A common example of globalization is found in tax laws. All citizens residing in the same country can file their own taxes with respect to income derived in Canada and the United States. Each taxpayer is assigned with an accruing amount of tax credits based on residence. Those credits are then multiplied by the tax rate for each country. This results in the creation of a “taxpayer’s dollar”, which then circulates through each jurisdiction and is ultimately invested in a designated international tax haven.
These are just a few of the international tax havens used by multinational companies. Other examples include setting up a holding company in a Swiss bank. Individuals regularly move money between offshore accounts and make purchases in the United States, Europe, and Asia. All of this has made international tax banking easier than ever.
Another legal globalization example is that of intellectual property licensing. One of the biggest trends in business today is the formation of licensing agreements between two or more corporations. Such licensing agreements allow the corporations to engage in research and development activities that will result in the creation of new products or technologies. The products and technologies are then released to the public for them to purchase. Such licensing activities are known as patenting.
Another example of globalization can be found in outsourcing. This involves the hiring of trained employees from overseas to take advantage of cheap labor in different locations of the world. This allows companies to reap the benefits of expertise that is not located within their own domestic market. In the past, some businesses would instead purchase the services of foreign workers at less cost, and then provide them on an on-site basis. However, outsourcing has taken the concept to the next level, and now multinational corporations will hire individuals, sometimes numbering in the tens of thousands, from overseas to take on a variety of jobs that are needed within their company.
One of the most important features of outsourcing is its legal justification. Many international agreements attempt to restrict the practices of outsourcing, yet they do not mention any laws that would impose limitations on such behavior. Because of this, outsourcing practices are often implemented with little regard for local social and economic norms. For instance, while there are some laws that prohibit corporations from taking advantage of national governments for the benefit of their own products and profits, there have been no attempts to impose similar laws against the globalization example set forth above.
For this reason, outsourcing is considered by many to be one of the most important legal globalization examples. A large portion of international trade happens to be governed by contract law, a body of law that is primarily concerned with ensuring that contracts between parties are mutually beneficial and do not damage the rights of one party to the other. While this sounds like a rather general description of the practice of outsourcing, it has far-reaching ramifications. For instance, one country could take the view that its citizens have the right to work for another even if doing so would damage its own economy. The practice could be used to challenge the ownership of property, the right to inheritance and more.
The potential for abuse is also a serious concern. In particular, some groups of people living in countries where they may have strong ties, such as college students, might come under attack for engaging in what is seen as unprofessional conduct by engaging in what is seen as a business-to-business transaction. Such practices could also be used to discriminate against people on the basis of their race, gender or religion. While each of these problems is unique, the solutions to them are certainly possible given the increasing role that legal globalization plays. Legal globalization will continue to play an important role as the legal landscape continues to evolve and moves closer to equality.
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