Legal Aspects of International Business
Updates and Errata

Legal Aspects of International Business


A Note to Readers:
The following updates have already been made to the eBook versions of this text, and so these changes apply specifically to the printed edition. All changes will be reflected in the next printing.
  Please also note that the title of chapter 3 has changed from “NAFTA” to: “The Canada-USA-Mexico Trade Agreement (CUSMA).” The updated eBook chapter continues to discuss relevant details of NAFTA as well as CUSMA, and the transition between them.

Chapter 1: International Organizations and International Law

P3 para 3, replace words as noted:
This chapter introduces the concept of international law and describes the two traditionally
recognized branches of this discipline—public international law and private international law, with emphasis on the latter’s former’s sources and enforcement.
P13 para 2:      
Most treaties, once ratified before being ratified, will require the signing country to pass implementing legislation to make the international treaty enforceable at a nation level. 
P23 para 1 (Updated Judgment Extracts) Revised Text:
The Court of Appeal permitted the action to proceed to trial. However, Nevsun sought and was granted leave to appeal to the Supreme Court of Canada (SCC). The SCC heard the case in January 2019 and decided, among other issues, for the first time that the Canadian common law should recognize a cause of action for damages based on alleged breaches of CIL norms.
Extracts from the Judgment
[[1] This appeal involves the application of modern international human rights law, the phoenix that rose from the ashes of World War II and declared global war on human rights abuses. Its mandate was to prevent breaches of internationally accepted norms. Those norms were not meant to be theoretical aspirations or legal luxuries, but moral imperatives and legal necessities. Conduct that undermined the norms was to be identified and addressed.
[2] The process of identifying and responsively addressing breaches of international human rights law involves a variety of actors. Among them are courts, which can be asked to determine and develop the law’s scope in a particular case. This is one of those cases.
[71] Since “[i]nternational law not only percolates down from the international to the domestic sphere, but . . . also bubbles up”, there is no reason for Canadian courts to be shy about implementing and advancing international law…
[72] Understanding and embracing our role in implementing and advancing customary international law allows Canadian courts to meaningfully contribute, as we already assertively have, to the “choir” of domestic court judgments around the world shaping the “substance of international law” …
[74] Customary international law has been described as “the oldest and original source of international law”... It is the common law of the international legal system — constantly and incrementally evolving based on changing practice and acceptance. As a result, it sometimes presents a challenge for definitional precision.
[120] In the domestic context, the general principle that “where there is a right, there must be a remedy for its violation” has been recognized in numerous decisions of this Court…
[121] The right to a remedy in the context of allegations of human rights violations was discussed by this Court in Kazemi, where a Canadian woman’s estate sought damages against the Islamic Republic of Iran for torture. The majority did not depart from the position in Hape that customary international law, including peremptory norms, are part of Canadian common law, absent express legislation to the contrary.

P23, right column: Replace the following two “Critical Analysis Questions”:

Question #2
Replace with: What are the possible ramifications for companies now that a new, private cause of action for breaches of norms of customary international law became part of the Canadian common law?
Question #9
Replace with: Access the Supreme Court of Canada website and review its Nevsun decision. What are the main takeaways from the majority’s and dissenting reasons?
List of Cases:
Remove: Araya v Nevsun Resources Ltd, 2017 BCCA 401
Replace with: Nevsun Resources Ltd. v. Araya, 2020 SCC 5

Chapter 2: The World Trade Organization

P32, para 2:
Since GATT 1947 is part of GATT 1994, and GATT 1994 is an integral part of the WTO, a familiarity with the philosophy and provisions of the GATT 1994 1947 is fundamental to understanding the regulation of modern international trade.
P32, middle of page; change section heading to:
                  The Fundamental Rules of GATT 1994 GATT/WTO
P32, bottom of page; change subheading to:
Article II of GATT 1994 – Tariffs and the Binding Concessions Rule
P33, first three paragraphs:

            Change all four references to GATT 1947 to GATT
P33, para 4, revise as:
The tariff concessions made by each member state are found in the schedules annexed to the
GATT 1994.
Pp34-35, change references to GATT 1994 to GATT
P35, middle, remove “or service”:
The national treatment rule of Article III of GATT requires that once a good or service is legally
present in a country,
P36, under “Additional GATT Rules”:
Articles, I, II, III and XI of GATT are intended…
P36, bottom of page, change subheading:
Rules on Dumping, Subsidies, and Contingencies Safeguards
P40, bottom of page, replace with:
In other words, WTO member states are allowed to deviate from their obligations in Article I, II, III, and XI of GATT and other WTO agreements as long as the regulations, laws, or other measures implemented with respect to the 10 policy concerns listed in Article XX are not disguised restrictions to trade, are justifiable, and do not evidence arbitrary discrimination between countries in similar conditions.
P42, first para, now revised as follows:
In response to the first Shrimp – Sea Turtle decision, the United States changed its guidelines
to allow countries that did not use the US designed TEDs to apply for certification.
P44, Box 2.5, change right column as follows:
In order to rely on exceptions to the GATT under SPS Agreement, member states must rely on sound scientific principles and provide evidence of such.
P44, middle of page: Change from:
The Technical Barriers to Trade (TBT) Agreement was negotiated in the Uruguay Round to ensure that domestic technical regulations and product standards did not interfere substantially with international trade.
P45, Box 2.6
The Codex Stan 94 was a relevant international standard that was not used as the basis for the EC regulation. It would not have been ineffective or inappropriate It would have been effective and appropriate for the EC to use the Codex Stan 94 requirements in meeting its legitimate objective in ensuring market transparency, consumer protection, and fair competition in labelling consumer products.
P45, bottom to P46: Replace with the following:
Regional Trade Agreements
Regional trade agreements (RTAs) are separate agreements between states that are meant to promote freer trade or grant trade preferences with respect to goods and services. A free trade area is an arrangement whereby two or more countries agree to remove, substantially, all duties for tariffs and other barriers applicable to other countries. A customs union is similar in that, substantially, all duties and restrictions on commerce among the participating countries are removed, but members agree to adopt a common tariff that applies to all goods imported from other countries (a common external tariff). Free trade areas and customs uions are types of RTAs. Thus, each of these arrangements derogates from the MFN principle insofar as their very essence is preferential treatment among members. The GATT (and subsequently the WTO) adopts the approach that such agreements are acceptable provided they are entirely trade creating—that is, they facilitate trade among members and do not raise any new barriers for trade with non-members.
When members decide to form an RTA, they must advise the WTO membership and provide a draft of their agreement to the Committee on Regional Trade Agreements, which will assess the compatibility of such RTA with the requirements of Article XXIV of the GATT. There are currently 467 regional and multilateral trade agreements in force outside of the WTO and numerous others still in negotiations.21
P54, para 4, replace with:
The rise of worldwide protectionist measures, in particular from the United States, is also calling the WTO’s legitimacy into question. Former President Trump’s administration had threatened to leave the WTO, had suggested an unwillingness to comply with WTO rulings, and had prevented efforts to staff four vacancies at the Appellate Body. As of 2021, President Biden also refuses to appoint new members to the Appellate Body. Seven judges normally sit on the Appellate Body, but as of January 2019, the bare minimum of three members hear appeals. This threatens to paralyze the dispute-settlement system at a time when numerous dispute-settlement proceedings have been initiated.
Chapter 3: The North American Free Trade Agreement (NAFTA) The Canada-USA-Mexico Trade Agreement (CUSMA)

P61, change chapter title to:  
The Canada-United States-Mexico Agreement (CUSMA) 
Remove NAFTA in Learning Objectives and Chapter Outline and replace with CUSMA in all instances except where referring to NAFTA historically, e.g.
  • the historical background leading to the conclusion of NAFTA and later CUSMA
P62, para 1, revise as follows:
The formation of an agreement among nations that provides better terms for members than for non-members is a derogation of from the most-favoured-nation (MFN) principle.
Same para:
            The primary principle behind GATT’s Article XXVI XXIV, which allows…
P63, Figure 3.1, change label on right side to read:
Multilateral NAFTA/CUSMA Trading Arrangement
P63, first para, replace last sentence with:
Since the deal has only recently been ratified, and its full implementation will not be immediate, the sections below discuss NAFTA and highlight how CUSMA differs from it.
P63, bottom, new heading:
                        The Relationship Between NAFTA, CUSMA, and the GATT
P90, Chapter Summary, first paragraph revision:
In this chapter, we discussed:
Historical background leading to the conclusion of NAFTA and later CUSMA.
• NAFTA came into force in 1994 in response to growing competition abroad and created the largest free trade area in the world at the time.
• CUSMA has been ratified by all three member countries, but is not a complete overhaul of the NAFTA.

Chapter 4: The European Union and Other Regional Trade Agreements

P99, bottom:
Membership of the EU
From its original six members, the E.U. has expanded to 28 27. The population of the E.U. now
exceeds 500 440 million people.
P100, near bottom:
The responsibility to develop a common foreign and security policy and to coordinate cooperation between the national courts and police forces in criminal matters relates to areas in which member states have not relinquished their national powers but are simply working together. (the second and third pillars shown in Table 4.1).
P104, para 2:
Change “500 million” to “440 million”
Middle of page:
The E.U. Commission negotiated CETA, with oversight from the E.U. Parliament and the Council, on behalf of its then 28 member states.
P107, para 5:
                  As such, CETA (like NAFTA) includes a separate….
P108, para 6:
All member states have signed the agreement, allowing it to be provisionally applied and, as at the time of writing, 13 15 members have completed the ratification process, leaving 15 12 who still need to do so
P118, middle of page; replace bottom half of page with the following:
What Is Brexit?
In 2016, by way of a referendum, the United Kingdom voted to leave the E.U. After the U.K. triggered
Article 50 of the Lisbon Treaty, which sets out how an E.U. country may voluntarily leave
the union, the European Commission and the U.K. started the arduous task of negotiating how to
undo decades of integration. In October 2019, the E.U. and the U.K. approved a revised withdrawal
agreement and a political declaration on future E.U. – U.K. relations. The Withdrawal Agreement
was limited in scope, covering only a 12-month transition period during which the U.K. and the
E.U. negotiated a new trade relationship, how much money the U.K. owes the E.U. for leaving,
and what happens to U.K. citizens living in the E.U. and E.U. citizens living in the U.K. It also set
out a method of avoiding the return of a physical Northern Ireland border. The U.K. Parliament
ratified the Withdrawal Agreement. The transition period allowed the U.K. and the E.U. to renegotiate thousands of regulations that govern trade, investment, security, immigration, and other matters that were embedded in the E.U. framework. During the transition period, all E.U. laws applied, which allowed businesses and governments to adjust to the legislative, economic, and social changes that Brexit brought.

On December 24, 2020, the U.K. and the E.U. reached a deal. The Trade and Cooperation Agreement lays the foundation for the new relationship between the E.U. and the U.K. The deal makes substantial changes for how the U.K. and E.U. interact in many spheres, including trade, education, travel, and security. Some of the changes include:
  • Reintroduction of border checks, and customs declarations, although no new tariffs,
  • U.K. citizens require a visa for staying in the E.U. longer than 90 days in 180 days period,
  • it costs more money for British residents traveling in the E.U. to use a cell phone since the ban on roaming charges no longer applies,
  • The U.K. students are unable to participate in the popular Erasmus exchange program that heavily subsidizes study abroad.
P119, top of page; replace first four paragraphs with the following:
                  Business Implications of Brexit
There are over 80,000 pages of agreements between the E.U. and the U.K. Untangling and renegotiating these agreements is a costly and uncertain process that affects businesses in countless ways. The Trade and Cooperation Agreement is limited in scope. There are many areas yet to be addressed, such as trade in services, data protection, foreign policy, external security, and defense.
This section highlights some business implications of Brexit. Business thrives when the legislative framework is favourable and stable. Companies are still adjusting to the new and sometimes incomplete rules.  They remain unsure what Brexit means for market access, the availability of migrant labour, and product regulations. This uncertainty has caused a reduction in investment and employment growth because businesses are reluctant to expand.77
Almost half of all the U.K.’s overseas investment comes from the E.U., as does a similar proportion of its export revenues. Brexit invariably affects both the long- and short-term business
and investment decisions of UK-based foreign companies. Many companies, such as Panasonic,
Honda, Discovery Channel, Sony, and others, planned to move their European headquarters from the U.K. to mainland Europe to minimize the potential disruption Brexit may cause to their operations
in the EU.79
The U.K. no longer benefits from the single market and has to renegotiate new trade and investment agreements. The U.K. wishing to continue trading on a preferential basis with countries like Japan, and Chile, must negotiate their own free trade agreements with these partners. For example, The Canada-United Kingdom Trade Continuity Agreement entered into force on April 1, 2021. This agreement ensures preferential market access between the two countries and stabilizes the trading regime for businesses. The new deal contains the main benefits of CETA, including the elimination of tariffs on 98% of Canadian products exported to the U.K.  The U.K. and Canada will likely engage in negotiations for a more comprehensive deal in the future.
The short-term negative economic costs of Brexit are apparent.  The full, long-term repercussions of Brexit remain to be seen.
P120, para 2:
                  Canada has 15 free trade agreements in force as of July 2019 June 2021.
Page 121, Updated Table 4.2:


P124, para 2:
On May 30, 2019, the AfCFTA entered into force for the 24 out of 54 African countries that
had ratified the free trade agreement, and trading under the terms of the treaty will start on
July 1, 2020.89   the treaty terms started on January 1, 2021.

Chapter 5: Canada’s Response to Global Rules: Domestic Rules for Imports and Exports

On pages 133, 136, 138, and148:

                   Change NAFTA to CUSMA

Page 149: Updated Table 5.1 (Changes made: Remove references to NAFTA; change MT to MXT; delete MUST row; insert new UKT row between UAT & UST)


Part II: Private International Law

Chapter 6: Negotiation of International Contracts (Part 1): Pre-Contractual Instruments and Sale of Goods Contracts

Pp187-188: Some of the Incoterms appearing on pages 187-188 have changed: P169, second last para:
As of 2019 2021, some 90 94 countries have ratified adopted the CISG. These states are referred to as “contracting states,” and the CISG is becoming an international standard for international sales contracts. See Box 6.2 for a list of contracting states. Note the absences of the UK and India, the only major trading nations that have not adopted the CISG.
P170, Box 6.2:
  • Change 2019 to 2021
  • Add the following countries to the box:
Democratic People’s Republic of Korea (North Korea)
Chapter 7: Negotiation of International Contracts (Part 2): Contract Challenges and Risk Management


Chapter 8: Intellectual Property and International Business

P241, para 2
Fixed typo:  “…employment law statutes relating to employee contracts…”
P244, Box 8.3, last para in box:
On January 17, 2012,’s patent was issued.
P258, middle of page; replace first bullet point with this:
  • The basic term of copyright protection in Canada is 50 years, but effective the end of 2022 will be the creator's life plus 70 years.  The new duration aligns Canada’s term of protection with the US and the EU, reflecting Canada’s international commitments under Canada-United States-Mexico Agreement and Canada-European Union Comprehensive Economic and Trade Agreement.
P265, first line:
It has been judicially suggested that the limit would be in line with the terms of Canadian copyright: 50 70 years following the death of the individual.

Chapter 9: Legal Aspects of Different Foreign Market Strategies

P296, last para, replace with:
With the principal purpose of protecting the investments of capital-exporting nations, these have been the model for the investor–state protection provisions in NAFTA succeeded by the Canada–United States–Mexico Agreement, or CUSMA and are the foundation of most negotiations on investor-state protection.
P297, last para
Some agreements, notably NAFTA, require that the investment and the investor be granted…
P298, first para
This is in contrast to NAFTA CUSMA, which prohibits specific performance requirements for
both goods and services.
Chapter 10: Settlement of Private International Business Disputes