International Trade Law and International Legal Systems - Assignment Example

Lecture 2) – International Legal Systems International legal system is in many ways different from the major legal systems used by nations around the world. Three of the most prominent features of international legal system that separates it from national legal system are (a) there is no legislature to make the law, (b) there is no executive branch to enforce the law, and (c) there is no world court to resolve international disputes. This is because international laws are the laws that bind nations and their citizens as one under a single and unified legal system. Major legal systems used in different nations in the world are English Common Laws traditions (practiced in US and UK), Civil Code traditions (practiced in China, Mexico, EU, and Japan), Theological Legal Systems (Shari’ah Law, Jewish and Israeli Law, and Hindu Law), and other legal systems (like Customary Laws and Socialist Law). Common law is the basis of the English legal system, the English colonies, and other English-speaking countries. It refers to the precedence-based element of the legal system that uses principle-based reasoning on every circumstance to evaluate applicable laws (Wisegeek, 2003). Civil laws are widely recognized and respected as these laws are instituted by judges and juries in previous proceedings. Civil law on the other hand is the oldest and the most popular of the laws used by nations. Civil law was developed during Emperor Justinian’s rule in Rome and was later adopted and expounded by France in 1804 and later by Germany (1896). Theocratic laws are laws used by some countries that are generally based on religion or “legal faith”. A good example of theocratic law is the Islamic legal system. Islamic legal system uses Shari’ah courts and employs the Qur’an as the source of law and legal principles. One of the other legal systems used by nations and political parties is the socialist law used by Russians during the Boshelvik Revolution as well as the laws used in China, Cuba, and North Korea. An example of the display of power of the International Legal System is the resolution of the issue between Greece and Great Britain in Ambatielos Case (Bruce, 1998; 64).where a Greek ship-owner came in conflict with the British government where the International Court of Justice has to intervene to resolve the case. The major differences between international legal system and the legal systems used by countries are substance, sources of law, language, legal reasoning, and procedure. International laws cover issues that are beyond the legal jurisdiction of nation states whereas the coverage of national law is only within its political boundaries. The source of international laws are treatises and convention, custom, general principles, judicial decisions, and scholarly writing whereas the sources of national law depends on what country uses these laws (as was discussed above). While the language used for both laws are equally difficult to understand, international laws are more difficult to comprehend than national laws because of the large scope it covers. Translating and applying international laws to specific international disputes are very difficult to do because of the limitations of translation which reflects the Italian proverb “a translator is a traitor”. References Bruce, N. (1998). The Settlement of International Disputes:The Contribution of Australia and New Zealand (Legal Aspects of International Organization, 31). Springer. Cornell University Law School. International Law: An Overview. Legal Information Institute. Accessed on March 31, 2009 from http://topics.law.cornell.edu/wex/international_law Wisegeek. What is Common Law. 2009. Accessed on March 21, 2009 from http://www.wisegeek.com/what-is-common-law.htm Lecture 3 (Public Trade Law) Trade and commerce takes place between nations and when dispute arise between parties, settlement is achieved referring to Public Trade Laws. Public Trade Laws govern trade and commerce between and among countries. Unlike private trade laws that cover agreements made between private parties, public trade laws covers trade agreements made by two or more countries. Prior 1994, it is the General Agreement on Tariff and Trade (GATT) that resolves international trade disputes. GATT was later changed to World Trade Organization (WTO) but its main function of maintaining fairness and order in trade involving different nations as well as drafting international public trade law. International public trade law resolves issues related to subsidies and countervail, trade boycotts, free trades, and issues on anti-dumping. Free trade agreements are made to open up foreign markets to US exporters. Countries that enter free trade agreements with countries that are economically stable experience significant economic and financial growth (ITA, n.d.). Two of the examples of international public trade laws are the Free Trade Acts (FTA) and Competition and Anti-trust legislations. There are currently 5 FTA, the North American Free Trade Act (NAFTA, along with CUFTA if NAFTA fails to be enforced), European Free Trade Association (EFTA), Canada-Costa Rica FTA (CCRFTA), Canada-Chile FTA (CCFTA), and Canada-Israel FTA (CIFTA) and eight more free trade agreements under negotiation. The laws created for international public trade create, monitor, regulates, and resolves issues related to trading between involved countries. So whenever issues arise, conflicting parties consult international public trade laws for conflict resolution and possible courses of action. Competition and Anti-Trust Legislations are laws that ensure that trade opportunities are distributed fairly and equally among parties. Conglomeration of economic resources results to unfair competition and unequal distribution of product and services. In other words, Competition and Antitrust legislations limits monopolies and oligarchies as well as reduce market domination. Some of the Competitive and Anti-trust Legislations instituted are Sherman Antitrust Act (authorizing the federal government to institute proceedings against trusts to dissolve them), Clayton Antitrust Act (supplements the Sherman Antitrust Act), Article 81 and Article 82 of the European Union, and Japan’s Anti-Monopoly Law. Free trade agreements and anti-trust laws have similarities and differences. The similarities between free trade agreements and anti-trust laws are that they both limit unfair competition and unequal distribution of resources among parties. The main difference between the two is that competition and anti-trust legislation works within political boundaries while free trade agreements work beyond political boundaries. For example, Sherman Anti-Trust Act can only control and regulate trade within the political boundaries of United States while NAFTA extends its regulatory power beyond United States to include Canada and Mexico. References International Trade Association. Free Trade Agreements. Accessed on March 21, 2009 from http://www.trade.gov/fta/index.asp Markham, William. 2000. An Overview of Anti-trust Law. Accessed on March 31, 2009 from http://www.maldonadomarkham.com/Antitrust-Law-San-Diego.htm Lecture 4 (International Organizations and Agreements) In order to enforce international legislations and international trade laws, international organizations are created. The functions of international organizations vary according to the needs of their components. Nation states create international organizations to achieve goals and objectives they could not achieve on their own. Three of the major international organizations of interst are the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank. World Bank is an agency created by United Nations to aid underdeveloped countries in their reconstruction and development projects. World Bank lends money to these countries so that the countries can establish and develop themselves for progress. IMF is an agency of United Nations that promotes trade and commerce in countries by increasing the stability of currency exchange in their economies. IMF does this by lending countries money for economic needs. World Trade Organization on the other hand is responsible of ensuring and enforcing that member nations follow trade policies and negotiations. The reputations of these three major international organizations are heavily criticized by opponents of globalization, opponents of corporations, some of the developing countries for international dominance, and by the US government (to some extent) for undermining the US power. Other international organizations include G7 (composed of countries France, US, Italy, Germany, Japan, Great Britain, and Canada), G8 (G7 and Russia), G20 (G8, Australia, European Union, and ten major emerging markets and economies), United Nations which includes United Nations Conference on Trade and Development (UNCTAD), International Labor Organization (ILO), and World Intellectual Property Organization (WIPO), European Union (EU), North Atlantic Free Trade Agreement (NAFTA), Organizations for Economic Cooperation and Development (OECD, which is composed of high-income countries and whose main function is to research, collect data, and draft policies to advance economic development). Preferential trade agreements are agreements made by a group of countries involving preferential treatment of bilateral agreements between countries. Preferential trade agreements are not necessarily economically beneficial for both parties because preferences are given to one party, as the name suggests. More and more countries are entering preferential trade agreements to establish strong trade and economic relationships with each other (Srinivasan, n.d). Some of the typical examples of PTA are NAFTA, EU, Association of South East Asian Nations (ASEAN), regional trade agreements (RTA), Latin American Free Trade Agreements (LAFTA), and other free trade agreements. References WTO. Regional Trade Agreements: Rules. Accessed on March 31, 2009 from http://www.wto.org/english/tratop_e/region_e/regrul_e.htm Srinivasan, T.N. Preferential Trade Agreements with Special Reference to Asia. Accessed on March 21, 2009 from http://www.econ.yale.edu/~srinivas/PrefTradeAgreements.pdf Lecture 5 (Principles of International Business Contracts and Conducts) Conducting business in other countries as well as doing business and commerce with foreign countries entails a lot of added burden and legal considerations. In performing business and trade with a foreign party, the need to take into account the laws and regulations of the jurisdiction becomes apparent as written contracts are drafted and agreed upon by every party to avoid confusion and misunderstanding. International business contracts have three major legal components which are (a) the domestic laws of the host country, (b) the domestic laws of the other country, and (c) domestic laws of third party countries. In case of disputes and conflict related to international business contracts and conducts, three legal concepts come into play. These concepts are venue clause, attornment clause, and rule of law. This is because the laws of most countries do not apply beyond their borders except for United States, EU (which is a supranatural body), and Canada (because of Canada’s Foreign Extraterritorial Measures Act). The common sources of international business laws are (a) domestic laws and directives, (b) international codes like codes from United Nations, (c) unwritten but practiced rules and regulations, and (d) codified legislations of sovereign countries with the collective directives and policies of Canada (like Principles of International Business Conduct instituted in 1975), directives and policies of United Nations (the Draft Code of Conduct on Transnational Corporations and Code of Conduct on Transfer of Technology), and the directives and policies of OECD (OECD’s Guidelines for Multinational Enterprise). The perspective of common law differs from the perspective of civil law when it comes to contract laws. For example, common law says that international contracts must not sell goods for more than $500 whereas EU civil law does not have any written requirements about it; common law do not allow advertisements that are in the form of offers whereas EU civil law allows advertisements in the form of offers; common law insist on mailbox rule (or the exception in contract law that makes an acceptance to an offer sent to mail valid) whereas civil law dictates that acceptance of an offer sent to mail is valid only upon receipt thereof; and common law requires no additional time for performance of contract but EU civil law requires Nachfirst Notice or the additional time of performance of the contract if the seller gives notice. The application and scope of influence of international contracts also varies from involved countries. For example, international business contracts with US do not allow advertisements to be offers while most of the countries do and US adopts the mailbox rule whereas other countries do not. References Nuttage, Luke. 2001. Comment on Civil Law and Common Law: Two Different Paths Leading to the Same Goal. Victoria University of Wellington Law Review. Accessed on March 31, 2009 from http://www.austlii.edu.au/nz/journals/VUWLRev/2001/43.html Lecture 6 (Dispute Resolution) Disputes often occur on domestic transactions as well as on transactions done on an international scale. Settling disputes between countries require serious arbitration in order to achieve peaceful resolution. Some of the most common types of international disputes are disputes with agents, distributors, and licensees, disputes on collection of money due on a contract, breach of contract or breach of warranty, disputes on patents and trademarks, disputes on secured creditors’ rights involving seizure of assets, and disputes on enforcement of foreign judgments. Three of the most commonly used methods to resolve international and transnational disputes are litigation, mediation, and arbitration. Litigation is the process of taking the case to legal courts. In international disputes, litigations depend on the number of parties involved and on the complexities of the case. Litigations are influenced by venue and attornment clauses, the jurisdiction that is most advantageous, jurisdiction that is more convenient, and jurisdictions where the assets and lands under dispute are located. The enforcement of foreign judgment is usually restricted to fixed amount of money. In some cases, a court will generally not enforce judgment that would cause the injunction of the other party. More often than not, the absence of an international treaty on enforcing judgment makes it possible that enforcement of judgment would not take place. Typically, judgments are not enforced when judgments are (a) contrary to public policy, (b) obtained through fraud and perjury, (c) based on tax claims and criminal penalty, (d) if it came from foreign court whose procedure is inconsistent with the host country’s fundamental principle of natural justice. In an event of a foreign lawsuit, defendants must decide whether it is wise to defend against the lawsuit by considering whether he or she has an existing asset in the location, will conduct business in the future in that jurisdiction, and whether the decisions made by the foreign court will be enforceable in his own jurisdiction. Or the defendant should consider moving the case to other jurisdiction. International arbitration is the procedure where the case is submitted to a third party (arbiter). It is encouraged that appropriate arbitration clause must be included in any contracts as enforced by United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1958. The two types of arbitration are public arbitration and private arbitration. Private arbitrations are tailor-made by parties involved (ad-hoc arbitration) and the parties should choose the existing rule of an organization (institutional arbitration). International trade disputes typically occur between states. International trade disputes that involve private businesses must prevail on its own government to initiate dispute resolution mechanisms because of the restriction set by NAFTA where private interests can be adjudicated. Typically, private businesses will use a court system in dispute resolution or a government agency. (The restrictions set by NAFTA are on national treatment, against expropriation, the obeisance on the minimum standards of international law, and the enforcement of compulsory arbitration). References Moffit, M. (ed). & Bordone, R. (ed). (August 2005). The Handbook of Dispute Resolution. Jossey-Bass. Lecture 7 (Exchange of Goods) International trading involves exchange of goods. There are certain rights and obligations in the exchange of goods in an international scale and is governed by customary international law (opinion juris) which include Law Merchant (lex mericanto), Uniform Customs and Practices for Documentary Credits (UPC), and International Chamber of Commerce Incoterms. Lex Mericanto is the earliest form of private international Law. Lex Mericanto are heard in Merchant Courts during the early days. Lex Mericanto was developed during the 12th and 13th century to serve as the legal agreement between and among merchants as agriculture expanded and the rise of cities began. Lex Mericanto ended sometime in the 18th Century as it was absorbed by Common Laws. UPC 600 was developed in 2007. It details the International Chamber of Commerce’s uniform customs and practices for documentary credits and are being used in 160 countries. Banks in these countries incorporate UPC in Letter of Credit applications. ICC Inco Terms are standard contract terms created by ICC in 1936. Inco Terms are composed of 13 terms and 4 groups (C, D, E, and F). In Canada, sales of goods are technically defined as the contract under which the seller transfers or agrees to transfer the property in goods to the buyer for a monetary sum. Canadian provinces observe different policies on sales of good by having their own Sales of Good Act (except for Quebec). Some of the most common issues in sale of goods are unpaid seller rights, buyer’s remedies, and consumer sale. Disputes and issues on sales of goods are resolved through referring the case to the policies drafted in the Vienna Sales Convention. Vienna Sales Convention defines the applicability of the contracts made on sales of goods, sets the limits of the applicability on the contracts made on sales of goods, determines when to exclude national legislations by providing distinctions on established laws (like distinguishing sales of goods contract from Canadian Laws). Sales of Goods also involve exports and imports. This means that Vienna Sales Convention also has a say on the applicability of contracts of sales of goods in imports and exports. Exports are governed by export sale agreements as well as export control legislations like the export control list (ECL) and the area control list (ACL). Imports on the other hand are governed by import controls in Canada like the Customs Act and import controls imposed by other countries such as commercial invoices. Sales of goods demand the integrity of the products sold. Generally termed as product liability, this legal concept dictates direct contractual liability and discourages negligence in any sales of good. In the same manner, damages and limited liabilities were also considered not only in Canada but also by other countries such as Japan, EU, and US. References Bradgate, R. & White, F. (May 2007). Commercial Law (Legal Practice Course Guides). Oxford Press. Lecture 8 (Intellectual Property Law and Other Legal Issues) Intellectual properties (IP) are protected by law from being used without authorization and from any illegal use as the owners of IP can sell, distribute, and license their creation to other owners. Intellectual properties are original creations from the mind used and distributed commercially like artworks, publications, symbols, names, and images (WIPO, 2009). Intellectual property is further divided into industrial properties and copyright. The main types of IP are patents, industrial design, trademark, copyright, and trade secrets and they are protected on the international scale. Patents are exclusive rights for granted to inventors for the disclosure of inventions. Patents are protected by Paris Convention and Patent Cooperation Treaty. Industrial designs are applied art that focus on the aesthetics and the usability of mass-produced items that can be improved by marketing. Industrial designs are protected by Paris Convention. Copyrights are the rights of authors to print and publish his literature. Copyrights are protected by Berne Convention and Universal Copyright Convention. Trademarks are signs created and are intended for use by products or companies. Trademarks are protected by the Madrid Convention. In order to protect intellectual properties, IP owners must need to gain license of their works to ensure ownerships and at the same time grant other parties authority to use their IP in whatever purposes the other party wants to use them for. Licenses are also required when intellectual properties approach transition on foreign operations midway between exporting and manufacturing IP abroad. To ensure that IP are protected from illegal manufacturing and distribution in foreign countries, licenses (as well as other pertinent documents) are typically required in carriage and transportation of goods. Carriage and transportation of goods have to undergo through the right channels and thus such processes are usually done by licensed brokers, freight forwarders, and other intermediaries. The transportation process involves carriers/shippers for transportation and agents/distributors for actual sales. Carriers are companies that transport persons or properties on different locations. Shippers work on the same plane and they exercise direct control over shipments as well. Agents are the people that earned authority from the principal to enter a binding contract with the other party in behalf of the principal. Agents usually do not take title and ownership of the goods. Distributors are the parties that purchase and sell foreign goods on their own accounts. Distributors sell goods through their networks which they have acquired by (a) worldwide rights on independent distributor status, (b) defined territories on independent distributor status, (c) worldwide rights on wholly owned subsidiary, and (d) defined territories on wholly owned subsidiary. References World Intellectual Property Organization. What is Intellectual Property? 2009. Accessed on March 22, 2009 from http://www.wipo.int/about-ip/en/ Read More