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International Trade Law
by
Imaddin Muhamad
School of Law
Damas University
Chapter One
Introduction to International
Trade Law
Key words
•
International trade, trading market, economic interdependence, sale of goods, carriage, quality,
quantity, insurance, International Business Law, Transactions, International Commercial Law;
International Sales Law; International Economic Law; International Finance Law; goods,
services, technology, profit, commerce, traders, consumers, trade customs, lex mercatoria,
trading arrangements, contracts, trade contract, Commercial Organisations, multi-national
companies, market, product, industry, economic environment, market dominance, economic
communities, free trade, tariffs.
Learning Objectives
By the end of this chapter you will:
1.
Be able to describe the term and meaning of ‘International Trade Law’.
2.
The range of actions and activities which are part of International Trade Law.
3.
The difference between Public and Private International Trade Law.
4.
Be able to explain the history of both Public and Private International Trade Law and
the meaning of General Recognised Principles of Law.
t
5.
Explain the 7 main sources of International Trade Law.
Learning Objectives
6.
Be able to understand the hierarchy which governs the organisation of International
Trade Law.
7.
Be able to explain these structures and how each one affects transactions and trade.
8.
Understand the different International Trade Organisations.
9.
Define the difference between Intergovernmental Organisations (IGOs) and Non-
Government Organisations (NGOs).
10.
Be able to give examples for both IGOs and NGOs by quoting the different
organisations which come under each of these.
Introduction
• The increase of international trade along with the expansion
of information technology is developing a global trading
market along with international economic interdependence.
Introduction
‘International trade law’ concerns a large number of actions
and activities involving: agreement for sale of goods; the terms
of their carriage; quality and quantity; insurance and
intellectual property issues.
Introduction
• International
Business
Law;
International
Business
Transactions; International Commercial Law; International
Sales Law; International Economic Law and International
Finance Law are all terms which can be used interchangeably.
Introduction
• We can divide the whole phrase of ‘International Trade Law’
into parts. For example, in the language of Latin, ‘inter’ means
‘between’; ‘national’ means nations; ‘trade’ means the
exchange of goods, services and technology for profit; and
‘law’ means the regulation of conduct.
Introduction
• So in a simple sense, we can define the term international
trade law as being the regulation of the conduct of parties who
are involved in the exchange of goods, services and
technology between nations.
Public and Private
International Trade Law
• International trade law is commonly described as ‘public’ and ‘private’.
Public international trade law is the regulation of conduct in commerce
between nations. ‘States’ is used to refer to national governments instead
of the word ‘governments’ due to the fact that some governments may
change and the new government may not be recognised internationally.
Public and Private
International Trade Law
• Private international trade law is the regulation of conduct between private
traders in different States. It generally does not involve the trading activities
of individual consumers, for example a tourist who buys souvenirs while on
holiday. However, there is a level of protection. For example, the East-India
Company is the world’s first multinational and it was founded by the Royal
Charter of Queen Elizabeth I in 1600.
Sources of
International Trade Law
• There are 7 main sources of international trade law, and each
has a different level of power. The hierarchy of source law is
as follows:
I. Agreements between States:
II. General Practices between States
III. General Recognised Principles of Law
IV. Previously
Decided
Cases
and
Academic Writings
V. Agreement Between Traders
VI. Domestic Law
VII. Dominant Commercial Organisations
Sources of
International Trade Law
• There are 7 main sources of international trade law, and each
has a different level of power. The hierarchy of source law is
as follows:
I. Agreements between States:
• These
are
conventions,
known
and
as
are
treaties,
the
or
closest
international equivalent to legislation in
domestic legal systems.
Sources of
International Trade Law
• Treaties can be bilateral, meaning agreements between two
States, or multilateral, meaning agreements between many
States. Treaties can impose legal obligations on the parties and
declarations impose moral obligations.
Sources of
International Trade Law
II.
General Practices between States:
•
This includes trade custom, norms which have developed over time and
become standard trading relationships. The body of lex mercatoria is the
general principles of customs among international traders. It developed
from the law merchant, and contains any general aspect of international
trading which has been used, accepted and recognised by traders over a
period of time.
Sources of
International Trade Law
These practices are not fixed, and will depend on the practices between
international traders at a particular time. They also vary from place to place.
As such, it is extremely difficult to see lex mercatoria as a body of law for
international trade, because it is not comprehensive and cannot be universally
applied.
Sources of
International Trade Law
III. General Recognised Principles of Law:
•
These are principles of law recognised throughout national legal systems
around the world. They also consist of the procedures and legal
principles held in common by the civil and common law systems, such as
good faith, pact sunt servanda (that the contract will be enforced
according to its terms), and the obligation to mitigate damages.
Sources of
International Trade Law
Arab traders used the Silk Road (from Shanghai to Egypt) and had their own
trading arrangements, usually based in barter, and this can be considered as
part of lex mercatoria. A major underlying principle in international trade is
good faith. The duty of good faith is basically a duty to act properly and in
good conscience.
Sources of
International Trade Law
IV. Previously Decided Cases and Academic Writings:
•
Previous arbitral awards will be considered by arbitrators,
and previous judicial decisions will be considered by national
courts.
Sources of
International Trade Law
The writings of leading academics is also considered of
some
importance as a form of expert commentary on the state of the
law in a certain area.
Sources of
International Trade Law
V. Agreement Between Traders:
•
This is known as the principle of party autonomy, which
means that traders should be free to make contracts on
their own terms and to decide how disputes between them
should be settled according to what particular law.
Sources of
International Trade Law
VI. Domestic Law:
• In many transactions if a particular issue is not settled by an
international convention, a generally recognised practice or
principle, or by a specific term in a trade contract, then
domestic law is applied.
Sources of
International Trade Law
VII. Dominant Commercial Organisations:
•
Large multi-national companies, who have a significant hold on the
market for a particular product, commodity or service, can greatly
influence how the market operates and under what conditions. The
regulation of an industry can be determined by its main player, and it is
difficult in an economic environment where the aim of businesses is to
maximise profits for those with power not to use and abuse it.
Sources of
International Trade Law
•
An example of market dominance is the sugar industry in Australia. Sugar
is prohibited from being imported, and sugar prices are set by CSR
(Corporate Social Responsibility) in conjunction with the Queensland
government.
International Trade Organisations
• Intergovernmental Organisations (IGOs):
• These organisations are created by two or more States to pursue common
interests as an entity separate from its members. A ‘charter’ is formed,
which states the objectives, functions, and structure of the organisation.
Some examples include the UN and the European Union (EU).
International Trade Organisations
• Other organisational types include economic communities, such as the
Economic Community of West African States (ECOWAS), and free trade
associations, such as the North American Free Trade Association (NAFTA).
These are arrangements where the States involved agree to reduce or
eliminate tariffs amongst themselves but maintain their own external tariffs.
International Trade Organisations
• Non-government Organisations (NGOs):
• These include non-profit and profit organisations. Non-profit
organisations coordinate the interests of private national groups.
Examples include the International Chamber of Commerce (ICC),
the International Bar Association (IBA), the International Maritime
Organisation (IMO) and the International Air Transport Association
(IATA)..
International Trade Organisations
• Profit organisations are transnational corporations (TNCs), which
have subsidiaries and joint ventures in several States.