Generally, expropriation and exportation of jobs to foreign countries comprise imperative issues that impose undesirable effects on the American company. Expropriation, which involves the seizure of privately owned assets by the government under a declaration of autonomous authority, affects American investments negatively. On the other hand, employee migration also affects the United States negatively due to its compounding implications on employment. Due to the nature of their impacts, such particular acts are perceived as hazardous to operations especially for American countries seeking to expand or invest in developing nations.
Direct expropriation comprises a situation in which a country applies its sovereignty concerning an investment project either individually or as part of an extensive nationalization scheme. An illustration of a recent direct expropriation constitutes the transfer of assets from the International Petroleum Company (IPC), a United States private entity, by the Government of Peru. In 1968, the Peruvian government acquired the assets of IPC after a change in power due to the impact of a military coup. In addition to this, the Peruvian government refused to pay any compensation to U. S. investors affected by the act. The seizure of the firm’s assets affected the business due to its depriving effect on the investors. Hence, in order to address the situation, the American government, through the Hickenlooper Amendment, sought to end foreign aid programs. However, the plan was unsuccessful due to the effect it imposed on foreign relations with other South American nations such as Chile.
Another form of expropriation, indirect expropriation, involves interfering with an investor’s property rights to the point that such privileges are useless. An example of this form of expropriation involves creeping. The case between Central European Media (CME)/ Ronald Steven Lauder and the Czech Republic illustrates this act. In 1993, Lauder, a U.S. citizen, invested considerably in TV Nova, a Czech private broadcaster through his firm, Central European Media. However, after deciding to attract investments, the Czech Republic closed several bilateral investment agreements among them being the treaty with the United States. By doing, the state undermined contractual agreements, which affected Lauder negatively. After filing for a compensation suit via arbitration, the London Tribunal declared that the Czech Republic violated the treaty but denied all claims of compensation for the affected.
The exportation of jobs to foreign countries is also another issue affecting America presently. The force of globalization has facilitated the migration of American employees to other nations, which cater to their demands significantly. However, this movement in labor possesses a considerable effect on the present employment rate. For instance, high skilled employees are capable of migrating to other foreign companies due to their proficiency. Because of this, the transfer of workers may actually augment the unemployment rate. In addition to this, international labor movement is also capable of decreasing the efficiency of production in America due to significant shift of skilled employees to other foreign markets. Hence, based on the impact caused by job exportation, businesses should not receive tax breaks. In view of this trend, a business owner should ensure that he or she caters to the needs of the employees since it is a moral and ethical duty to fulfill.
To this end, expropriation and job exportation pose significant effects on the American country. This is because they affect investment and production efficiency in the American economy. However, incidences of direct and indirect expropriation have experienced a considerable decrease, especially after the end of World War II. Nonetheless, in combination with employee migration, both forces will continue to elicit dampening impacts on America’s economy if they do not undergo credible and rational resolutions.