Your firm manufactures optic transistors (OT), which are a component of personal computers. U.S. firms control 60
Question:
Your firm manufactures optic transistors (OT), which are a component of personal computers. U.S. firms control 60 percent of the U.S. market for OTs. The market has done well overall, but recently, Japanese manufacturers of computers have increased their market share. Over the past two years, the Japanese have been exporting OTs to the United States in larger quantities. You have noticed that in the past two years your firm's share of the U.S. market for OTs has dropped from more than 25 percent to less than 20 percent. In addition, your firm's total sales have declined, its inventories are at their highest levels, and you have had to postpone hiring new employees. You have been informed by one of your better customers that it can purchase imported OTs for $0.95 each, ex factory, or $1.00, CIF American port. Your U.S. price has been $1.20, FOB your factory, with your costs at $0.90. The same OTs are sold to Japanese computer firms at $1.15. Furthermore, you have learned that the Japanese government assists OT manufacturers by rebating the value-added tax normally assessed on all products manufactured in Japan.
To complicate your problems, you have experienced difficulty cracking export markets. You have noticed that countries in which personal computers are now being assembled, such as Brazil, Korea, and Taiwan, have restricted your firm's imports through a maze of complex regulations. These regulations require that you disclose important manufacturing and design techniques before import licenses will be granted. You are also concerned that your design patents will not be protected there, because Korean patent protection laws are not enforced. Korea has imposed quotas on OTs that make it virtually impossible to export to that market.
What remedies are available to your firm under U.S. law? What factors (economic, political, or other) will affect the outcome of the case? Please be as specific as possible.
International Business Law And Its Environment
ISBN: 9781305972599
10th Edition
Authors: Richard Schaffer, Filiberto Agusti, Lucien J. Dhooge