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International trade law includes the appropriate rules and customs for handling trade between countries. [1] 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 (WTO). [2] 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. [3]
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 and currency regulation, as well as the law of international development. [4]
The international trade law includes rules, regulations and customs governing trade between nations. [5] 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. [6]
The body of rules for transnational trade in the 21st century was derived from medieval commercial laws called the lex mercatoria and lex maritima —respectively, "the law for merchants on land" and "the law for merchants on the sea." [7] Modern trade law (extending beyond bilateral treaties) began shortly after the Second World War, with the negotiation of a multilateral treaty to deal with trade in goods: the General Agreement on Tariffs and Trade (GATT). [8]
International trade law is based on theories of economic liberalism developed in Europe and later the United States from the 18th century onwards. [9]
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.[ citation needed ]
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. [10] Currently, the new Lex Mercatoria has been prepared. [11] 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. [12]
In 1995, the World Trade Organization, a formal international organization to regulate trade, was established.[ citation needed ]
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)
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 Havana. It contains rules relating to "unfair" trading practices—dumping and subsidies. Many things impacted GATT like the Uruguay Round and the North American Free Trade Agreement. [13]
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. [14]
The idea of these agreements (WTO and GATT) was to create an equal field for all countries in trade. [15] 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.[ citation needed ]
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.[ citation needed ]
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, 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.[ citation needed ]
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. [16] 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 [13] ).
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: CS1 maint: numeric names: authors list (link)A free trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and to increase trade of goods and services with each other. If natural persons are also free to move between the countries, in addition to a free trade agreement, it would also be considered an open border. It can be considered the second stage of economic integration.
The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis."
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 govern international trade in cooperation with the United Nations System. The WTO is the world's largest international economic organization, with 166 members representing over 98% of global trade and global GDP.
National treatment is a principle in international law. Utilized in many treaty regimes involving trade and intellectual property, it requires equal treatment of foreigners and locals. Under national treatment, a state that grants particular rights, benefits or privileges to its own citizens must also grant those advantages to the citizens of other states while they are in that country. In the context of international agreements, a state must provide equal treatment to citizens of the other states participating in the agreement. Imported and locally produced goods should be treated equally — at least after the foreign goods have entered the market.
A trade agreement is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other. The most common trade agreements are of the preferential and free trade types, which are concluded in order to reduce tariffs, quotas and other trade restrictions on items traded between the signatories.
This is a list of international trade topics.
The status of permanent normal trade relations (PNTR) is a legal designation in the United States for free trade with a foreign nation. The designation was changed from most favored nation (MFN) to normal trade relations by Section 5003 of the Internal Revenue Service Restructuring and Reform Act of 1998. Permanent was added to normal trade relations some time later.
In international economic relations and international politics, most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment. In effect, a country that has been accorded MFN status may not be treated less advantageously than any other country with MFN status by the promising country.
The Uruguay Round was the 8th round of multilateral trade negotiations (MTN) conducted within the framework of the General Agreement on Tariffs and Trade (GATT), spanning from 1986 to 1993 and embracing 123 countries as "contracting parties". The Round led to the creation of the World Trade Organization, with GATT remaining as an integral part of the WTO agreements. The broad mandate of the Round had been to extend GATT trade rules to areas previously exempted as too difficult to liberalize and increasingly important new areas previously not included. The Round came into effect in 1995 with deadlines ending in 2000 under the administrative direction of the newly created World Trade Organization (WTO).
A free trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occur when two countries agree to loosen trade restrictions between the two of them, generally to expand business opportunities. Multilateral trade agreements are agreements among three or more countries, and are the most difficult to negotiate and agree.
A Trade and Investment Framework Agreement (TIFA) is a trade pact that establishes a framework for expanding trade and resolving outstanding disputes between countries.
In international trade, market access refers to a company's ability to enter a foreign market by selling its goods and services in another country. Market access is not the same as free trade, because market access is normally subject to conditions or requirements, whereas under ideal free trade conditions goods and services can circulate across borders without any barriers to trade. Expanding market access is therefore often a more achievable goal of trade negotiations than achieving free trade.
The International Trade Organization (ITO) was the proposed name for an international institution for the regulation of trade.
Rules of origin are the rules to attribute a country of origin to a product in order to determine its "economic nationality". The need to establish rules of origin stems from the fact that the implementation of trade policy measures, such as tariffs, quotas, trade remedies, in various cases, depends on the country of origin of the product at hand.
Non-violation nullification of benefits (NVNB) claims are a species of dispute settlement in the World Trade Organization arising under World Trade Organization multilateral and bilateral trade agreements. NVNB claims are controversial in that they are widely perceived to promote the social vices of unpredictability and uncertainty in international trade law. Other commentators have described NVNB claims as potentially inserting corporate competition policy into the World Trade Organization Dispute Settlement Understanding (DSU).
In economics, a tariff-rate quota (TRQ) is a two-tiered tariff system that combines import quotas and tariffs to regulate import products.
The spaghetti bowl effect is the multiplication of free trade agreements (FTAs), supplanting multilateral World Trade Organization negotiations as an alternative path toward globalization. The term was first used by Jagdish Bhagwati in 1995 in the paper: “US Trade policy: The infatuation with free trade agreements”, where he openly criticized FTAs as being paradoxically counter-productive in promoting freer and more opened global trades. According to Bhagwati, too many crisscrossing FTAs would allow countries to adopt discriminatory trade policies and reduce the economic benefits of trade.
China became a member of the World Trade Organization (WTO) on 11 December 2001, after the agreement of the Ministerial Conference. The admission was preceded by a lengthy process of negotiations and required significant changes to the Chinese economy. Its membership has been contentious, with substantial economic and political effects on other countries and controversies over the mismatch between the WTO framework and China's economic model. Assessing and enforcing compliance has become issues in China-US trade relations, including how China's noncompliance creates benefits for its own economy.
Afghanistan received membership to the World Trade Organization (WTO) at the 10th WTO Ministerial Conference in Nairobi, Kenya, December 17, 2015. Afghanistan is 164th in the world and 36th among the less-developed countries that have received WTO membership.
The World Trade Organization (WTO) is an intergovernmental organization which regulates international trade. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The WTO deals with regulation of trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which is signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986–1994).