Nations wouldn't be able to decide because the treaty stipulates what a business has to do to acquire a license. It doesn't leave that up to the nation to decide. So that's still the treaty deciding what is and isn't legal. However if the license isn't about legality and just about awarding privilege, a Nation has the choice of not dealing with business that don't have a license, so they can still block out those businesses if they want to.
This will be like the third time I've explained that. No one is saying we shouldn't have a license. But if you make it so that the business is illegal without a license everywhere, that you you(the treaty) deciding for other nations who they should and shouldn't do business with. That's bad from an IC stand point, and even worse from an OOC stand point because now the treaty is infringing on
FM rights. This would involve control over technology base. Being able to decide what technology is there and if those companies are illegal or not.
This treaty as it is does nothing for 'protection' it's just a punishment for people who don't jump through specific hoops. It's extra details that serve no purpose in an OOC perspective but causes more limitations for IC. That is not by any means a 'good' ruling.
So again, if we make the license a privileged system, rather than a punishment system, and then leave it upto nations to decide how they will interact with unlicensed companies, we get the protection, without having to force players through hoops.
And for the record that are many other kinds of unlicensed businesses all around the world. You're looking at it from a Hollywood perspective. The little girl selling lemonade down the street is an unlicensed business. Not every unlicensed business is cracked down on, and not every nation in the real world makes unlicensed businesses illegal. You have to open your mind and not just look at what's right in front of you.