International Trade and Finance Law Term Paper
- Length: 7 pages
- Subject: Economics
- Type: Term Paper
- Paper: #78054175
Excerpt from Term Paper :
In the case of United States, Article 9 of the Uniform Commercial Code provides for practically all types of security agreements for owned property that are both for own use as also for commercial purposes. This type of agreements includes fixtures which mean personal property that is attached to the property, and the ready example can be a water heater. This does not include other liens taken on the property like the lien of a mechanic are not covered by this act, but are covered by the individual laws that govern them. There is also a statute of frauds and that requires a security agreement to be in writing for it to be valid, unless the property has been pledged for getting the loan. This sort of a pledge takes place when the borrowing party shifts the collateral to the lender of money in exchange for the loan that he has been given. The reason for making a security agreement perfect is to make the lender gain precedence about the collateral over any other party. For this purpose, generally a public notice is required. (Secured transaction law: An overview) This also covers most of the commercial transactions in different forms. (UCC: Uniform commercial code)
One of these statements under section 9-310 is that "When a person in the ordinary course of his business furnishes services or materials with respect to goods subject to a security interest, a lien upon goods in the possession of such person given by statute or rule of law for such materials or services takes priority over a perfected security interest unless the lien is statutory and the statute expressly provides otherwise." (9-310. Priority of Certain Liens Arising by Operation of Law) There are also laws which protect the rights of the lender to receive interest that is due to him and the concerned clause is article 9-203. (9-203. Attachment and Enforceability of Security Interest; Proceeds: Formal Requisites) In short, it can be seen that ensuring payment from the parties is not easy and that is the reason why most international trade is insured. This will make sure that the exporter will at least get some money for his goods if not the totality. Even the efforts that have been made by United Nations have not been accepted by all countries, and that makes the situation even more complex.
The most difficult reason for International trade to take place is the interest that politicians take in the matter. Let us look at the recent summit of Americas that has just ended in Argentina. It is clear that there are a lot of opportunities for business which is held back by political views. At the first point, the American President did not object to the direct request from Chavez of Venezuela that Argentina build a nuclear reactor in Venezuela for energy production. Within a period of one day, Stephen Hadley, the national security advisor mentioned directly that Chavez has asked a number of countries to build the nuclear reactor in Venezuela but was not being able to get it. Clearly this is an instance where trade opportunities are being sacrificed for political advantage. This attempt of gaining political advantage was also seen in certain other areas. This was causing a lot of difficulties to the efforts to come to a consensus required for the final communique to be issued at the end of the summit. (Troubles follow Bush to Argentine summit)
One of the main issues of dispute was regarding job creation and the representatives of USA had suggested that the communique take care of "the 96 million people who live in extreme poverty" in Latin America and the Caribbean, subsisting on $1 a day or less. This was being opposed by Venezuela who said that it will agree to the inclusion of that statement if it also included another phrase saying "while in the United States there are 37 million poor." (Troubles follow Bush to Argentine summit) There was the highest amount of differences regarding free trade which is supposed to be the key for economic growth in the entire region. There were efforts by United States for issuing a statement for resumption of negotiations in the talks for establishment of free trade, but this was being opposed from the major countries of South America - Brazil, Argentina and Venezuela. At the same time, there is an "anti-summit" going on. This is being led by a Nobel Prize winner, Adolfo Perez Esquivel and Diego Maradona, the idol for soccer. Chavez has a role to play in both the summit and the anti-summit. (Troubles follow Bush to Argentine summit) It is clear that international trade is not given the level of importance that it deserves and this is probably the reason for the financial difficulties that it faces.
The matter of interest in the matter is now to know the final result of such a big effort at establishing understanding between different countries. In terms of trade it ended up achieving nothing and according to a spokesman, the matter was deferred till the end of another conference scheduled for December. (Negotiators fail to agree on free trade proposal) Thus it can be seen clearly that international trade is not given a high priority by the political authorities.
The situation is clearer after one finds out the views of Prime Minister Paul Martin of Canada. He had tried, along with President Bush to speed up the creation of a free trade zone for the two continents together. Martin was also encouraged by the fact that 29 out of the 34 countries in the region supported the concept of open borders for trade. He does not accept the contention of some that the entire concept of a free trade zone is dead. Yet the interesting concept of a free trade zone covering all countries from Alaska to the tip of South America could not succeed due to the differences of opinion regarding the terms that it involved. The main problem for Brazil, Argentina, Paraguay and Uruguay was the refusal of United States to discus the question of agricultural subsidies before the World Trade Organization process that starts in December. The opinions of President Chavez were different - he called it an effort by capitalists to exploit the poor. (PM defensive over election threat) The only thing that this shows is that there are clear groups about international trade, and the groups are often based on politics, though the similar politics may have originated from similar economic situations.
The financial question for international trade depends a lot on political situations and the overall financial position of the countries that are involved. This is turn makes trading difficult as obstacles are put in the path of trade for benefits of individual countries.
9-203. Attachment and Enforceability of Security Interest; Proceeds: Formal Requisites.
Retrieved at http://www.law.cornell.edu/ucc/9/9-203.html. Accessed 10 November, 2005
Bailey, Sue. PM defensive over election threat. Retrieved at http://cnews.canoe.ca/CNEWS/World/2005/11/03/1291616-cp.html. Accessed 10 November, 2005
Banking: An overview. Retrieved at http://www.law.cornell.edu/topics/banking.html. Accessed 10 November, 2005
Bumiller, Elisabeth; Rohter, Larry. 2005. Troubles follow Bush to Argentine summit. The New York Times. November, 6. Retrieved at http://www.iht.com/articles/2005/11/04/news/bush.php. Accessed 10 November, 2005
Negotiable instruments law: An overview. Retrieved at http://www.law.cornell.edu/wex/index.php/Negotiable_instruments#negotiable_instruments_law:_an_overviewAccessed 10 November, 2005
Negotiators fail to agree on free trade proposal. Retrieved at http://cnews.canoe.ca/CNEWS/World/2005/11/05/1294272-ap.html. Accessed 10 November, 2005
9-310. Priority of Certain Liens Arising by Operation of Law. Retrieved at http://www.law.cornell.edu/ucc/9/9-310.html. Accessed 10 November, 2005
Secured transaction law: An overview. Retrieved at http://www.law.cornell.edu/topics/secured_transactions.html. Accessed 10 November, 2005
UCC: Uniform commercial code. Retrieved at http://www.law.cornell.edu/ucc/9/overview.html#PART%201Accessed 10 November, 2005
UNCITRAL Convention on International Bills of Exchange and International Promissory Notes. 1988. Retrieved at http://www.jus.uio.no/lm/un.bills.of.exchange.and.promissory.notes.convention.1988/doc.html. Accessed 10 November, 2005