Author: Demet Yılmaz
Publication date: 26.06.2024
As the world develops and the human population increases, the interaction of people with each other increases. For this reason, various branches of law have emerged and become interconnected. Some of these branches are international law and commercial law. In this article we will explain the role and importance of international law in global trade agreements.
What is international law and global trade?
International law is a superior branch of law binding on all, which many states are obliged to comply with, and which covers many areas. Global trade is the exchange of goods,
capital or services globally or between regions due to need and demand. Agreements in which two or more countries or groups negotiate trade terms are called global trade agreements. These agreements can help to remove barriers to trade, ensure fair competition between businesses, and promote sustainable development.
What are the principles of international trade law?
International trade law is so complicated and lengthy. Therefore, some principles are needed, and these principles are the basic principles necessary for the trading system. One of them is Most-favoured-nation (MFN). The Most Favoured Nation (MFN) principle requires countries to treat all trade partners equally, ensuring no one country receives special treatment over others.This ensures all countries benefit from concessions between major trading partners without further negotiations. Another principle is national treatment. National treatment requires equal treatment of imported and domestic goods, services, and intellectual property, preventing unfair advantages for domestic products. If disputes arise over an agreement, they can be resolved through negotiation, mediation, short jury trial or arbitration.
What are the major international trade agreements?
There are lots of international trade agreements. One of the most famous ones is the World Trade Organization (WTO). It oversees global trade rules, negotiates trade agreements, settles disputes, and supports developing countries. Also, there are lots of regional trade agreements (RTAs) such as NAFTA, USMCA, The EU Single Market. RTAs, reciprocal preferential trade agreements between two or more partners, are WTO-authorised exceptions subject to specific rules. This should also be mentioned in bilateral trade agreements and it is the exchange of goods between two nations that reduce or eliminate trade barriers to promote investment.
How can we resolve disputes under international trade law?
The WTO resolve trade disputes through consensus-building under the Dispute Settlement Understanding (DSU). The Dispute Settlement Body (DSB), composed of all WTO members within the General Council, appoints the seven members of the WTO's Appellate Body. Effectiveness of WTO has reduced trade barriers and promotes global trade, providing a dispute settlement mechanism for fair trade relations. Challenges of WTO Negotiation deadlocks and economic inequality between developed and developing countries are key challenges facing the WTO.
What are the criticisms and challenges of international trade law?
Critics of international trade law argue it favours developed nations, lacks transparency in negotiations, undermines environmental and labour standards, restricts national sovereignty, and features dispute settlement mechanisms that favour powerful countries and corporations. They also raise concerns about cultural homogenization due to prioritising trade over cultural diversity. We should also not forget the influence of NGOs. Non-state actors like NGOs and academic institutions advocate for social and environmental issues in international trade. Multinational corporations drive global trade through investments and policy influence, but face criticism for their economic power and impact on local economies.
What will be international trade law in the future?
The future of international trade law will be shaped by the need to adapt to digital transformations, address sustainability challenges, navigate geopolitical shifts, promote inclusive growth, enhance dispute resolution mechanisms, and regulate emerging technologies effectively. Flexibility, collaboration among nations, and responsiveness to global economic and environmental concerns will be essential in shaping the evolving landscape of international trade law.
As a result, the expansion and development of international trade is inevitable in a globalising world. Finding solutions to the disputes that may arise with these developments and establishing new solution centres is one of the undeniable features of international law.
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