Chapter 26 International and World Trade Law International

Chapter 26 International and World Trade Law

International Law that governs affairs between nations Regulates transactions between individuals and businesses of different countries Foreign Commerce Clause A clause of the U. S. Constitution that vests Congress with the power “to regulate commerce with foreign nations” Exclusive power over foreign affairs is not vested in the federal government ▪ Any state or local law that unduly burdens foreign commerce is unconstitutional Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -2

Treaty Clause A clause of the U. S. Constitution which states that: The president “shall have the power … to make treaties, provided two-thirds of the senators present concur” Treaty: An agreement between two or more nations ▪ Formally signed by an authorized representative of each nation and ratified by each nation Bilateral treaty: A treaty between two nations Multilateral treaty: A treaty involving more than two nations Convention: A treaty that is sponsored by an international organization Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -3

United Nations (UN) An international organization created by a multilateral treaty in 1945 to: Promote social and economic cooperation among nations Protect human rights General Assembly The legislative body of the United Nations that is composed of all UN member nations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -4

United Nations (UN) Security Council A council composed of fifteen member nations that is responsible for maintaining international peace and security ▪ Five nations are permanent members ▪ Ten other countries chosen by the members of the General Assembly Secretariat: A staff of persons that administers the day-to-day operations of the UN It is headed by the secretary-general Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -5

United Nations Agencies United Nations Educational, Scientific, and Cultural Organization (UNESCO) International Fund for Agricultural Development (IFAD) International Monetary Fund (IMF) • An agency of the United Nations whose primary function is to promote sound monetary, fiscal, and macroeconomic policies worldwide by providing assistance to needy countries World Bank • An agency of the United Nations whose primary function is to provide money to developing countries to fund projects for humanitarian purposes and to relieve poverty United Nations Children’s Fund (UNICEF) • An agency of the United Nations whose primary function is to provide aid to improve the lives of the world’s children Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -6

The International Court of Justice The judicial branch of the United Nations, located in The Hague, the Netherlands Also called the World Court The ICJ ▪ Hears cases that nations refer to it as well as cases involving treaties and the UN Charter ▪ Is composed of fifteen judges who serve nine-year terms Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -7

European Union (EU) A regional international organization Comprises many countries of Western and Eastern Europe Created to promote peace and security as well as economic, social, and cultural development EU administration Council of Ministers is composed of representatives from each member country ▪ The council votes on significant issues and changes to the treaty European Union Commission – Independent of it’s member nations and charged to act in the best interests of the union Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -8

EU Administration EU’s Council of Ministers is composed of representatives from each member country The council votes on significant issues and changes to the treaty European Union Commission ▪ Independent of it’s member nations ▪ Charged to act in the best interests of the union Euro: A single monetary unit that has been adopted by many countries of the EU that comprise the eurozone Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -9

North American Free Trade Agreement (NAFTA) A treaty that has removed or reduced tariffs, duties, quotas, and other trade barriers between the United States, Canada, and Mexico The treaty contains a safety valve ▪ A country can reimpose tariffs if an import surge from one of the other nations hurts its economy or workers Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -10

North American Free Trade Agreement (NAFTA) NAFTA Allows the bloc to discriminate against outsiders and to cut deals among its members Includes special protection for favored industries that have a lot of lobby muscle Forms a supernational trading region that more effectively competes with Japan and the EU Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -11

Association of Southeast Asian Nations (ASEAN) An association of many countries of Southeast Asia Provides for economic and other coordination among member nations ASEAN Plus Three ▪ Includes China, Japan, and South Korea ▪ It has informal relations to discuss regional issues Organization of the Petroleum Exporting Countries (OPEC) An association comprising many of the oil-producing countries of the world Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -12

Dominican Republic–Central America Free Trade Agreement (DR-CAFTA) An association of several Central American countries and the United States Designed to reduce tariffs and trade barriers among member nations It is seen as a stepping stone toward the creation of the Free Trade Area of the Americas (FTAA) ▪ Free trade agreement that would encompass most of the countries of Central America, North America, and South America Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -13

World Trade Organization (WTO) An international organization of 153 member nations Created to promote and enforce trade agreements among member countries and customs territories Aims to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules General Agreement on Tariffs and Trade (GATT) A multilateral treaty ▪ Establishes trade agreements and limits tariffs and trade restrictions among its member nations Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -14

WTO Dispute Resolution Breach of trade agreement – a member nation can initiate a proceeding WTO panel: A body of three WTO judges ▪ Hears trade disputes between member nations and issues panel reports Panel report is referred to WTO dispute settlement body: A board composed of one representative from each WTO member nation ▪ Reviews panel reports Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -15

WTO Dispute Resolution WTO appellate body: A panel of seven judges selected from WTO member nations Hears and decides appeals from decisions of the dispute- settlement body Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -16

National Courts and International Dispute Resolution The majority of cases involving international law disputes are heard by national courts National courts: The courts of individual nations International contract clauses Forum-selection clause ▪ A clause that designates the judicial or arbitral forum that will hear and decide a case Choice of law clause ▪ A clause that designates the law to be applied by the court or arbitrator in deciding a case Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -17

Act of State Doctrine A doctrine which states that judges of one country cannot question the validity of an act committed by another country within that other country’s borders It is based on the principle that a country has absolute authority over what transpires within its own territory Doctrine of sovereign immunity A doctrine which states that countries are granted immunity from suits in courts of other countries Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -18

Foreign Sovereign Immunities Act (FSIA) An act that exclusively governs suits against foreign nations that are brought in federal or state courts in the United States It codifies the principle of qualified, or restricted, immunity Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -19

Exceptions to the FSIA A foreign country is not immune to lawsuits in U. S. courts: If the foreign country has waived its immunity, either explicitly or by implication Commercial activity exception An exception which states that a foreign country is subject to lawsuit in the United States if ▪ It engages in commercial activity in the United States ▪ It carries on such activity outside the United States but causes a direct effect in the United States Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -20

Religious Laws Religious law governs or at least affects the laws of many nations Types of religious laws Jewish Law and the Torah Islamic Law and the Qur’an Christian and Canon Law Hindu Law—Dharmasastra Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -21

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 26 -22