International trade law
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International trade law includes the appropriate rules and customs for handling trade between countries. However, it is also used in legal writings as trade between private sectors. This branch of law is now an independent field of study as most governments have become part of the world trade, as members of the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...
(WTO). Since the transaction between private sectors of different countries is an important part of the WTO activities, this latter branch of law is now part of the academic works and is under study in many universities across the world.


Overview

International trade law should be distinguished from the broader field of international economic law. The latter could be said to encompass not only WTO law, but also law governing the international
monetary system A monetary system is a system where a government manages money in a country's economy. Modern monetary systems usually consist of the national treasury, the mint, the central banks and commercial banks. Commodity money system A commodity mon ...
and
currency A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a ''system of money'' in common use within a specific envi ...
regulation, as well as the law of
international development International development or global development is a broad concept denoting the idea that societies and countries have differing levels of economic development, economic or human development (economics), human development on an international sca ...
. The international trade law includes rules, regulations and customs governing trade between nations. International trade law is the tool used by the nation’s government for taking corrective actions against trade. International trade law focuses on applying domestic rules to international trade rules and applying treaty-based international trade law governing trade. The body of rules for transnational trade in the 21st century was derived from medieval commercial laws called the ''
lex mercatoria (from Latin language, Latin for "merchant law"), often referred to as "the Law Merchant" in English, is the body of commercial law used by merchants throughout Europe during the Middle Ages, medieval period. It evolved similar to English common ...
'' and ''
lex maritima Lex or LEX may refer to: Computing * Amazon Lex, a service for building conversational interfaces into any application using voice and text * LEX (cipher), a stream cipher based on the round transformation of AES * Lex (software), a computer prog ...
''—respectively, "the law for merchants on land" and "the law for merchants on the sea." Modern trade law (extending beyond bilateral treaties) began shortly after the
Second World War World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
, with the negotiation of a multilateral treaty to deal with trade in goods: the General Agreement on Tariffs and Trade (GATT). International trade law is based on theories of economic liberalism developed in
Europe Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...
and later the
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from the 18th century onwards. International Trade Law is an aggregate of legal rules of "international legislation" and new lex mercatoria, regulating relations in international trade. "International legislation" – international treaties and acts of international intergovernmental organizations regulating relations in international trade. lex mercatoria – "the law for merchants on land". Alok Narayan defines "lex mercatoria" as "any law relating to businesses" which was criticised by Professor Julius Stone. and lex maritime – "the law for merchants on sea. Alok in his recent article criticised this definition to be "too narrow" and "merely-creative". Professor Dodd and Professor Malcolm Shaw of Leeds University supported this proposition. The Lex Mercatoria is the grouping of legal rules that guide and underlie international trade, which acts totally independently of the positive law of states, being considered normative. Currently, the new Lex Mercatoria has been prepared. The former Lex Mercatoria was generated in light of the characteristic demands of the time in question, including the values, culture, and future provisions of the time, whereas, the new one is recognized as having the responsibility of common international trade law.


World Trade Organization

In 1995, the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...
, a formal international organization to regulate trade, was established. The purposes and structure of the organization are governed by the ''Agreement Establishing The World Trade Organization'', also known as the " Marrakesh Agreement". It does not specify the actual rules that govern international trade in specific areas. These are found in separate treaties, annexed to the Marrakesh Agreement. The scope of WTO: (a) provide a framework for administration and implementation of agreements; (b) forum for further negotiations; (c) trade policy review mechanism; and (d) promote greater coherence among members economics policies Principles of the WTO: (a) A principle of non-discrimination (most-favored-nation treatment obligation and the national treatment obligation) (b) market access (reduction of tariff and non-tariff barriers to trade) (c) balancing trade liberalization and other societal interests (d) harmonization of national regulation (TRIPS agreement, TBT agreement, SPS agreement)


Trade in goods

The General Agreement on Tariffs and Trade(GATT) has been the backbone of international trade law since 1948 after the charter for international trade had been agreed upon in
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subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...
. Many things impacted GATT like the Uruguay Round and the North American Free Trade Agreement. In 1994 the World Trade Organization (WTO) was established to take the place of the GATT. This is because the GATT was meant to be a temporary fix to trade issues, and the founders hoped for something more concrete. It took many years for this to come about, however, because of the lack of money. The British Economy was in crisis and there was not much backing from Congress to pass the new agreement. The idea of these agreements (WTO and GATT) was to create an equal field for all countries in trade. This way all countries got something of equal value out of the trade. This was a difficult thing to do since every country has a different economy size. This led to the Trade Expansion act of 1962.


Principles of International Trade Laws

* National Treatment Principle: Imported and locally-produced goods should be treated equally—at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents. These principles apply to trade in goods, trade in services as well as trade related aspects of intellectual property rights. * Most Favored Nation (MFN) Principle: The MFN principles ensures that every time a WTO Member lowers a trade barrier or opens up a market, it has to do so for the like goods or services from all WTO Members, without regard of the Members’ economic size or level of development. The MFN principle requires to accord to all WTO Members any advantage given to any other country. A WTO Member could give an advantage to other WTO Members, without having to accord advantage to non- Members but only WTO Members benefit from the most favorable treatment.


Trade and intellectual property

The World Trade Organization Trade-Related Aspects of Intellectual Property Rights ( TRIPS) agreement required signatory nations to raise intellectual property rights (also known as intellectual monopoly privileges). This arguably has had a negative impact on access to essential medicines in some nations such as less developed countries, as the local economy is not as capable of producing more technical products such as pharmaceuticals.


Cross-border transactions

Cross-border operations are subject to taxation by more than one country. Commercial activity that occurs among several jurisdictions or countries is called a cross-border transaction. Those involved in any international business development or international trade should be knowledgeable in
tax law Tax law or revenue law is an area of legal study in which public or sanctioned authorities, such as federal, state and municipal governments (as in the case of the US) use a body of rules and procedures (laws) to assess and collect taxes in a ...
, as every country enforces different laws on foreign businesses. International tax planning ensures that cross-border businesses stay tax compliant and avoid or lessen
double taxation Double taxation is the levying of tax by two or more jurisdictions on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes). Double liability may be mitigated ...
.


Dispute settlement

Most prominent in the area of dispute settlement in international trade law is the WTO dispute settlement system. The WTO dispute settlement body is operational since 1995 and has been very active since then with 369 cases in the time between 1 January 1995 and 1 December 2007. Nearly a quarter of disputes reached an amicable solution, in other cases the parties to the dispute resorted to adjudication. The WTO dispute settlement body has exclusive and compulsory jurisdiction over disputes on WTO law (Article 23.1 Dispute Settlement Understanding).


See also

*
Case law Case law, also used interchangeably with common law, is a law that is based on precedents, that is the judicial decisions from previous cases, rather than law based on constitutions, statutes, or regulations. Case law uses the detailed facts of ...
*
International trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (See: World economy.) In most countries, such trade represents a significan ...
*
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...


Notes


References

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External links


International Bar AssociationInternational Trade Center – a UN organization

Trade Law Centre for Southern AfricaWorld Trade Institute – at the University of Berne
{{DEFAULTSORT:International Trade Law Commercial policy Trade law International trade