Outsourcing as a Threat to National Security

We all know that business alliances are based on trust, and the trust is backed up by contractual obligation. Thus, if one partner takes advantage of the other and violates its trust, the aggrieved partner has legal recourse to make it whole. The problem with international alliances is that the same legal recourse may not be available.

Fuji-Xerox, for example, is likely to be covered. If either party sues the other in either the U.S. or Japan, then the losing party likely does enough business in that country to be legitimately hurt by the lawsuit (i.e., the judgment would be collectible).

That probably is not true of alliances between small companies. Even if a small international company is sued successfully in the U.S. by an American company, there is a chance that the American company will never be able to collect the judgment. Thus, the company may be hurt (e.g., have its intellectual property stolen) without any recourse.

And, of course, not all U.S. companies may be able to sue their alliance partners in the U.S., especially if the contract and activity all occurred in the partner's home country. Then the American company would be subject to that country's laws, which may not afford the same protection.

Random thought: The city-driving tax would not be legal in Minneapolis for the same reason the red light cameras got shot down by the courts.