International law unit 6 economic law
1 / 31

International Law: Unit 6 Economic Law - PowerPoint PPT Presentation

  • Uploaded on

International Law: Unit 6 Economic Law. Prof. Fred Morrison Fall 2006. Topics for this week. International Trade Law Protection of Investments International Financial Law. International Trade Law. Three principal periods.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' International Law: Unit 6 Economic Law' - ziazan

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
International law unit 6 economic law

International Law: Unit 6Economic Law

Prof. Fred Morrison

Fall 2006

Topics for this week
Topics for this week

  • International Trade Law

  • Protection of Investments

  • International Financial Law

Unit 6: Economic Law

Three principal periods
Three principal periods

  • Pre-1948: States could set tariffs and limits on trade as part of their sovereignty

  • 1948: GATT (General Agreement on Tariffs and Trade)

  • 1993: WTO (World Trade Organisation)

Unit 6: Economic Law

Pre 1947 law
Pre 1947 law

  • States imposed tariffs and quotas to protect local industry

    • Reduced international trade

    • Higher costs

  • States generally had three tariff rates

    • General rate (high)

    • Preferential rate (through bilateral agreements)

    • “Colonial” rate (Ottawa preference; French Community rate, etc.)

  • This system still functions for States that are not WTO members

Unit 6: Economic Law


  • Adopted 1947

    • Protocol of Provisional Application (pending ratification of ITO, which never happened)

  • GATT provided substantive rules

    • ITO was supposed to provide procedures, but never came into being

    • GATT (as amended in 1994) is still in force

Unit 6: Economic Law

Gatt principles
GATT Principles

  • 1. Generalized Most-Favored-Nation treatment GATT, art. I

    • All GATT members give all other GATT members the “best” tariff rate available

      • Only non-GATT members pay regular rate

    • Exception:

      • Customs unions

        • Common external tariff; no internal tariffs

      • Free Trade areas

        • Separate external tariffs, no internal tariffs

Unit 6: Economic Law

Gatt principles1
GATT Principles

  • Progressive reduction of tariffs

    • This was accomplished largely through various “rounds” of negotiations, in which all member countries “gave up” some tariff rates in order to achieve benefits from other countries.

Unit 6: Economic Law

Gatt principles2
GATT Principles

  • 2. National treatment. Once goods are admitted to a country, they are entitled to be treated the same as domestic goods of like kind. GATT art. III

Unit 6: Economic Law

Gatt principles3
GATT Principles

  • 3. Elimination of Quantitative Restrictions. The only means of limiting imports is tariffs; no quotas.

    • States could prohibit goods, if they prohibited like goods domestically (e.g., alcoholic beverages)

    • Toleration of mutually agreed export quotas

Unit 6: Economic Law

Further developments in the gatt era
Further developments in the GATT era

  • Less developed countries could be given a favorable rate (“better than the best rate”) without triggering a rate cut for other developed countries

    • In a sense, this replaced the old “colonial rate”

Unit 6: Economic Law

Issues in gatt
Issues in GATT

  • “Dumping” (Export of goods at less than their value) prohibited. Anti-dumping duties permitted to counteract dumping. GATT Art. VI

  • “Subsidies” Countervailing duties authorized to offset government subsidies of production. GATT Art. XVI

Unit 6: Economic Law

Issues in gatt1
Issues in GATT

  • “Safeguards.” Temporary measures to protect an industry particularly hard hit. Art. XIX

Unit 6: Economic Law

Disputes in the gatt era
Disputes in the GATT era

  • Since GATT was an “informal” organization, dispute resolution was not formally organized.

    • Initial decisions by “panels” of trade diplomats (possibly including lawyers)

    • Adoption of those decisions by consensus of all of the GATT members

      • Any member (including losing party) could block creation of panel or adoption or report

Unit 6: Economic Law

Wto 1994 and beyond
WTO—1994 and beyond

  • “Uruguay round” of trade negoiations led to adoption of World Trade Organisation.

    • WTO provides organizational structure

      • And a few new codes

    • GATT continues to provide substantive law

      • Subject to a few amendments. GATT 1994

Unit 6: Economic Law

New with wto
New with WTO

  • More elaborate “codes” about many of the foregoing issues

  • TRIPS. Trade-related Intellectual Property agreement

    • Requires certain protection of intellectual property throughout WTO system

      • Expands protection previously offered by multilateral treaties (Berne, Paris conventions)

Unit 6: Economic Law

New with wto1
New with WTO

  • GATS. General Agreement on Trade in Services. Opens trade in services (banking, insurance, legal services) across national boundaries

Unit 6: Economic Law

New with wto2
New with WTO

  • Shift in dispute resolution

    • Automatically considered by panels

    • Possibility of appeal to Appellate Body

    • Elimination of possibility of “veto” of report

      • Report is automatically adopted unless rejected by consensus

Unit 6: Economic Law

Current issues
Current issues

  • Interplay of trade law with other parts of international law

    • Environmental law; human rights law; etc.

  • Look at Article XX exceptions

    • Look to chapeau: “not . . . A means of arbitrary or unjustifiable discrimination”

    • Specific exceptions

Unit 6: Economic Law

The traditional law
The traditional law

  • Western view

    • Property of a foreigner could only be taken for a public purpose, and on payment of compensation that was

      • Prompt (payable immediately; cash)

      • Adequate (full market value before the taking)

      • Effective (convertible currency)

    • Diplomatic efforts to obtain compensation

      • Foreigner must pursue local remedies first

Unit 6: Economic Law

Other views
Other views

  • Communist (Soviet) view

    • Property was created by State and can be abolished by State. No compensation

  • Calvo (Latin American) view

    • Foreigner is only entitled to same compensation that a domestic citizen gets

    • No international intervention to seek payment

Unit 6: Economic Law

Means of protection
Means of protection

  • Treaty protection. Takings clauses in--

    • Treaties of Friendship, Navigation, and Commerce (FCN) and Treaties of Amity

    • Usually have no procedures

  • Bilateral Investment Treaties

    • Include procedures (arbitration between investor and state)

  • Some multilateral treaties (e.g., NAFTA)

Unit 6: Economic Law

Other means of protection
Other means of protection

  • ICSID. International Centre for the Settlement of Investment Disputes.

    • Arbitration between investor and State

      • NOTE: Break from State-State claims

    • Arbitration award enforceable as an international award. (Waiver of sovereign immunity)

    • Note: ICSID is subsidiary of World Bank

Unit 6: Economic Law

Other means of protection1
Other means of protection

  • Investment insurance.

    • Investor buys insurance from Ex-Im Bank or similar institution.

      • If property is nationalized (or certain other events, such as inconvertibility of currency occur), Ex-Im Bank pay investor, takes subrogation of claim

      • Claim is then a State-to-State international claim

Unit 6: Economic Law

International financial institutions

InternationalFinancial Institutions

Major global institutions
Major Global Institutions

  • International Monetary Fund

    • Stabilizing exchange rates

  • World Bank (International Bank for Reconstruction and Development)

    • Investing in development projects

    • World Bank Group

Unit 6: Economic Law

International monetary fund imf
International Monetary Fund (IMF)

  • Member States deposit funds in bank

  • Bank uses funds to stabilize exchange rates

  • Bank can lend hard currency to States which have payments problems

    • First “tranche” of loans fairly simple

    • Subsequent “trances” subject to “conditionality”

  • Decision-making based on contributions

    • Developed countries control the IMF in fact

Unit 6: Economic Law

World bank group
World Bank Group

  • World Bank

    • Loans to governments for development

  • International Development Association

    • Low (or no)-interest, long-term loans to the poorest countries

  • International Finance Corporation

    • Loans for development to private entities in developing countries

  • Also ICSID

Unit 6: Economic Law

World bank group issues
World Bank Group Issues

  • Decision-making. Similar to IMF

  • Relationship of development to other international law goals (environment, human rights, etc.)

Unit 6: Economic Law

Regional development banks
Regional Development Banks

  • Provide loans for development within particular geographic areas

Unit 6: Economic Law