International trade law includes the rules and customs governing trade between countries. All persons may conduct Foreign Trade in accordance with their legal and commercial capacities. Before investing abroad, you should engage professional business lawyers in the country in which the investment is being made.
International trade law includes the rules and customs governing trade between countries. The United Nations Commission on International Trade Law (UNCITRAL), established in 1966, is the principal legal body of the United Nations system in the field of international trade law. It is a legal body with universal participation specialized in the reform of commercial law in the world for more than 50 years. UNCITRAL works to unify and harmonize the rules of international trade.
The World Trade Organization is the ‘only global international organization dealing with the rules of trade between nations. It is a ‘rules-based, member-driven’ multilateral organization, founded in 1994. The objectives of the WTO recognize that its Member States’ ‘relations in the field of trade and economic endeavor should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment.
General Principles of International Trade Law
- Foreign Trade shall be unrestricted except as otherwise provided by this Law.
- All persons may conduct Foreign Trade in accordance with their legal and commercial capacities, and in accordance with relevant legislation regulating commercial activities.
- Any legal act administrative authority creating restrictions on foreign trade contrary to the provisions of this Law shall be null and void.
- Formalities conducted in accordance with the provisions of this Law shall not be administered in such a manner as to have a restrictive effect on foreign trade, or to provide disguised protection to domestic products.
The General Agreement on Tariffs and Trade
The earliest major international trade agreement involving a significant number of countries is the 1948 General Agreement on Tariffs and Trade (GATT). The Agreement prohibits economic activity that member nations see as unfair. One of the prohibited practices is dumping or lowering prices in one geographic area in order to push out a competitor. Another prohibited practice is offering subsidies in order to disproportionately aid a certain economic sector. The establishment of the World Trade Organization in 1994 supersedes GATT.
Under the international trade law, there are different provisions for dispute settlement which is done with the help of WTO and GATT. It was governed by Article XXII and XXIII of the GATT, which set up a system of consultation for the settlement of disputes among the member nations. The dispute settlement system evolved over time, and there were additional documents, and legal instruments were created to incorporate changes. Even with certain changes, the dispute resolution mechanism was not considered satisfactory. International Trade laws deal with certain subjects that are inclusive to all the member nations under the WTO.
A growing number of companies that engage in international trade eventually determine that it is desirable either to establish their own operations overseas or to enter into long-term relationships. Before investing abroad, you should engage professional business lawyers in the country in which the investment is being made. Business lawyers will be able to give you guidance as you investigate your potential foreign partner and determine the structure of your investment.