International trade of goods and services face risks of loss due to political, legal, financial, cultural and natural disasters. Legal changes in law that affect trade are generally are politically motivated. Politicians and government officials may have bias to protect sovereign resources such as mineral rights and ore, manufacturing or any other resource in demand.
Foreign nations often want to extend the opportunity of business to foreign nations for different reasons. Certain resources may not be readily available in one nation and are abundant in another. These supplies and demand also often clash. When a foreign nation wants to enter a national market, say clothing, in America, the government may raise the cost of doing business for foreign suppliers. This can be done with licensing fees, taxes, tariffs, or even by lowering the same expenditures for national business men and women. Of course, there may be treaties that limit the options regulators can take to protect a market. A foreign nation may even strike back in a similar manner acting to aggressively control a different market or retain a stake in a foreign economy.
Every business is responsible for understanding the environment in which it does business. The risks mentioned before, political, legal, financial, cultural and natural disasters, can just as easily be caused by a foreign entity. It is the responsibility of that company to be aware of these different implications and to manage business in a respectable way.
The social implications of one nation should not be conveyed on another. This is very common and moral or at least cultural relativity should be considered a high priority upon transacting and interacting with foreigners, especially if one seeks to gain profits in business. Many companies make the mistake of neglecting these ethical implications and follow absolute or universal ethical guidelines which in many cultures are seen as ignorant, wrong or even evil.
A person must inquire as fully as possible into the cultures which they interact. One must understand the behavior and motivations of the government, businesses and consumers in the economy which they seek to gain from. The social condition of a culture is often religiously motivated, but also circumstantially augmented. This means understanding a religious practice is not enough, but the overall melting pot of each society must be tasted – so to speak. Recent changes in leadership, resources, laws and practices could drastically change the behavior and motivations of a person. Religions also often are sectarian and independently unique by geographic area.
To me this should be the utmost priority of all foreign businesses.