INT’L TRADE LAW
INTRODUCTION
Prof David K. Linnan
USC LAW # 665
Unit One
ADMIN I
COURSE PAGE AT
http://www.lfip.org/laws665s05/index.htm
READING ASSIGNMENTS IN BOOK,
POSTED ON COURSE MATERIALS
LINK WITH PARALLEL DOC CITES
ADMIN II
YOU MUST SIGN UP FOR LISTSERV
laws665 (INSTRUCTIONS AT CLASS
ADMINISTRATION LINK ON COURSE
PAGE), SEE
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INDONESIANS WILL JOIN US IN
EARLY FEBRUARY 2005 &
PROJECTS
ECONOMIC ACTIVITY
WHAT DOES THE BELOW MAP TELL YOU
ABOUT COUNTRIES AND ECONOMIC
ACTIVITY AS AN UNDERLYING REALITY
OF INT’L ECONOMIC LAW?
http://www.lfip.org/laws666spring05/index
.htm
IEL CONCEPTS
WHAT & WHY IS INTERNATIONAL
ECONOMIC LAW?
IFIs and monetary law
International trade law
ULTIMATE PROB OF STRONG MIXING
OF ECONOMIC CONCERNS/ISSUES
PIL CONCEPTS
WHAT ARE PUBLIC INT’L LAW CONCEPTS BEHIND
INT’L TRADE LAW
Idea of no obligation to even trade internationally
because of sovereignty over borders
Idea of no rights of establishment in terms of
foreign investment (make versus import/export)
Parallel in idea of monetary sovereignty, but that
is other part of IEL
TREATY CONCEPT
PUBLIC INT’L LAW ASPECTs IN NUTSHELL
Sources of law in treaty, customary law,
general principles of law
IEL on trade law side is largely treaty law,
specifically GATT/WTO since 1947 (history
later), plus modern regional agreements &
FTAs
INTEGRATION
WHAT ARE ECONOMIC AS OPPOSED TO
LEGAL CONCEPTS BEHIND INT’L TRADE
LAW?
Issues of economic versus political
integration, examples:
US
EU
NAFTA
APEC
TRADE MODELS
KEY ECONOMIC MODELS FOR INT’L TRADE
LAW PURPOSES
Multilateral trading system (GATT/WTO)
Regional or bilateral economic
arrangements (integration), traditionally
customs unions now FTAs like EU or
NAFTA
Further behind cooperative mechanisms
like APEC
ECON CHANGES
WHAT IS HIDDEN ECONOMIC PICTURE & HOW
DOES IT DIFFER BETWEEN ECONOMIES?
1.
Goods versus services
2.
Changing nature of economies at
different levels of development
3.
Does IEL under trade branch track these
changes? So what?
4.
Changing patterns of production (intraindustry trade)
GATT/WTO HISTORY
GATT/WTO HISTORY
Idea immediate post-WW II of economic & political
causes of the war (1930s economic crisis, rise of
fascism as indirect result of trade wars, etc.)
General Agreement on Tariffs & Trade 1947
temporary protocol as part of still-born post-WW
II remake of int’l law system
Int’l monetary system mostly made through with
Bretton Woods institutions (IMF, World Bank), but
ITO effectively cratered leaving only 1947 GATT
GATT/WTO PRIN
GATT ORGANIZING PRINCIPLES & ASSUMPTIONS
Most Favored Nations (MFN, all WTO member
foreigners get same deal)
National Treatment (foreigners get same deal as
locals)
Negotiated Tariff Concessions (incremental
rounds practice)
Hidden assumptions on market based economies
(were in failed ITO Havana Charter, matter in Cold
War idea of non-market economies or Socialists
out so China & Russia only now, could be
discriminated against)
GATT/WTO ASSUMP
GATT ORGANIZING PRINCIPLES &
ASSUMPTIONS CONT’D
Unanimity rules essentially made dispute
resolution voluntary
As a result GATT was more an economic
diplomacy forum than a legal system in
normal sense
However, not atypical for public int’l law
GATT TIME
GATT ORGANIZING PRINCIPLES & ASSUMPTIONS
CONT’D
Repetitive round structure for next 35 years
Over time, movement from tariff barriers to nontariff barriers (NTB) to tarification (meaning
converting quota or other NTBs to a reducable
number for subsequent rounds, etc.
1994 end of Uruguay Round WTO formation
effective second birth of post WW II concept
1994 WTO SHIFT
DISTINCTIVE WTO ASPECTS AS OF 1994 POSTURUGUAY ROUND
For general WTO character see document at
http://www.wto.org/english/thewto_e/whatis_e/wh
atis_e.htm
Effort to “legalize” int’l trade law, in part by
reversing the procedural presumptions on
dispute resolution side so that a country could no
longer effectively impede adoption of unfavorable
dispute settlement reports
GATS
DISTINCTIVE WTO ASPECTS CONT’D
Expansion from GATT focus solely on trade in
goods to new focus to include trade in services
under the General Agreement on Trade in
Services (GATS)
As a structural matter, industrial country
economies moving increasingly to services, so
high economic interest in GATS
Using trade law as enforcement mechanism as
for broader legal areas (intellectual property,
TRIPs in Uruguay Round now pressure growing
in environmental area)
CHANGING PLAYERS
DISTINCTIVE WTO ASPECTS CONT’D
Traditionally, trade negotiations were moved by
Big Three (US, Japan & EU), now developing
country blocks too as they advance economically
Post-1980s the Socialist world has moved from
state directed economies to market directed
economies, so in change from 1940s GATT
direction the former Communist world is now
lining up to join the club (China before, now
Russia, all major economies with China affecting
trade in goods worldwide)
LEGALIZATION CONSEQ
DISTINCTIVE WTO ASPECTS CONT’D
As part of legalization trend, the dispute settlement reports
are now rapidly developing a kind of interpretive caselaw
for WTO treaty provisions
As a result, much focus now on exceptions to MFN or
National Treatment kinds of obligations as interpretation
counts
Still tension in shift from older economic diplomacy in nonbinding GATT to legalized system under WTO, since issue
is really what happens if a major player ignores a dispute
settlement (e.g., if the Europeans rejected an unfavorable
decision on GMO coverage or hormone beef what next)
DOHA ROUND
DISTINCTIVE WTO ASPECTS CONT’D
Now we are in the early stages of Doha
Round, focused on items like trade in
agricultural goods, “Singapore
principles,” government procurement,
trade in services
For general Doha background see WTO
document at
http://www.wto.org/english/tratop_e/dda_e
/dda_e.htm
FTAs
ECONOMIC INTEGRATION’S LEGAL SIDE
Regional, expressly discriminatory and considered a
sometimes alternative to multilateral trading system
Export-led development model & Asia (political economy)
NAFTA in North America, which may be extended further
down into South America within 5 years
But note also things like Singapore-US FTA, so this is not
just NAFTA
Bottomline, the clients demand it so the lawyers must learn
how to function not only under the UCC but also the
framework the clients see on business side
FTAs & ECON TENSION
ANTI-GLOBALIZATION
If globalization is the business model
behind free trade or trade liberalization,
winners & losers plus social resistance
too (WTO Seattle meeting cratered in
protest)
In legal sense FTAs permit more
addressing of social issues as with NAFTA
environmental principles, tension re
proper balance in Doha
REGIONAL TRADE AGMTS
ECONOMIC ARGUMENTS
1. Second best, but achievable
2. Pre-NAFTA idea was countries at
similar level of development (but
Mexico changed) & customs union
tradition
3. What is difference between FTA &
regional communities
TRADE LAW MODELS
MODERN TRADE LAW NOW GOES BEYOND
GATT/WTO ALONE IN PRACTICE TO
ENCOMPASS
1.
Multilateral trading system (GATT/WTO)
2.
Regional agreements & law like NAFTA or EU
law, often including investment rights
3.
FTAs, but again what is difference
between FTA & regional communities
4.
Changing emphasis beyond goods to include
new areas like services & TRIPs, differences
now in areas like investment & competition
policy, changing trade & production patterns