Session 5 - Sources of International Trade Law

Course             : Law in International Business

Lecturer           : Dr. Shidarta, S.H., M.Hum.

Date                : 9 April 2013 (Session 5)

Topic               : Sources of International Trade Law

Method           : F2F (Face to face)

There are many sources of international trade law, such as:
1.  International Agreement

International agreement, instrument by which states and other subjects of international law, such as certain international organizations, regulate matters of concern to them. The agreements assume a variety of form and style, but they are all governed by the law of treaties, which is part of customary international law. Divided into three forms which consist of multilateral, regional and bilateral.

Binding international trade agreements based on the agreement of the parties who made ​​it. This, because of international trade agreements will only be binding on a country if that country agreed to sign or ratify it.
Means must be ratified into national law as part of the domestic law of the country.
However, the treaty does not allow the state to apply or exclude some settings or article of the treaty. Or conversely, an international agreement did not allow the existence of such reservation.

One of the other ways the state to be bound to a treaty is through subjugation quietly. That is, without expressly bind themselves through the signing and ratification, a state can be joined to the charge by adopting an international treaty into domestic law.
The state provision should be expressly so requires or, if the charge of the treaty gave the rights (concessions) specific to the member states, and not to non-members.
GATT, for example, is a trade and tariff agreements umu. Who were the members should first negotiate with member countries of GATT the concessions that will be given before it can take advantage of the 38th chapter of the GATT.

The GATT has been the backbone of international trade law throughout most of the twentieth century. It contains rules relating to "unfair" trading practices.

Whats in the Agreement:
1) Trade liberalization: countries removed the obstacles that may hinder the smooth transaction.
2) Economic integration: this is done by the countries customs unification efforts, free trade area and economic unity.
3) Harmonization of Law: states seek uniformity or the intersection of the principles that are fundamental.
4) Legal Unification: unification includes the removal and replacement of a system of business law with a new legal system.
5) Model Law and Legal Guide: countries will be able to refer the charge rules of law or legal models to guide it in its national law.

International standards are the norms to exist in the treaty, which is a fairly important requirement in the international economic order, as well as a requirement for countries to participate in international economic transactions.

The basic requirements are:
1. Minimum- standard or equitable treatment, basic rules that must be adhered to in order to take part in international trade transactions

2. Most-favoured nation clause, clause requiring non-discriminatory treatment of one state against another. One of the countries provide special treatment or preference to a country, then the treatment should also be given to other countries

3. Equal Treatment, participating countries in a stipulated agreement anxious to give equal treatment to each other

4. Preferential Treatment, this principle of a nation can give special treatment more favorable to a country other than the country.

2. Customary International Law

Customary international law was born from the practices of the merchants who made ​​repeated such that the repetitive habits with a relatively long time it becomes binding.

A habitual practice to be binding must meet the following requirements:
      (1) A repeated practice performed and followed by more than two parties (state practice), and
      (2) the state practice accepted as binding (opnio iuris sive necessitatis).

Provisions of the law merchant [Lex Mercatoria] can be found in the custom-developed in
international trade contracts, for example in the standard contract clauses raw, or contracts in the field of transport (maritime).
Contracts or contract clauses which are usually designed by a trade association or trade organization (eg by the ICC, FIDIC, etc.) and followed by members of the organization or association.
Trade practices have a very important role in international trade transactions in something. For example, the habit codified in the construction contract or the delivery of goods, FOB, CIF etc..

3. General Legal Principles

The legal source will start to function when the law of treaties (international) and customary international law does not give an answer to something matters. Therefore, the principles of common law is seen as an important source of law in an effort to develop the law, including, of course, international trade law.

Some examples of common law principles, these include the principle of good faith, the principle of pacta sunt servanda, and replace loss. These principles are recognized in almost all legal systems that exist in the world, and there is also the law (trade) internationally.

4. Judgments of the Court Bureau & Doctrine

Court decisions in international trade not have such a strong force in the law system of Common Law (Anglo-Saxon).
Status is more or less the same as in the existing legal system in Continental (Civil Law), namely that the earlier court decision just to be considered. So there is a kind of obligation is not binding for the court agencies to consider court decisions existing prearranged (in disputes related to international trade).

 Doctrine

The opinions or writings of leading scholars (especially in this case in the field of international trade law). The role and function is quite important in explaining something of international trade law. Even the doctrine can be used to find the law.

5. Contract

Sources of international trade law which actually is the main source and the most important in the agreement or contract made by the vendor themselves. As can be seen, the contract is "the Law" for the parties who made ​​it.

Traders  or the stake-holders  in international trade law in the conduct of international trade transactions, they will put it into written agreements (contracts). Therefore, the contract is very essential. Because it acts as a source of contract law and the need to make their first important reference in carrying out their rights and obligations in international trade.

Contract restrictions:
First, freedom is not contrary to law, and in particular standards, public order, morality, and decency.
Second, the status of the contract itself. Contracts in international trade is nothing but a national contract no foreign element. That is, the contract, even though the field of international trade, a lot of little bow and constrained by national law (of a particular country).
Third, according to Sanson, other limitations are also important and binding agreement of the parties is-deal or availability "normality" of the previous trading done by the parties
concerned.

6. National Law

Actual role of national law is broader than simply regulate international trade contracts. The significant role of the national law was born from the jurisdiction and authority of the state. Its authority is absolute and exclusive. That is, if there are no other exceptions, then the rule can’t  be rescinded.
Jurisdiction or authority is the authority of a state to regulate all,
(a) legal events, (b) the subject of law, and (c) objects that are within its territory.
 This set includes the authority to make laws (national) that are either public law or civil law.

So, before someone or some company conduct in international scale trade they must deal with the rules and restrictions first. These rules and restrictions are made to make the trading environment to become fair and some rules are not perfect, which means that there are some advantage and disadvantage that the actors of trade can get. But in my opinion the most important source is the “Contract” between two sides or more that is made by everyone involved in that contract and agree about it. The contract itself contain about the agreement and their own obligations, which must be done just as planned by the people who signed it on their own will and consciousness.

Sources:

Encylopedia Britannica
Wikipedia
Google
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