International and World Trade Law

Chapter Fourteen

Internationaland

World Trade Law

Business Organizations for ParalegalsReed and Cheeseman

© 2012 Pearson Higher Education,Upper Saddle River, NJ 07458. • All Rights Reserved.2 29 - 219 - 2

Chapter Fourteen – Objectives

1. Describe the U.S. government’s power under the Foreign commerce Clause and Treaty Clause of the U.S. Constitution.

2. Describe nations’ court jurisdiction over international disputes.

3. Describe the functions and governance of the United Nations.

4. Describe the North American Free Trade Agreement (NAFTA) and other regional economic organizations.

5. Describe the World Trade Organization (WTO) and explain how its dispute resolution procedure works.



International Law

Law that governs affairs between nations. Law that regulates transactions between individuals

and businesses of different countries. No single source of international law. No world court responsible for interpreting all

international law.



The United States and Foreign Affairs

The Constitution gives most of the power over foreign affairs to the federal government. Foreign Commerce Clause Treaty Clause



Foreign Commerce Clause

Article I, Section 8, Clause 3 vests Congress with the power “to regulate commerce with foreign nations.”

Any state or local law that unduly burdens foreign commerce is unconstitutional under the Commerce Clause.



Treaty Clause

Article II, Section 2, clause 2 states that the president “shall have power, by and with the advice and consent of the Senate, to make treaties, provided two-thirds of the senators present concur.”

The president is the agent of the United States in dealing with foreign countries.



Treaty Clause(continued)

Under the Treaty Clause, only the federal government may enter into treaties with foreign nations.

Under the Supremacy Clause of the Constitution: Treaties become part of the “law of the land” Conflicting state or local law is void



Sources of International Law

Those things that international tribunals rely on in deciding international disputes. Treaties and conventions Custom General principles of law Judicial decisions and teachings



Treaties and Conventions

The first source of international law.

They are the equivalents of legislation at the international level.



Treaty

An agreement or contract between two or more nations. Formally signed by an authorized representative. Ratified by the supreme power of each nation.



Convention

Treaty that is sponsored by an international organization.

Treaties and conventions address: Human rights Foreign aid Navigation Commerce Settlement of disputes



Custom

The second source of international law. Custom describes a practice followed by two or more

nations when dealing with each other. It may be found in:

Official government statements. Diplomatic correspondence. Policy statements.



Custom(continued)

Two elements must be established to show that a practice has become a custom:

1. Consistent and recurring action by two or more nations over a considerable period of time.

2. Recognition that the custom is binding because of legal obligation.



General Principles of Law

The third source of international law. Consist of principles of law recognized by civilized

nations. These are principles of law that are common to the

national law of the parties to the dispute.



General Principles of Law(continued)

The general principles of law may be derived from: Constitutions Statutes Regulations Common Law Other Sources of National Law



Judicial Decisions and Teachings

The fourth source of international law. Consist of judicial decisions and teachings of the most

qualified legal scholars of the various nations involved in the dispute.

International courts are not bound by the doctrine of stare decisis.



United Nations

International organization created by multinational treaty in 1945.

Goals of the United Nations (U.N.): Maintain peace and security in the world. Promote economic and social cooperation. Protect human rights.



Governance of the United Nations

The United Nations is governed by: The General Assembly

Composed of all member nations. The legislative body of the U.N. Adopts resolutions which have limited force. Resolutions are usually enforced through

persuasion and sanctions.



Governance of the United Nations(continued)

The Security Council Composed of 15 member nations.

Five are permanent members Ten are chosen for two-year terms

Primarily responsible for maintaining international peace and security.

Has authority to use armed forces.



Governance of the United Nations(continued)

The Secretariat Administers the day-to-day operations of the

United Nations. Headed by the Secretary-General, who is elected by

the General Assembly.



International Court of Justice

The judicial branch of the United Nations.

Also called the World Court.

Located in The Hague, the Netherlands. Only nations may have cases decided by this court.



UN Agencies

The UN is composed of various autonomous agencies. UNESCO UNICEF IMF World Bank IFAD



International Monetary Fund

IMF was established to promote the world economy. Sound monetary, fiscal, and macroeconomic

policies worldwide Provides assistance to needy countries



World Bank

Financed by contribution from developed countries. Provides money to developing countries to fund

projects for humanitarian purposes and relieve poverty.

Bank routinely grants debt relief for these loans.



The European Union

Comprised of many countries of Western Europe. Created to promote:

Peace and security. Economic, social, and cultural development. Open borders for trade. Provide free flow of capital, labor, goods, and

services.



North American Free Trade Agreement

Free-trade zone formed by the United States, Canada, and Mexico.

Eliminates or reduces most of the duties, tariffs, quotas, and other trade barriers between the members.

Forms supernational trading region.



Free Trade Area of the Americas (FTAA)

Possible extension to NAFTA Would include all of the countries of North, Central

and South America, extending from Alaska in the North to Argentina in the South.

Reservations and critics still exist.



Latin, Central, and South American Economic Communities

Central American Common Market MERCOSUR Common Market Caribbean Community Andean Common Market



Asian Economic Communities

Association of South East Asian Nations (ASEAN) Japan and China not members



African Economic Communities

Economic Community of West African States Economic and Customs Union of Central Africa East African Community Organization of African Unity



Middle Eastern Economic Communities

Organization of Petroleum Exporting Countries (OPEC) 11 Oil-producing and exporting countries from

Africa, Asia, the Middle East and South America. Sets quotas on the output of oil production by

member nations. Gulf Corporation Council



World Trade Organization (WTO)

International organization of more than 130 member nations.

Created to promote and enforce trade agreements among member nations.

One of the primary functions of the WTO is to hear and decide trade disputes between member nations.



WTO Dispute Resolution

WTO hears and decides trade disputes between member nations. Three-judge panel issues panel report. Report referred to dispute settlement body of WTO. WTO creates an appellate body composed of seven

professional justices. If violation found, offending nation ordered to stop

and to pay damages.



National Courts Decide International Disputes

The majority of commercial litigation involving international business transactions are heard by national courts. Most disputes are between private parties.



Judicial Procedure

Choice of forum clause – designates the judicial or arbitral forum that hear and decide the case.

Choice of law clause – designates the law to be applied by the court or arbitrator in deciding the case.



Act of State Doctrine

Judges of one country cannot question the validity of an act committed by another country within that other country’s borders.

Based on the principle that a country has absolute authority over what transpires within its own territory.



Doctrine of Sovereign Immunity

Act of a government in a foreign country is not subject to suit in the foreign country.

Some countries provide absolute immunity. Some countries provide limited immunity.

The U.S. provides limited immunity



International Arbitration

A non-judicial method of dispute resolution. A neutral third party decides the case. The parties agree to be bound by the arbitrator’s

decision. Faster, less expensive, less formal, and more private

than litigation.



International Arbitration(continued)

Arbitration Clause A clause contained in many international contracts. Stipulates that any dispute between the parties

concerning the performance of the contract will be submitted to an arbitrator or arbitration panel for resolution.



Law Around the World Jewish Law and the Torah

More in search of truth than it is an adversarial process. Islamic Law and the Koran

Used primarily in the areas of marriage, divorce and inheritance. Limited use in criminal law. Ignored in commercial Law.

Hindu Law and Dharmasastra Does not rest on civil codes nor court decisions, but on the

works of private scholars that were passed along for centuries by oral tradition and eventually smitris (or law books). Concerned with family matters and the law of succession.



Chapter Fourteen - Recap1. Describe the U.S. government’s power under the Foreign

commerce Clause and Treaty Clause of the U.S. Constitution.

2. Describe nations’ court jurisdiction over international disputes.

3. Describe the functions and governance of the United Nations.

4. Describe the North American Free Trade Agreement (NAFTA) and other regional economic organizations.

5. Describe the World Trade Organization (WTO) and explain how its dispute resolution procedure works.

International and World Trade Law

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