International Trade Law: Introduction

Joseph Giancarlo Agdamag

Globalization

Economic Globalization
Gradual integration of national economies into one borderless global economy
▪ International Trade ▫ free
▪ Foreign Direct Investment ▫ unrestricted

Changing Nature of Trade

▪ Trade in tasks and in value added

▪ Global value chains (GVCs)
▪ Comparative advantage

Harmful Effects
1. Jobs and wages
2. Environmental impact
3. Poverty and hunger
4. Economic development of developing countries
5. Social, labor, health, and safety rules
6. Livelihood of small farmers
7. Cultural identity and diversity
8. National sovereignty and democratic processes

Arguments for Restriction of Trade

1. Protection of domestic industry
2. Income from customs
3. National security
4. Promote non-economic social values (morals, health, environment, human rights)

Improving benefits of trade for all

1. Good governance at national level
2. Further reduction of trade barriers
3. Increase in development aid
4. Better international cooperation and global governance

Introduction to International Law

International Law
- Traditional Definition: Body of rules and principles of action, which are binding upon
civilized states in their relation with one another
 - Modern Definition: International law deals with the conduct of states and of
international organizations and with their relations inter se, as well as, with some of
their relations with persons, whether natural or juridical.

Public and Private International Law

Public Law – governs the relationship between and among states and their relations
with international organization and individual persons.
Private Law – domestic law with cases where foreign …

Sources of International Law

- Article 38 of the International Court of Justice (ICJ) is recognized as the most
authoritative and complete statement as the source of international law.
o ICJ – juridical organization of the UN
- Article 38 is primarily a directive to the count on how to resolve conflicts brought before
them. E.g. Whaling in Japan and China
Treaty – binding international agreement
Customary Law – opinio juris (the belief that an action was carried out as a legal obligation)

Sources of International Law (Article 38 (I), ICJ)

Equal:
1. International Conventions (treaty), whether general or particular, establishing rules
expressly recognized by the context states
2. International Customs
3. General Principle of Laws
Subsidiaries:
4. Juridical Decisions and Teachings of the Most Highly Qualified Publicists

Treaties – an international agreement concluded between states in written form and governed
by international law, whether embodied in…

Elements of Treaties
- Concluded between states
- Written
- International law

Various Names of Treaties

- Conventions, pacts, charters, protocol, concordat, modus vivendi, etc.

Types of Treaties
Bilateral Treaties- bilateral treaties are negotiated between a limited number of states,
most commonly only two, establishing legal rights and obligations between these two states
only
Multilateral Treaties – agreements between two or more parties. They are often the result of
an international conference or a gathering of notions under the auspices of an international
organization. This type of treaty is either law creating or norm-codifying.

International Court of Justice (ICJ) - disagreements between states

International Criminal Court (ICC) - human rights

Philippines Rule on Treaties

- Article VIII Section 21 – No treaty or international agreements shall be void and effective
unless concurred in by at least two-thirds of all the members of the senate. (for ratifying
treaty only)
Department of Trade and Industry (DTI)
Department of Foreign Affairs (DFA)

Legislative must ratify concur what executive (President – head of state) treaties done
Judiciary – determines whether treaty is valid or constitutional
Good Faith – obligations of complying with treaties should be done in good faith
Article VIII Section 20 – monetary board should concur with monetary loans

Customary International Law

- Elements
o State practice
§ Duration (no set duration for norm to become a custom; short duration –
9/11 bombing caused banning of terroristic acts as it was not something
concerned with before and now considered a custom, long duration –
environmental law)
§ Uniformity/consistency
§ Generality – common and widespread among states
o Opinio Juris (states have a belief/impetuous to act a certain way)
§ Physiological element of custom
• Subjected elements e.g. (everyone’s doing is)
Generally Accepted Principles of International Law
- Due process
- Equity
- Prescription e.g. (if you sleep on rights not allowed to do so anymore)

Jus cogens
- Non-derogatory of international law
- Most sacred rule of law in general
- E.g. right of life, freedom from torture, freedom from cruel human endangerment
- Most sacred norms a country/nation should uphold

Intergenerational Responsibility
- Cited in 1992
 - Cited internationally
Highly Qualified Publicists
- Author related in that subject matter

Subjects of International Law

International Organizations – given status by international law
WTO – World Trade Organization
Regional Organization
EU – European Union
-special customs nation
-same single market approach
NGO – starting to have legal standing internationally

Hierarchy of Courts
- Supreme Court
- Court of Appeals
- Regional Trial Courts

Obligations
- Subjects
o Active (obligee; creditor)
o Passive (obligor, debtor)
- Objects
- Juridical Necessity

The Law of WTO (Chapter 2)

Parts of International Economic Law

- International Trade
- International Investment
- International Development
Why have rules?
- A rules-based over power-based approach
Need for international rules
- Why is there a need to regulate trade?
o Restrain countries from taking trade-restrictive measures
o Securing trade and predictability
o Protection and Promotion of Social Values
o Harmonization
o Greater measure of equity
Basic WTO Rules
1. Rules on Non Discrimination
a. Most Favored Nation (MFN) Treatment Obligation
 i. Requires a WTO Member that grants certain favorable treatment to any
given country to grant the same favorable treatment to all other WTO
Members.
b. National Treatment Obligation
i. Requires a WTO Member to treat foreign products, services, and service
suppliers no less favorably than it treats “like” domestic products and
services.
2. Rules of Market Access
a. Rules on Custom Duties
i. Not prohibited
ii. Legitimate Trade Policy Instrument
iii. Schedule of Concentrations
b. Rules on Other Duties and Financial Charges
c. Rules on Quantitative Restrictions
d. Rules on Other Non-Tariff Barriers
i. Lack of transparency of trade regulations
ii. Arbitrary application of rules
iii. Technical barriers to trade
iv. Sanitary and phytosanitary measures
3. Rules on Unfair Trade
a. Dumping
b. Subsidies
i. Countervailing duties
4. Rules on Conflict Between Trade Liberalization and Other Societal Values and Interests
a. Economic Interests
i. Protection of domestic industry
ii. Safeguard balance of payments
iii. Pursuit of regional economic integration
b. Non-economic Values
i. Environment
ii. Public Health
iii. Public morals
iv. National Treasure
v. National security
c. Special and Differential Treatment to Developing Countries
5. Institutional and Procedural Rules
a. WTO Decision-Making
b. Trade Policy Review
c. Dispute Settlement

Class Notes:
WTO – operational on January 1, 1995