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International sale of goods laws: Australia and China
International sale of goods laws: Australia and China

International sale of goods laws: Australia and China

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  • Pages: 4 (1678 words)
  • Published: October 7, 2018
  • Type: Case Study
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China and Australia are both among the fastest growing economy in the world. Despite their difference of economical origins, both countries have managed to strike its influence in international business immensely. In recent days, both countries have signed a mutual FTA feasibility studies to explore the potential business among them.

Actually, how different are their economics structure[1].Are they moving towards uniformity of international trade laws as suggested by the Vienna Convention? This paper will displayed a brief overview of the countries current economical condition, described their current relationship, and then try to find fundamental differences exist among the two countries Furthermore, this paper will show that the International trade of goods laws between the compared countries: China and Australia are different in nature.This is due to each country evolve from different trading culture. China, for example, in its early years tends to promote a steady commitment in producing a uniform legal rules and regulations globally although later the country shows less commitment in permitting a fair atmosphere of global trading then the Australian. In contrast, Australia was a party at the Vienna Convention, and it is now actively promoting the uniform laws of international trading.

The situation drives the country to encourage international relationships (export and import) since they believe the relationship is important means for the survival of the nation’s economy and the increase in living standards, therefore, a fair export and import law is maintained as an important merit. [1] “A Successfull Global Trader. ” Australia Now, 2003. Http://www. dfat.

gov. au/facts/search. Accessed 22 April 2005 I. Introduction In


this era of globalization, entrepreneurs would no longer give in to national or regional boundaries. Businesses are expanding worldwide causing increasing importance of adequate laws and regulations.Before the times of globalization, laws and regulations were made by each and individual countries.

On Seldom cases of transactions between entrepreneurs of different nationality, the laws and regulations are chosen among the nationality involved. The following decade however, cross-national, cross regional and multinational transaction happens each and every day, posing an inadequacy to the previous method of selecting laws and regulations applied. Considering the frequency of foreign transactions, it is a tremendous waste of time and energy to dispute about the basic rules implied in every transaction practiced.The need of a basic set of rules and regulations which can be implied in every multinational transaction grew from the vast developing idea of globalization. In this situation, the most well known and trustworthy regulations naturally transformed into a swift solution.

The English international trade laws are somewhat the popular solution for the international trade law uniformity problem. A considerable amount of multinational businessmen are using English Laws based contracts to manage their transactions, even if the transactions have no reasonable connections with the United Kingdom.One of the known examples is an Argentinean selling products of Soya bean meal in bulk to a Swiss buyer using US dollar as transactional currency (a transaction has little or no connection to the United Kingdom), applying CIF Antwerp shipping terms for a base of contract agreement[1]. Despite becoming a trend, the solution still does not provide a legal

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and strong set of order to bind the world into a single trading place. To achieve the purpose, an international convention must be made.The United Nations Commission on International Trade (UNCITRAL) is a strong international gathering dedicated to pursue uniformed trade laws.

In 1980’s The Vienna Convention was held. The United States and most of the European countries attended it. Contracts for the International Sale of Goods (CIGS) are the product assembled by the convention. The product is considered to be one of the most ambitious efforts to create a world legal order in international trade transaction. The convention takes 12 years in preparation and the product (CIGS) is still actively worldwide promoted by nations present at the convention[2].It is said however, that despite its proven achievement of being an effective international trade instrument, the CIGS should not be applied with the basic assumption that all transactions are alike.

A single uniform law should not be applied with a “one size fits all basis”[3]. Studies on whether the appropriate treatment has been applied by the Vienna Convention to the variety of international sales transactions is being made; reflecting a certain amount of doubt existed towards the CISG. The campaign of making uniform international sale of goods laws has yet to meet its success.Natural differences of various transactions are still a field too vast to be united in a single treaty. We will have a clearer view as we analyze the differences between 2 countries contrasted by economical conditions, culture and mostly basic law foundation.

II. The Countries’ Economical Backgrounds and Laws The International trade laws and regulations assembled by a country emerged from various national backgrounds. Countries possessing different geographical structure for example, would produce different export commodities, thus results a different ‘tone’ of trade laws.Other factors such as the culture of citizens and national politic tendencies have also significant contributions in making a country’s international trade laws. II. 1.

Australia Australia is a multicultural country with migrants coming from 200 countries. It is an English speaking country with 20 million population and 4. 1 million of them speak a second language. It has approximately 10 million highly trained workforce including diploma and university graduates. Its underlying economic health describes an increased achievement as follows: O  Reduction of Government Debt pf $66. 6 billion since 1996O  Controlled inflation between 2 and 3 percent since 1991 O  The IMF has forecasted Australia to have 3.

5 percent growth for 2004 O  Government’s financial outline describe a financial surplus since 1998 O  Productivity experienced an immense growth[4] Australian export reached A$ 151 billion in 2002. Its highest export destinations are Japan (A$ 22. 1 billion), United States (A$ 11. 5 billion), and Korea (A$ 10 billion) (“Export, growth and technology” 2003). Its export of international services totalled over $ 10 billion during 2003[5]. II.

1. 1. Australia’s Current Cross-Border Trade Activities.Multinational transactions or cross border transactions always involved legal risks. Australia has been trying to reduce legal risks suffered by its firms, trough cross border transactions.

Currently, Australian firms have dealt with the issue by four ways: O  By transferring the risk

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