D. Substantive and Procedural Issues
1. The Geneva Conventions attempt to deal with many of the problems brought on by
the nature of warfare in the modern era such as issues concerned with prisoners of
war and occupation forces.
2. Substantive changes in the law of war and international relations are frequently
complicated by procedural and analytical questions.
3. The fact that a convention has been written and adopted does not mean that it will be
properly applied.
4. U.S. courts have established some guidelines for interpreting international agreements
such as the Geneva Convention.
III. The United Nations and the Global Community (34-3)
A. The Structure of the United Nations
1. The United Nations is an enormous, complicated organization that is made up of
many agencies, organizations, courts, and commissions.
2. The three major governing bodies are the Secretary General, The General Assembly,
and the Security Council.
a. The Secretary General is the chief administrator of the United Nations.
b. The General Assembly is made up of all of all the member nations of the UN.
c. The Security Council deals with crises that involve threats to international peace.
B. International Law and the United Nations
1. The United Nations respects the sovereignty of each member state which is both a
strength and a weakness.
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
2. The International Law Commission is responsible for leading the way in the
development and codification of international law which must be joined voluntarily
by each nation-state.
3. One of the principal vehicles for the establishment of international law and justice is
the International Court of Justice (ICJ).
a. The ICJ is made up of fifteen judges.
b. Only sovereign nations have legal standing to initiate a case before the ICJ.
c. Subject matter jurisdiction in the ICJ is outlined within the UN Charter and legal
questions may involve the interpretation of treaties and international conventions.
4. In order to deal with crimes against humanity, an official International Criminal Court
(ICC) was set up by the Rome Statute of the International Criminal Court.
a. Unlike the ICJ, the ICC is not an official agency of the United Nations.
b. The objective of the court is to preside over trials involving genocide, war crimes,
and other human rights violations.
c. A key difference between the ICJ and the ICC is that the ICC has jurisdiction over
individual defendants.
d. The ICC does not have original jurisdiction over a defendant.
(a) The defendant’s own government prosecutes the defendant before the ICC
claims jurisdiction.
(b) Should the defendant’s government fail to bring legal action, the ICC can
then step into the case.
e. The ICC can only hear cases involving citizens of countries that ratified the
original treaty that created the Court, and the United States has not ratified the
treaty.
C. Economic Regulation and the United Nations
1. In 1996 the General Assembly of the United Nations authorized the creation of the
UN Commission on International Trade Law (UNCITRAL).
a. The commission consists of thirty-six nations chosen to represent the primary
social, economic, legal, and geographical areas of the globe.
b. The goal of the commission is to cultivate the organization and integration of
international law in relation to international trade.
2. The UN Convention on Contracts for the International Sale of Goods (CISG) became
effective in 1988 and applies only to sales between businesses located in different
countries.
a. The agreement specifically excludes contracts involving goods purchased for use
by individuals or families.
b. The CISG affects the formation of an international trade contract as well as the
rights and duties that arise under such contracts.
c. The CISG does not deal with the validity of such contracts nor with the liability of
the seller for harm caused by the goods.
d. The CISG involves only those contracts between merchants.
3. The efforts extended by the United Nations to monitor and regulate economic
conditions in the global marketplace are evident in the existence of a number of
organizations including the Economic and Social Council (ECOSOC), the UN
Conference on Trade and Development (UNCTAD), regional agencies such as the
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
Economic Commission for Africa and the Economic Commission for Europe, and
other agencies.
4. The Division for Science and Technology was created in response to
recommendations made by the eighth conference of the United Nations Conference
on Trade and Development (UNCTAD) and the Ad Hoc Working Group of the
International Commission on Science and Technology.
a. The Division of Science and Technology was created to coordinate the activities
of several agencies that had previously been charged with handling issues of
international cooperation in the sharing of science and technology for economic
development.
b. Many experts urge an even more unified response in this regard.
D. An Economic Security Council
1. The Commission on Global Governance, a twenty-six member international
organization, has suggested streamlining the surveillance of international economic
efforts under the auspices of an Economic Security Council (ESC).
2. The ESC would be a singe, unified international agency under the management of the
United Nations that would monitor the economic activities of the member nations of
the UN and implement long-term strategic planning to promote sustainable
development.
3. The ESC would not take the place of existing international agencies.
IV. International Law, Finance, and Trade (34-4)
A. The International Monetary Fund and the World Bank
1. The International Monetary Fund (IMF) is designed to serve as a way for financially
strapped nations to secure loans that will help them engage in programs of sustainable
economic growth and development.
2. The World Bank has a mission that is quite similar to the mission of the IMF.
3. The difference is that the IMF is dedicated to helping all nations, developed,
developing, and undeveloped, with fiscal problems, while the World Bank works
exclusively with the poorest nations in the international community.
B. The World Trade Organization
1. After the end of World War II, the primary trading nations of the international
community met to work out the details of a major trade agreement.
2. The agreement, named the General Agreement on Tariffs and Trade, had as part of its
original plan the creation of an International Trade Organization.
3. The International Trade Organization was never established, but conferences
continued to be held, resulting in the creation of the World Trade Organization
(WTO)
4. The World Trade Organization was designed to serve as the corporate nucleus for the
management of international trade relationships.
5. The WTO replaced GATT.
6. All agreements, treaties, and trade obligations created under GATT have been
included in the WTO.
7. The structure of the WTO involves three levels:
a. The Ministerial Conference.
b. The General Council.
c. The Secretariat.
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
8. The WTO has established certain overall principles that regulate how member nations
must treat one another in the world of international trade.
a. The national treatment principle states that WTO nations must apply the same
standards to imports that they apply to domestic goods.
b. The most-favored nation principle maintains that all member nations must apply
the same privileges, advantages, and benefits to all other member nations in
relation to similar imports.
c. The tariff-based principle asserts that the only way that member nations can
regulate the imports of other nations is through tariffs.
9. The Dispute Settlement Board (DSB) of the WTO was established to provide a forum
for the settlement of trade disputes among member nations.
C. The North American Free Trade Agreement
1. The North American Free Trade Agreement (NAFTA) is a trading coalition that
includes the United States, Canada, and Mexico.
2. The goal of the coalition is to establish a trading market in North America free from
the burdens imposed by internal tariff barriers.
D. The European Union
1. One of the most significant events to impact international law and commerce lately
was the inauguration of the European Union (EU).
2. In order to adopt the euro, Europe’s common currency, in addition to being a member
of the European Union, a country must also have other characteristics such as a stable
inflation rate.
3. The EU has been active in the development of cyber-commerce directives in order to
head off proposed legislative initiatives in the individual member nations.
V. Background Information
A. Cross-Cultural Notes
1. Taiwan is not a member of the United Nations, and its membership is opposed by
China. For more information, see “Taiwan’s UN Dilemma: to Be or Not To Be”
from the Brookings Institution at
http://www.brookings.edu/research/opinions/2012/06/20-taiwan-un-winkler.
2. Croatia joined the European Union in 2013. Information regarding other prospective
members to the European Union is available from the BBC at
http://www.bbc.com/news/world-europe-11283616.
B. Historical Notes
1. In regard to a Nuremberg Trials Project, the Harvard Law School library has
approximately one million pages of documents relating to the trial of leaders of Nazi
Germany before the International Military Tribunal and to trials of other accused war
criminals before the United States Nuremberg Military Tribunals. The library is in the
process of digitizing these documents. Information regarding the project and some
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
documents and other information are available at
http://nuremberg.law.harvard.edu/php/docs_swi.php?DI=1&text=overview.
VI. Related Cases
1. Judgments, advisory opinions, and Orders from the International Court of Justice are
available at http://www.icj-cij.org/docket/index.php?p1=3&p2=5. For example, a
judgment of September 24, 2015, involving a dispute between Bolivia and Chile
pertaining to access to the Pacific ocean, rejected a preliminary objection raised by
Chile and found that the court had jurisdiction to entertain an application filed by
Bolivia in 2013.
VII. Teaching Tips and Additional Resources
1. The Internet site for the United Nations is at http://www.un.org/. Additional
information regarding the United Nations such as its history and other information is
available at http://www.un.org/en/aboutun/index.shtml.
2. Additional information regarding the International Court of Justice including recent
press releases can be found at http://www.icj-cij.org/homepage/index.php?p1=0.
3. The website for the International Criminal Court is at
https://www.icc-cpi.int/en_menus/icc/Pages/default.aspx. The structure of the court is
at https://www.icc-cpi.int/en_menus/icc/structure%20of%20the
%20court/Pages/structure%20of%20the%20court.aspx.
4. The Internet site for the World Bank can be found at http://www.worldbank.org/. An
interesting list of questions regarding the World Bank is at
http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/0,,contentMDK:20264
002~menuPK:572065~pagePK:41367~piPK:279616~theSitePK:40941,00.html.
5. Additional information on the International Monetary Fund can be found on its web
site at http://www.imf.org/external/index.htm.
6. Information for students and young professionals is available from the World Trade
Organization at http://www.wto.org/english/forums_e/students_e/students_e.htm. Key
information by country is available at
http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm.
7. The U.S. Department of State has a site devoted to the European Union at
http://www.state.gov/p/eur/rt/eu/, with links to information including the identities
and backgrounds of member countries.
8. Discuss with students the problems of intellectual property infringement outside the
United States. The United States Patent and Trademark Office has information
regarding the protection of intellectual property, including information regarding
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
Chapter 34 - International Law and the New World Order
international protection, at
http://www.uspto.gov/about/stratplan/ar/2006/30204_intel_policy.jsp.
9. An article from NPR titled “How NAFTA Changed American (and Mexican) Food
Forever” is available at
http://www.npr.org/sections/thesalt/2015/02/13/385754265/how-nafta-changed-ameri
can-and-mexican-food-forever.
10. A great deal of information regarding the European Union is available from the
website of the CIA at
https://www.cia.gov/library/publications/the-world-factbook/geos/ee.html.
11. For an extensive treatment of the just war theory in the twenty-first century, see Just
War against Terrorism by Jean Bethke Elshtain (New York: Basic Books, 2003).
12. Inform students that before the International Court of Justice (ICJ) can hear a
contentious case, all of the parties to the proceedings must have recognized the
court’s jurisdiction.
13. Present the students with these questions: Why should the United States feel the need
to trade with other nations when so much can be grown and manufactured right in our
own country? Do other countries need us as trading partners more than we need
them?
14. Invite a representative of an international trade organization or a public relations
representative from a multinational corporation to speak to the class about world
trade.
15. Have students research facts and statistics about the current U.S. policy on tariffs and
free trade in order to participate in a class discussion. The point of the discussion
should lead to the following question: Will there eventually be free trade throughout
the world?
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.

Subscribe Now

Sign up to view full document

View Document