Legal Aspects of International Trade and Enterprise: A Nike Case Study

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Legal aspect of international trade and
enterprise

Contents
Introduction.................................................................................................................................................3
Question 1: Identification of multinational company (MNC) chose with a brief description of the
company and key data.................................................................................................................................3
Question 2: Identification of regulatory framework/s affecting the chosen MNC and discussion of why
and how it affects the company...................................................................................................................4
Question 3: Identification of treaties, conventions or agreements that have impacted on the products or
services the chosen MNC provides in Australia..........................................................................................7
Referencing.................................................................................................................................................9

Introduction
International laws and legal aspects serve just to enhance international trade, promote prosperity
and investment. These mechanisms and laws are categorized into two main categories,
international public law and the private law of international trade although these two categories
importantly overlap upon each other. The law deals with private trade towards the obligations
and rights of international investors and traders facing each other. Also, there is a need for a
system that can resolve the conflicts of law between the individual belongs to different legal
systems. Here, it has also initiated the value of promoting harmonization in order to reduce the
cost of trade transaction between people from different law or legal cultures. The countries who
are implementing the law on international trades are required to develop proper compromises so
that cooperative behaviour between nations can be set up. Here, there is a requirement to find out
the system and processes in order to promote international rules. International trade laws are
important to improve productive investment in foreign trade and enterprises.
This assignment will help in studying the MNC Company that is Nike, this study will enable to
understand the relevant legislative, treaties, regulatory framework, agreements or conventions
that are affecting the operations of Nike in Australia.
Question 1: Identification of multinational company (MNC) chose with a brief
description of the company and key data
Nike was incorporated on 8th of September, 1969 that is involved in designing, development,
marketing and selling of sports footwear, equipment, accessories, apparels and other services.
The company is operating in many countries such as Western Europe, North America, greater
China, central and Eastern Europe, Japan and other emerging markets. The company includes
portfolio brands that are Nike brand, Hurley and converse and Jordan brand. Basically, this
company sells its product through retail stores, internet websites and with the help of other
combined independent distributors and licensees all over the world (Britannica, 2019). The
company gets manufacturing of its product through independent contractors.

And now, from 31st may of 2016, the company has intended to offer its Nike brand in broader
nine categories that are, action sports, running Nike basketball, football (soccer), the Jordon
brand, women's training, men's training, golf and sportswear (the products inspired by lifestyle of
sports). Men's training is offering products that include American football and baseball. The
company is also offering the product in the market that are specially designed for kids and also
other athletics and pleasure uses like lacrosse, volleyball, cricket, walking, tennis, wrestling and
other outdoor activities. The company is specially designing the athletics footwear's that serves
particular or specific athletics. The product of this company is also worn for leisure and casual
purposes. The company is also into dealing and selling sports apparels. Nike is also marketing its
sports apparels in the professional and licensed college team and league logos.
Question 2: Identification of regulatory framework/s affecting the chosen
MNC and discussion of why and how it affects the company
Australian legislative regulatory framework and obligations are very essential to understand in
order to operate the Nike business in Australia. This regulatory framework is designed to ensure
sufficient protection for the foreign or relevant parties, fair competition and to promote integrity
in the market. The Australian government, state and territory government organizations identify
the business for regulatory requirements (Wrona and Trąpczyński, 2012). The international
agreement affects the Australian environment as well as the businesses that are operating there
such as Nike.
Below are some business regulation and regulatory framework of Australia which affect the
business of NIKE.
An export and import law in Australia- Australia is having a strong connection with the rest of
the world. Australia is the major location which provides and supplies them to the entire Asia
Pacific region and majorly helped Nike to distribute its product in that region. The government
of Australia has developed a number of policies to guide and assist the international trades. This
regulation also safeguards the domestic industries, environment from dangerous goods that are
imported from other countries and consumers.

 Free trade agreements- Australia is having six free trade agreements and eight under
negotiation with other countries. Nike has agreement or commitment to soccer by
extending their partnership for another 11 years with football federation Australia. Nike
is continuing to giving the team kit that is updated and innovated with technology (Wrona
and Trąpczyński, 2012). This new deal opens a great opportunity for Nike to expand its
business in Australia by helping the big teams.
 Tariffs and duties- Australia have committed under the world trade organization on
tariff quotas and tariffs, domestic support from agriculture, products and export subsidies.
The goods which are imported in Australia need classification. This restriction is the
hurdle for Nike as declaration procedures are totally dependent on importer self-
assessment and should be declared by Australian border protection service and customs.
 Import regulations- Australia allows businesses to import from other countries that must
be aware by the government regulations, permits, duty taxes, quarantine and other
treatment which are necessary to apply. If the imports are unable to meet these
requirements then these goods got seized by the border protection and Australian
department of immigration which often hinders Nike.
Intellectual property laws of Australia- laws in Australia about the information on trademark
protection, patent protection, design protection, registering a domain protection name and
copyright protection laws. These IP laws are designed by the Australian government to
encourage the protection of business and innovation in order to get a competitive advantage (Le
Meur, et al, 2013). Australia is also having several international agreements which help the
business to protect the IP in other countries also. Nike can protect their IP rights easily in this
country as it has strong laws and regulations.
 Patent protection- the Australian patents presents legal rights in order to stop the third
party from selling, using and manufacturing an invention in Australia. Australia strongly
recommends IP consulting professionals before applying for a patent. And this
recommendations and consultancy help the companies for patents as NIKE has taken.
 Trademark protection- Australia has developed a great legal system to protect the
intellectual property rights of businesses (Le Meur, et al, 2013). Every business can

register its trademark to use it as a marketing tool that provides legal protection to NIKE
so that no other business can use their brand.
 Registering a domain name- domain name refers to the unique address of the internet
site that allows others to use the website, which perfectly allowing the Nike to access
their website.
 Design protection- Australia is having a legislative framework for the registration of a
single design or multiple designs in relation to other products which helps in protecting
the design of Nike.
 Copyright protection- this copyright law is developed in order to encourage and protect
the businesses of Australia that invest their talent and time in the creation of innovative
things or material. In Australia, no specific registration is required as materials are
automatically preserved by the legislative framework of copyright in Australia.
Business and environment laws in Australia- Australia have laws regarding consumer laws,
competition laws, privacy laws, product liability regulation and environmental legislation. This
regulation works to protect the environment, consumers and the community of Australia so that
fair trading and competition can be promoted (Deva and Bilchitz, 2013). This law regulates the
business activities by interacting with the business owners, suppliers whenever the conflict
arises.
 Competition laws- Australia ensures the fair trading of businesses and the consumers
through its national statutory framework which guides Nike to trade fair in the market.
This framework is secured by the ACCC that is Australian competition and consumer
commission. It basically secures consumer protection rights and business rights.
 Consumer laws- the Australian consumer laws provide security from the unfair contracts
that guarantee consumer rights, unsolicited consumer agreements, product safety laws,
lay-by agreements and penalties.
 Product liability regulation- Australia has a national statutory framework that manages
information standards and product safety. And these standards are set to make sure that
harmful products are not being marketed in Australia. They have made product safety
rules which may sometimes create many hurdles for Nike to promote their product in the
market.

 Environmental legislation- the government of Australia had jointly administered
environmental protection with the help of the process of assessment along with the
approval of cultural concerns and national environmental (Deva and Bilchitz, 2013). This
legislation of protection is applied to particular activities of the business that can harm the
environment of Australia.
 Privacy laws- Australia has privacy legislation at the national level that takes care of
how businesses are accessing, collecting, communicating and storing personal
information. It provides security for particular requirements which are sensitive
information such as financial records or medical records. This law helps Nike to protect
its critical and sensitive information in Australia.
Question 3: Identification of treaties, conventions or agreements that have
impacted on the products or services the chosen MNC provides in Australia
Australia involves a variety of the venture types, but in the case of Nike, they had tried to make a
diverse presence in the markets by performing several activities in business legal regulatory
operations. Nike has plans to inspire the youngsters of Victorian Matildas by being the naming
rights partner of the Women's State Knockout Cup (Victoria Football, 2019). At the same time,
the Nike has made a deal with the Toll Group as a partner which has productively diminished the
Nike Australia’s cost per unit significantly and hence give Nike a room to enhance the efficiency
and perform smart operations without compromising service levels (Toll Group, 2019).
While in the meantime for the operations management, sales and promotions tasks. Retail
Prodigy staff is Nike's retail institution associate crosswise over Australia and New Zealand.
Considering the fact that 2011 RPG has worked in a constant joint effort with Nike to convey a
central object delivering to the Australian and New Zealand shopper. Toll group with Nike
started out a long time earlier than RPG was made. Steve and Charlie (fellow benefactors of
RPG) laboured for Nike, paying homage to the '90s, and it was through this expertise the danger
to shape an institution with NIKE became. Retail Prodigy staff consented to a retail
establishment arrangement with NIKE Australia and New Zealand in mid-2011. We endeavour

to be the worldwide benchmark for NIKE by growing exceptional practice retail (Retail Prodigy
Group, 2019).
Nike and Football Federation Australia (FFA) has uncovered that they'd recharged their effective
organization and had gone into a nine-year understanding so that it will see Nike hold on being
the respectable performance companion of the FFA and its countrywide corporations. It's by an
extensive margin the finest sponsorship figuring out marked for soccer in Australia and is Nike-s
greatest ever pledge to any game in Australia. The sponsorship, which speaks to a significant
increment within the estimation of the previous figuring out, covers the 2010 and 2014 FIFA
World Cups, 2007, 2011 and 2015 AFC Asian Cups and the 2007 and 2011 FIFA Women-s
World Cups. Soccer Federation Australia CEO Ben Buckley stated that the dimensions and
length of the organization was an unmistakable pointer of the dimension of aid there may be for
soccer within the corporate phase (Matildas, 2019).

Referencing
1. Australia government, 2018. Understanding Australian business regulations, online
available at https://www.austrade.gov.au/International/Invest/Guide-to-investing/
Running-a-business/Understanding-Australian-business-regulation/Australian-business-
and-environment-laws last accessed on May 1, 2019.
2. Britannica, 2019. Introduction of Nike, online available at
https://www.britannica.com/topic/Nike-Inc last accessed on May 1, 2019.
3. Deva, S. and Bilchitz, D. eds., 2013. Human rights obligations of business: beyond the
corporate responsibility to respect?. Cambridge University Press.
4. https://www.matildas.com.au/news/ffa-and-nike-sign-biggest-ever-partnership
5. Le Meur, P.Y., Horowitz, L.S. and Mennesson, T., 2013. "Horizontal" and "vertical"
diffusion: The cumulative influence of Impact and Benefit Agreements (IBA) on mining
policy-production in New Caledonia. Resources Policy, 38(4), pp.648-656.
6. Matildas, 2019. FFA and NIKE sign biggest ever partnership, online available at
https://www.matildas.com.au/news/ffa-and-nike-sign-biggest-ever-partnership last
accessed on May 1, 2019.
7. Mikolic-Torreira, I., Henry, R., Snyder, D., Beaghley, S., Pettyjohn, S.L., Harting, S.,
Westerman, E., Shlapak, D.A., Bishop, M., Oberholtzer, J. and Skrabala, L., 2016. A
Framework for Exploring Cybersecurity Policy Options. RAND.
8. Retail Prodigy Group, 2019. Authorised Nike Retailer, online available at
https://www.retailprodigygroup.com/authorised-nike-retailer.html last accessed on May
1, 2019.
9. Toll Group, 2019. Toll and Nike - a supply chain partnership, online available at
https://www.tollgroup.com/news-and-media/case-studies/toll-and-nike-supply-chain-
partnership last accessed on May 1, 2019.
10. Victoria Football, 2019. Nike Australia To Inspire Next Generation of Victorian Matildas
as Naming Rights Partner of Women’s State Knockout Cup, online available at
https://www.footballvictoria.com.au/news/nike-australia-inspire-next-generation-
victorian-matildas-naming-rights-partner-womens-state last accessed on May 1, 2019.

11. Wrona, T. and Trąpczyński, P., 2012. Re-explaining international entry modes–
interaction and moderating effects on entry modes of pharmaceutical companies into
transition economies. European Management Journal, 30(4), pp.295-315.