Business Law in the Global Context PDF

Business Law in the Global Context
1

Table of Contents
Introduction................................................................................................................................1
The shift of economic power......................................................................................................2
The challenges in the integration of the international business.................................................6
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................10
2

Introduction
The economic power was concentrated among the developed nations for a long being and the
reason for the concentration of the economic power was the high growth level of the
developed economies than the developing and emerging economies. But, there is a recent
shift of the paradigm as the developing countries including China and India have shown a
sharp growth rate in the context of the world economy. China has become the third biggest
trading nation in the world in respect to the countries which are enlisted in WTO. The
enhancement of growth and economic power of the developing countries have raised the
issue of political instability in the framework of the world economy and the introduction of
G-20 forum instead of the G-7 framework has opened a new horizon in the framework of the
world economy. The report emphasizes on the issues of shifting of the power from the
developed economies to developing economies and how the economic integration is being
challenged due to this shifting.
The shift of economic power
Economic power refers to the degree of interdependence or the integration among different
countries. The rise in the power of the individual countries can rise the threat of making the
trade in a small scale and here it is to be noted that in this case the reflexion of the trade is
limited in nature. If the power is being exercised on a specific country rather than a group of
3

countries then the threat is considered as high in nature. Power in this respect can be
considered as the integrated power of the group of countries and the shift of the power
towards the non-OECD countries refer to the integration of power of the non OECD
countries1. Another dimension of economic power lies in the will power of the countries for
acting in a collaborative way for the purpose of conducting the international negotiations. In
this respect power in the economic context refers to the prevailing size of the economies and
also the expected future size of the economies. In case of the global negotiations, the rules are
being established in the context of the future interactions of the countries and it depends how
the rules can shape the influence of the country in negotiation. The economic power in this
respect is related with the power to coerce and it is related to the expectation of the future
growth of the economics. The third dimension of change in power comprises the change in
the intellectual and soft power related considerations which are used to influence the
negotiation power of the rivals2.
The global economic power has changed from last few decades as the economic power has
been shifted from West to East. With the growth of the developing nations the economic
power also is shifting towards the developing nations. The future economic power will be
concentrated in the developing nations and there will be three major impacts on shifting the
economic power towards the developing countries and those are: enhancement of the
purchasing power of the developing countries which in turn would increase the demand of the
consumers, the new investments is introduced in the framework of developing nations which
in turn would increase the investment opportunity of the developing nations and the
prevailing infrastructure in the developing countries are inviting the private-public
1 Eugenio Díaz-Bonilla, Søren Elkjær Frandsen and Sherman Robinson, WTO Negotiations And Agricultural
Trade Liberalization (CABI Pub 2006).2 Amjad Hadjikhani and Peter Thilenius, Non-Business Actors In A Business Network (Elsevier 2005).
4