International Trade Laws: Inception and its significance ever since

In ancient period, the International Law was governed by ‘inter-racial’ relationships in all communities. Different communities governed by different religions decided to abide by certain general principles of law which would be acceptable by all on the grounds of humanity and which would lead the society into good code of conduct for the treatment of diplomatic envoys, declaration and termination of war, regulation of welfare within and outside of one’s nationality, the conclusion of treaties, and related matters connected with international relations.

The term ‘International Law’ was first coined by Jeremy Bentham in 1780. It means ‘law of nations’ which corresponds to French and German equivalents ‘Droit International’ or ‘Droit des genes‘; ‘Internationales Recht’ or ‘volkerecht’ respectively. As defined by Sir Cecil Hurst, “International Law is the aggregate of rules which determines the rights which one State is entitled to claim on behalf of itself, or its nationals against another State.”

In the period of globalization and modernization, no country can imagine to operate or survive on their own. Every country has to depend on other countries for the import or export of raw materials and other essential goods for the proper development of its economy. In the primitive times, it was the barter system which helped people of different trades to survive. Now, in the modern times, it has been upgraded with more sophisticated, dignified, and reliable method of the binding written conventional rules aided by different countries for the sole aim of a good code of conduct.

The developing countries generally export raw materials to the developed countries and are dependent on them for their finished goods. International trade is vital for the economic development of the country, raising the living standards of the people and strengthening the position of the country in the international sphere. International trade laws have mainly three objectives:

  • Attainment of foreign policy objectives
  • To increase country’s capabilities
  • To create spheres of influence.

The two controlling holder of international trade laws are:

  • The GATT, 1947 (The General Agreement on Tariff and Trade, 1947)
  • The World Trade Organisation

The GATT – The convention of GATT requires that any proposed change in the tariff or any other policy, of a member country, should not be undertaken without the consent of other member parties to the agreement and all the member countries should have a common goal to reduce the tariffs and other barriers of the international trade, which should be negotiated within the framework of GATT. The Preamble of the GATT mentions four following objectives:

1) raising the standard of living

2) utilization of the resources of the world

3) ensuring full employment and steady growing full volume of real income and effective demand

4) expansion of production and international trade

The World Trade Organisation – The WTO shall facilitate the implementation, administration of the objectives of the Multilateral Trade Agreements and it shall also provide the forum for negotiations among its members concerning their multilateral trade relations in matters dealt with under the agreement of GATT. It shall also administer the Trade Policy Review Mechanism (TPRM). It also administers the rules and procedures regarding the rules and procedures of settling disputes between the member countries. Some of the agreements are mentioned below:

US – India Strategic Partnership

1) A historic agreement on Civil Nuclear Cooperation – it addresses India’s surging energy needs for its growing economy.

2) Economy – US – India cooperation to enhance job creation and economic growth, support economic reform and liberalization, develop a bilateral business climate supportive of trade and investment and improve market access for goods and services.

India – EU Relationship

1) Develop and preserve a dynamic agricultural sector

2) High-Level Trade Group to study their bilateral trade and investment relationship.

3) Exchange information and initiate a dialogue on regulatory policy including Mutual Recognition Agreements (MRAs) and domestic regulations and market access issues related to services.

4) Joint Working Group on Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBTs).

The developments that international trade law has gained over years of coming into action are:

  • Cooperation among countries – Countries now cooperate with each other through bilateral agreements, treaties and international organisations. It encourages to take a mutual decision for the benefit of not only one country, but also of various other countries.
  • Growth in emerging markets – Developing countries like India, South America and other parts of Asia have increased their trade potential globally. With such developments, international trade holds a significant position nowadays.
  • Dynamic approach – Developments in science and information technology has upgraded the way international trades or business has been carried out over the years.
  • Liberty to transport goods and services internationally – Producers have become more efficient by competing against foreign companies. Though governments have imposed various restrictions on such cross-border movements, it is for the advantage and benefit of such companies.
  • Importing scarce resources – International trade can help a country to import any such scarce resources which are abundant in other countries.

The effectiveness with which international trade can be used as an instrument at an international level solely depends upon a country’s economic development and political scenario. It increases real incomes and consumption which eventually leads to curtail unemployment and foster economic growth.

International trade law has made a fair contribution to the south in the 19th and 20th centuries and in the 21st century it is an integral part of the globalized world and has contributed tremendously over the years, and has given its own share of prosperity.


ABOUT THE AUTHOR

07

SOMANKA GHOSH

Somanka is a fifth-year law student pursuing BA LLB in Calcutta University. She’s also pursuing a diploma course in Entrepreneurship and Business Laws. After interning in various law firms in Calcutta High Court and gaining experiences about the practicalities of legal practice, she’s now keen to test her theories. An enthusiast and diligent worker, she’s also a good researcher and writer.

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