Session 2

Dr. Solomon Abay

International Economic Law 1
International Economic Law

Introduction

 Chapter 1

 The scope, goal, source and binding nature of international economic law

Dr. Solomon Abay

International Economic Law 2
The Scope of International Economic Law

 Interdisciplinary consideration:
 Legal, Economic, Political, Cultural etc. Dimensions

 Public International Law vs. International Economic Law

 Trade, Monetary, Development/Investment Matters

Dr. Solomon Abay

International Economic Law 3
The Goals of International Economic Law

 Raising living standards, ensuring full employment, facilitating growth in

real income, etc. --- as economic goals

 Engaging in the development process of developing countries --- as

commitment

 Preserving the environment, protecting transnational economic rights as

human right, etc. --- as values

Dr. Solomon Abay

International Economic Law 4
The Sources of International Economic Law
(The Sources in General)

 Formal sources of public international law

 International treaties: bi-lateral, regional, multilateral --- common in
international economic law
 International custom --- marginal in international economic law
 E.g. norms on expropriation, treaty practice of economically powerful states,
common activities of international organizations
 General Principles of Law (when there is harmonization of domestic laws) ---
almost none in international economic law
 Oth e r s
 Soft law
 not binding, expression of preference but influential, diplomatic approach
 International & national judicial decisions, arbitral awards & teachings of the
most highly qualified --- interpretative use only, no case law yet

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International Economic Law 5
The Sources of International Economic Law Contd.
(Relative importance of the sources in international economic law)

 In international trade matters

 Multilateral, bilateral and regional agreements (treaties) are dominant (because of
assumption of equality between states in trade matters)
 In international monetary and development matters
 Multilateral agreements (treaties) and soft law are dominant (because of the weight of
state power in monetary and development relations)
 In international investment matters
 Bilateral agreements (treaties) are dominant (because of the weight of national
sovereignty in regulatory matters)

 In areas where neither multilateral nor bilateral progress exists (e.g. competition,
environment, etc.)
 National laws of economically powerful states are dominant

 General evolution of sources has been:

 from general international law - to bilateral agreements - to multilateral structures

Dr. Solomon Abay

International Economic Law 6
The Sources of International Economic Law Contd.
(Remark)

 Sources have power dimension and strategic aspects

 Sources serve the goals of certain interest groups more than others

 Sources have the following common limitations:

 Lack of coordination
 Conflict
 Varied interpretation
 Varied national reception

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International Economic Law 7
The Binding Nature of International Economic Law

 Consent

 Sanction

Dr. Solomon Abay

International Economic Law 8
International Economic Law

Introduction

 Chapter 2

 The participants in international economic law

Dr. Solomon Abay

International Economic Law 9
The Participants in International Economic Law & the Way They
Influence the System

 States
 Influence through the multilateral international economic organizations
 Influence through state formed informal economic groupings for consultation
 Influence through informal governmental networks (of like minded
governmental departments and agencies)
 Influence through institutions like the OECD (representing developed country
interests) & UNCTAD (representing developing country interests)
 Influence through direct state operation in international organizations (e.g.
US national law requirement on its citizens in international organizations to
promote the US interest irrespective of objectives of the international
organization)

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International Economic Law 10
The Participants … Contd.

 International Economic Organizations

 Type:
 Those with jurisdictions on economic matters alone - the Breton Woods Institutions (IMF, WTO,
World Bank Group)
 Those involved in the economic field along with other matters - the organizations in the UN
system
 Modes of influence
 By setting basic international constitutional frameworks in their respective areas: the Bretton
Woods Institutions
 (Note international agreements, practices that grow to customary international law,
harmonization that grows to general principles of law, soft law, internal administrative
rules, etc.)
 By playing direct legislative function in domestic legislation: the IMF conditionality
 Common Problems
 Lack of coordination
 Absence of narrow specialist approach as international economic relations become global and
diverse
 Undemocratic decision making

Dr. Solomon Abay

International Economic Law 11
The Participants … Contd.

 Individuals & Corporate Entities

 Increasingly pronounced when

 the liberal trade focus emphasizes on individual rights

 International agreements increasingly confer individual rights & duties
 Multinational companies become powerful, and
 Domestic remedies for individuals in relation to internationally arrived at standards
and availability of international dispute settlement mechanisms increase

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International Economic Law 12
The Participants … Contd.

 NGOs
 Advocacy for their increased participation in international economic law in
the name of democracy, i.e.
 representation of community interests across jurisdictions,
 competition with governments in policy analysis, &
 watchdog over governmental practices.
 But, weak participation so far in the Bretton Woods institutions
 participation only for exchange of views and as observers
 Problems
 Questions regarding their representativeness,
 Still affected by the north-south divide,
 NGO’s own interest and agenda that can distort international decision making,
 No need for international participation since NGOs have opportunity to lobby their
interests at the national level

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International Economic Law 13
 Break

Dr. Solomon Abay

International Economic Law 14
International Economic Law

Introduction

 Chapter 3

 The tension between sovereignty and liberalization in international economic law

Dr. Solomon Abay

International Economic Law 15
Relationship between International and National Economic Laws

 Sovereignty
 Territorial Economic Sovereignty

 Extra-territorial Jurisdiction
(State’s interest to:
 acquire wealth and power,
 protect citizens,
 ensure security,
 e tc . )

 Liberalization

Dr. Solomon Abay

International Economic Law 16
International Economic Law

Introduction

 Chapter 4

 The relationship between international, regional and national economic laws

Dr. Solomon Abay

International Economic Law 17
Relationship between International and National Economic Laws

 Explain in terms of:

 The tension between sovereignty and liberalization in international economic law
(Slide 16)

 The relative importance of the sources in international economic law (Slide 6)

Dr. Solomon Abay

International Economic Law 18
Thank You!

Dr. Solomon Abay

International Economic Law 19