Introduction to International
Economic Law
Introduction to the unit................................................................................................. 2
1. Nature of International Economic Law................................................................ 2
1.1 Nature of International Economic Law.......................................................... 2
1.2 Multiple choice questions .............................................................................. 3
2. The Bretton Woods Agreement ........................................................................... 5
2.1 The Bretton Woods Agreement ..................................................................... 5
2.2 Multiple choice questions .............................................................................. 6
3. The Three Regulatory Pillars of the World Economic Order .............................. 8
3.1 The Three Regulatory Pillars of the World Economic Order ........................ 8
3.2 Multiple choice questions .............................................................................. 9
4. Regional Economic Law Organisations............................................................... 9
4.1 Regional Economic Law Organisations......................................................... 9
4.2 Multiple choice questions ............................................................................ 11
Do this ................................................................................................................ 12
Try this ............................................................................................................... 12
Acknowledgements .................................................................................................... 12
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Introduction to the unit
This unit is an introduction to the subject of International Economic Law. It
includes a historical development of the subject and refers to the principal
organisations related to International Economic Law.
The purpose of this unit is to increase:
 Familiarisation with the historical development and purpose of the most
prominent institutions regulating international economics.
1. Nature of International Economic Law
1.1 Nature of International Economic Law
International Economic Law deals with the regulation of economic affairs between
two or more different States. This is its main function. If such regulation applies to
two States only, we then speak of bilateral economic regulation. If, on the other
hand, such regulation applies to more than two States, we speak of multilateral
economic regulation.
Beyond this, International Economic Law is seen to increasingly deal with the
regulation of traders from different countries. As a result, International Economic
Law has a dual character nowadays, as it deals both with the regulation of
economic relations of different States but also with the regulation of traders from
different countries.
Activity 1
This activity should take approximately 5 minutes to complete.
Click on the tabs in the animation to see the difference between bilateral economic
regulation and multilateral economic regulation
An animation that shows the difference between bilateral economic regulation and
multilateral economic regulation.
Flash content unavailable
International Economic Law deals with two kinds of legal instruments: soft law
instruments and hard law instruments. Hard law instruments create obligations
being binding and enforceable in nature, whereas soft law instruments do not create
obligations and are non-binding and generally unenforceable in nature.
Activity 2
This activity should take approximately 15 minutes to complete.
An animation that shows the difference between hard and soft law instruments.
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Flash content unavailable
Answer
This animation shows that:
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A hard law instrument is for instance a binding provision such as the
competition provisions of EU law.
A soft law instrument is a non-binding instrument which may have to be
followed such as the Articles of Agreement of the International Monetary
Fund.
End of answer
1.2 Multiple choice questions
Now test your understanding of what this section has covered so far.
The following multiple choice questions should take approximately 10 minutes to
complete.
Question 1
What is the subject matter of International Economic Law in the main?
(a) Economic relations between States
(b) Economic relations between traders of different States
(c) Economic relations between traders of different States and economic relations
between different States
(d) Economic relations between different regional trade blocks
Answer
The subject matter of International Economic Law in the main is:
(a) Economic relations between States
End of answer
Question 2
International Economic regulation can be concerned with two States only. It can
also be concerned with many States. What are the terms to describe these two types
of regulation?
(a) Bilateral and multilateral economic regulation
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(b) Regional and global trade block
(c) Single and multiple economic regulation
(d) Unipolar and multipolar trade affairs
Answer
The correct terms to describe International Economic regulation between two States
and between many States are:
(a) Bilateral and multilateral economic regulation
End of answer
Question 3
International Economic Law is increasingly seen to be having a dual character. This
character relates to:
(a) Traders and trade blocks
(b) Traders and States
(c) Traders and politicians
(d) Traders and banks
Answer
International Economic Law is increasingly seen to be having a dual character,
relating to:
(b) Traders and States
End of answer
Question 4
Depending on the level of force behind an International Economic Law instrument,
an instrument as such can be:
(a) Hard or soft law
(b) Multilateral or bilateral agreement
(c) Politicised or non-politicised agreement
(d) Regional or global law
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Answer
Depending on the level of force behind an International Economic Law instrument,
an instrument as such can be:
(a) Hard or soft law
End of answer
2. The Bretton Woods Agreement
2.1 The Bretton Woods Agreement
The foundations for the organisations relating to modern International Economic
Law were laid in 1944 with the Bretton Woods Agreement. The Agreement was
concluded by 44 Allied States.
The Bretton Woods Agreement grew out of the desire to eradicate the causes that
led to the Second World War, the ultimate goal being the creation of a new world
economic order.
Activity 3
You should expect to spend approximately 10 minutes on this activity.
Explore the map using your mouse to see which countries were involved in the
Bretton Woods Agreement.
An interactive world map that show the countries which were involved in the
Bretton Woods agrement.
Flash content unavailable
Answer
The countries who signed the Bretton Woods Agreement were:
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Australia
India
Belgium
Iran
Bolivia
Iraq
Brazil
Liberia
Canada
Luxembourg
Chile
Mexico
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China
Netherlands
Colombia
New Zealand
Costa Rica
Nicaragua
Cuba
Norway
Czechoslovakia
Panama
Dominican Republic
Paraguay
Ecuador
Peru
Egypt
Philippines
El Salvador
Poland
Ethiopia
Union of South Africa
France
Union of Soviet Socialist Republics (USSR)
Greece
The United Kingdom
Guatemala
The United States
Haiti
Uruguay
Honduras
Venezuela
Iceland
Yugoslavia
End of answer
2.2 Multiple choice questions
Now test your understanding of what this section has covered so far.
The following multiple choice questions should take approximately 10 minutes to
complete.
Question 5
What was the name of the Agreement that laid the foundations for the creation of
the WTO, the IMF and the World Bank Group?
(a) The Bretton Woods Agreement (1944)
(b) The Potsdam Agreement (1945)
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(c) The Dayton Agreement (1995)
(d) The Luxembourg Agreement (2003)
Answer
The name of the Agreement that laid the foundations for the creation of the WTO,
the IMF and the World Bank Group was:
(a) The Bretton Woods Agreement (1944)
End of answer
Question 6
What was the desire behind the Bretton Woods Agreement?
(a) A desire to put an end to the Second World War
(b) A desire to eradicate the causes that led to the Second World War
(c) A desire for creating a system of fluctuating currencies
(d) A desire for the abolition of different currencies
Answer
The desire behind the Bretton Woods Agreement was:
(b) A desire to eradicate the causes that led to the Second World War
End of answer
Question 7
What was the ultimate goal of the Bretton Woods Agreement?
(a) The creation of a global alliance of States
(b) The creation of an economic trade block
(c) The creation of a new world economic order
(d) The creation of a military alliance
Answer
The ultimate goal of the Bretton Woods Agreement was:
(c) The creation of a new world economic order
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End of answer
3. The Three Regulatory Pillars of the World
Economic Order
3.1 The Three Regulatory Pillars of the World Economic Order
The Bretton Woods system gave birth to three international organisations of
paramount importance for International Economic Law.
These are:
1. The World Trade Organization (WTO) (the successor of the General
Agreement on Tariffs and Trade)
2. The International Monetary Fund (IMF)
3. The World Bank Group
These are generally perceived as the three main organisations regulating the
international economic order.
Activity 4
You should expect to spend approximately 10 minutes on this activity.
Use this animation to find out further information about the Three Regulatory
Pillars of the World Economic Order.
An interaction which gives further information on the WTO, IMF and World Bank
Flash content unavailable
Answer
The Three Regulatory Pillars of the World Economic Order include:
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The World Trade Organisation: The main functions of the WTO are:
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To administer WTO agreements
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To review trade policies of member states acting as a forum for the
resolution of international trade disputes
The WTO adheres to four principles:
1. Non-discrimation
2. Reciprocity eg. mutual tariff reduction
3. Transparency eg. clear unambiguous trade measures
4. Fairness eg. restrictions on dumping goods
The International Monetary Fund: An international organisation which
keeps the global financial nexus under inspection.
The IMF does so by observing the world exchange rates and the balance of
payments and multilateral payments.
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The IMF also offers technical assistance to various countries around the
world.
The World Bank: A set of organisations that strive for the promotion of
world development by:
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Making financial resources available to governments
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Making financial resources available to private enterprises
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Stimulating investment flow
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Providing a forum for resolving disputes arising within the areas of
investment
End of answer
3.2 Multiple choice questions
Now test your understanding of what this section has covered so far.
The following multiple choice question should take approximately 5 minutes to
complete.
Question 8
International Economic Law is primarily concerned with certain institutions of
global remit. These are:
(a) The ASEAN, the EU and NAFTA
(b) The WTO, the IMF and the World Bank Group
(c) The UN and the International Court of Justice
(d) The NATO and the International Criminal Court
Answer
International Economic Law is primarily concerned with certain institutions of
global remit, which are:
(b) The WTO, the IMF and the World Bank Group
End of answer
4. Regional Economic Law Organisations
4.1 Regional Economic Law Organisations
International Economic Law is also relevant to certain regional trading blocks, as
illustrated in the map below.
Activity 4
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You should expect to spend approximately 10 minutes on this activity.
Use this animation to familiarise yourself with regional trading blocks: some of the
most important include:
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The European Union
The European Free Trade Area
The North American Free Trade Agreement
The Mercosur
The Association of Southeast Nations
The Asia-Pacific Economic Co-Operation
An interactive map which shows the regional economic law organisations and their
member states.
Flash content unavailable
Answer
The regional trading blocks shown on the map include:
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The European Union: Austria, Belgium, Bulgaria, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Ital,
Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom
The European Free Trade Area: Iceland, Norway Switzerland, Liectenstein
The North American Free Trade Agreement: Canada, USA, Mexico
The Mercosur: Argentina, Brazil, Paraguay, Uruguay
The Association of Southeast Nations: Brunei, Darussalam, Cambodia,
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand,
Vietnam
The Asia-Pacific Economic Co-Operation: Australia, Brunei, Canada,
Indonesia, Japan, Republic of South Korea, Malaysia, New Zealand,
Philippines, Singapore, Thailand, USA, Taiwan, Hong Kong, China, Mexico,
Papua New Guinea, Chile, Peru, Russia, Vietnam
The Andean Community of Nations: Bolivia, Colombia, Ecuador, Peru
The Commonwealth of Independent States: Armenia, Azerbaijan, Belarus,
Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine,
Uzbekistan
The Association of Caribbean States: Antigua and Barbuda, Bahamas,
Barbados, Belize, Colombia, Costa Rica, Cuba, Dominica, Dominican
Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras,
Jamaica, Mexico, Nicaragua, Panama, St. Kitts and Nevis, St. Lucia, St.
Vincent and the Grenadines, Suriname, Trinidad and Tobago, Venezuela
The African Union: Algeria, Angola, Benin, Botswana, Burkina Faso,
Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Comoros,
Ivory Coast, Democratic Republic of the Congo, Republic of Congo,
Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Gambia,
Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Libya, Madagascar,
Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria,
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Rwanda, Sahrawi Arab Democratic Republic, Sao Tome and Principe,
Senegal, Seychelles, Sierra Leone, Somalia, South Africa, Sudan, Swaziland,
Tanzania, Tongo, Tunisia, Uganda, Zambia, Zimbabwe
South East Asian Association for Regional Cooperation: Pakistan,
Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Sri Lanka
End of answer
4.2 Multiple choice questions
Now test your understanding of what this section has covered so far.
The following multiple choice questions should take approximately 10 minutes to
complete.
Question 9
International economic regulation operates on two levels. Which are they?
(a) Political and economic
(b) Unipolar and multipolar
(c) Regional and global
(d) Financial and political
Answer
International economic regulation operates on two levels, which are:
(c) Regional and global
End of answer
Question 10
Despite the global relevance of International Economic Law, such law is also
concerned with the regulatory frameworks of certain regional trading blocks.
Which are these blocks?
(a) The NATO and the G8
(b) The WTO, the IMF and the World Bank Group
(c) The World Intellectual Property Organization and the European Patent Office
(d) The European Union, the European Free Trade Area, the North American Free
Trade Agreement, Mercosur, the Association of Southeast Nations and the AsiaPacific Economic Co-operation
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Answer
International Economic Law is also concerned with the regulatory frameworks of
the following regional trading blocks:
(d) The European Union, the European Free Trade Area, the North American Free
Trade Agreement, Mercosur, the Association of Southeast Nations and the AsiaPacific Economic Co-operation
End of answer
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Acknowledgements
Author: Antonios Platsas
Image of Supreme Court building Perth, Western Australia: Photo & copy: Adrian
van Leen for openphoto.net CC:PublicDomain
All other written material contained within this unit originated at the University of
Derby.
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