SOURCES OF INTERNATIONAL TRADE LAW

Sources of law are the origins of laws, the binding rules that enable any state to govern its territory.  There are various sources of International trade law like natural law, international economic law,  etc. The sources are as follows:  

GENERAL PRINCIPLES OF LAW: 

One of the sources of International trade law is the natural law subsisting in other nations. There  are the various laws existing in different nation and are accepted as a source of law if the rules are  applicable generally. International law borrows its principle from various developed nations in  national legal system but only if they appear common and general in many legal systems. 

INTERNATIONAL ECONOMIC LAW: 

International Economic Law are in form of treaties, protocols and accepted customs and Natural  Law. International economic law also comprises of international organization such as IBRD, IMF,  WTO, etc. and are made through codification, conventions and conference. They are applicable to  mutual economic relation relating to international trade, carriage, capital, credit and international  payments. In terms of international economic law there is no international legal hierarchy of courts  to implement International economic laws. The disputes regarding international economic law are  settled primarily through consultation. The ultimate of International economic law is economic  development and free trade 

INTERNATIONAL CUSTOMARY LAW 

Custom is a line of conduct which the society has consented to regards as obligatory. The international customary law fulfills the three important aspect in constructing Economic Laws. These aspects provide the bases for international economic law, provides the bulk of law of International economic torts, minimum standard of treatment of foreign nations. For example: the trade practice of mercantilism in UK. This trade practice was started in the 16th century in UK and was accepted worldwide as a theory of international trade law.

ECONOMIC TREATIES AND PROTOCOLS: 

Compared with the above-mentioned law creating processes, treaties and protocol also forms an  important part of source of economic laws. The Vienna Convention of the Law of Treaties of 1969,  sets out the fundamental legal rules relating to treaties. The Vienna Convention defines a treaty,  identifies who has the capacity to conclude a treaty, and outlines treaty interpretation, disputes,  and reservations. The basis of treaty law is ‘pacta sunt servanda’, which means that agreements  must be honoured and adhered to and Protocols are the first or original draft of an agreement signed  by those making it, in preparation for treaty. 

PRINCIPLES OF INTERNATIONAL TRADE LAW: 

TRADE WITHOUT DISCRIMINATION 

a) Most Favoured-Nation Treatment 

The countries cannot normally discriminate between their trading partners. Grant someone a  special favour (such as a lower customs duty rate for one of their products) and you have to do the  same for all other WTO members. This principle is known as most-favoured-nation (MFN)  treatment. Some exceptions are allowed. For example, countries can set up a free trade agreement  that applies only to goods traded within the group — discriminating against goods from outside.  Or they can give developing countries special access to their markets. 

b) National Treatment Principle 

Imported and locally-produced goods should be treated equally — at least after the foreign goods  have entered the market. The same should apply to foreign and domestic services, and to foreign  and local trademarks, copyrights and patents. This principle of “national treatment” (giving others  the same treatment as one’s own nationals) is also found in all the three main WTO agreements

National treatment only applies once a product, service or item of intellectual property has entered  the market. Therefore, charging customs duty on an import is not a violation of national treatment  even if locally-produced products are not charged an equivalent tax. 

FREE TRADE 

One of the main principles and motto of international trade law and WTO is to achieve free trade  gradually via negotiations. There are various ways to encourage and increase trade. One of way is  through reducing trade barriers. The barriers concerned include customs duties (or tariffs) and  measures such as import bans or quotas that restrict quantities selectively. A healthy discussion  and negotiation process is conducted to reduce such barriers of trade. 

PROMOTING FAIR COMPETITION 

Although the goal and principle of international trade is free trade but tariffs are imposed on  imports and exports. But to protect the competition and competitors the principle of promoting  fair competition is inculcated. Many of the WTO agreements aim to support fair competition in  the field of agriculture, intellectual property, services, for example. The agreement on  government procurement (a “plurilateral” agreement because it is signed by only a few WTO  members) extends competition rules to purchases by thousands of government entities in many  countries. 

ENCOURAGING DEVELOPMENT AND ECONOMIC REFORM 

The international trade law and its functioning regulatory bodies like WTO contribute to  development of developed as well as developing countries. The developed countries have started  to allow duty-free and quota-free imports for almost all products from least-developed countries  and through such practices the development of developing countries is encouraged and also tends  to bring economic reforms.

Author – Aditi Kamble Symbiosis Law School, Pune