
Changes to government international trade policy can create significant obstacles to conducting cross-border business. Similarly, businesses can be susceptible to protectionist policies and government interference with their foreign investments.
International trade can be impacted by the imposition of tariffs, the adoption of quotas or embargoes, or the suspension of trade relations or trade agreements with other countries. The implications for businesses can be substantial. Prices for inputs and commodities can go up; in certain cases, product availability can be disrupted. It may also become more difficult to provide services to customers overseas. Importantly, trade differences between governments can lead to uncertainty and make it challenging for businesses to plan for the future.
Foreign investments can be at risk, in the most extreme cases, from government expropriation – as has happened, for example, with natural resource concessions. The economic value of investments can also be compromised in less obvious ways through changes to regulation or taxation, revocation of licences and permits, withdrawal of incentives or inability to obtain redress through local courts. The financial and strategic business implications can be substantial. It is important with any investment to ensure that the investment benefits from the protections available under investment treaties specifically designed to promote and protect investments.
Wherever you do business, Clifford Chance can help you put in place a multi-faceted strategy to help navigate these trade and investment risks.