Xi’an Jiaotong University School of Law

Issues in International Economic Law

Course 1 General Introduction on

International Economic Law

Du Juan
Assistant Professor
Fiona.sriicl@xjtu.edu.cn
 I. General Introduction
II. Different scholarships on IEL
III. Sources of International Economic Law
Contents
IV. Basis of International Economic Law
V. The Participants and their Role in the
development of IEL
 I. General Introduction

Defining International Economic Law:

At a preliminary level, the process of defining IEL involves mainly
two questions:

 1. What system of law or systems of law are involved?

 2. What is the content of IEL?
 I. General Introduction

1. The system or systems of Law?

At first sight there appears to be two conceptions of IEL:

(1) A branch of Public International Law (the narrow definition)
(2) All branch of law concerned with economic phenomena of
international concern (the broader definition)

There is in fact no fundamental difference to the extent that they

converge.
 I. General Introduction
2. The content of International Economic Law?

Non-exhaustive list of topics within international economic law:

(1) International Trade Law, including both the international law of the World
Trade Organization and GATT and domestic trade laws;
(2) International Economic Integration Law, including the law of the European
Union, NAFTA;
(3) Private International Law, including international choice of law, choice of
forum, enforcement of judgments and the law of international commerce;
(4) International Business Regulation, including antitrust or competition law,
environmental regulation and product safety regulation;
(5) International Financial Law, including private transactional law, regulatory law,
the law of foreign direct investment and international monetary law, including
the law of the International Monetary Fund and World Bank;
(6) The role of law in development;
(7) International tax law;
(8) International intellectual property law.
 I. General Introduction

3. The definition of International Economic Law

International economic law regulates the international economic
order or economic relations among nations. However, the term
“international economic law” encompasses a large number of
areas.

It is often defined broadly to include a vast array of topics ranging

from public international law of trade to private international law
of trade to certain aspects of international commercial law and
the law of international finance and investment.
CPTPP ： a vast array of topics
CPTPP ： a vast array of topics
 I. General Introduction

4. IEL regulates three types of legal relations:

 Transnational transactions of equal civil and commercial

subjects
 Regulation of transnational economic activities by sovereign
states
 International coordination of regulatory activities for
transnational economic activities
 II. Different scholarships on IEL

Due to the different understanding of international economic relations

and the role of international economic law and its position in the overall
legal system, there are different doctrines on the definition and role of
international economic law in domestic and international academic
circles. In summary, there are three main doctrines:

 International law of the economy

 International economic law
 The law of the international economy
 II. Different scholarships on IEL
 International law of the economy 经济的国际法

“International economic law regulates the economic relations between

the traditional subjects of international law, i.e. states and international
organizations. While traditional international law mainly regulates
political and diplomatic relations between states, the growing number of
legal norms regulating economic relations between states has led to the
formation of a new branch of international law - international economic
law.”
International economic law as part of public international law

Representative figures:
1. UK: Georg Schwarzenberger, "The Scope and Labelling of International
Economic Law", "The Economic Order of the Century - Key Issues in
International Economic Law".
2. Japan: 金泽良雄
 II. Different scholarships on IEL

 International economic law 国际的经济法

“By international economic law, we mean the extension of the

scope of domestic economic law to the international level.”

“International economic law should also establish a legal

system for maintaining a competitive order in the international
or world market with the aim of maintaining a fair and free
competitive order. Moreover, international economic law is
distinct from international trade law, and the relationship
between them is similar to that between domestic civil and
commercial law and economic law.”

Representative figure: Japan 丹宗昭信

 II. Different scholarships on IEL
 The law of the international economy 国际经济的法

“The so-called law of the international economy asserts that

international economic law is the legal norm that regulates all
international economic activities, regardless of whether the subject of
the act is a state, an international organization or an individual. Thus,
international economic law is the general term for the legal norms that
regulate all economic activities and economic relations that occur across
national borders in an international context. It should constitute an
independent legal institution in itself, including not only the norms of
international law, but also the domestic law of each country that relate
to the foreign economy.”

Representative figure:
John Jackson, Lowenfield, 姚梅镇，陈安， Jessup (Transnational law)
 III. Sources of International Economic Law

Statute of the International Court of Justice

Article 38
1. The Court, whose function is to decide in accordance with
international law such disputes as are submitted to it, shall apply:
a. international conventions, whether general or particular,
establishing rules expressly recognized by the contesting states;
b. international custom, as evidence of a general practice
accepted as law;
c. the general principles of law recognized by civilized nations;
d. subject to the provisions of Article 59, judicial decisions and the
teachings of the most highly qualified publicists of the various
nations, as subsidiary means for the determination of rules of law.
 III. Sources of International Economic Law

1. Conventional International Economic Law

IEL derives mainly from agreements arrived at between States,

either on a bilateral, regional or multilateral level.

A number of problems that characterize this source of IEL:

 The co-ordination of obligations from bilateral, regional or

multilateral arrangements;
 The process of interpreting international economic agreements
can involve particular difficulties;
 The questions relating to the reception of international
economic agreements into domestic law.
 III. Sources of International Economic Law

2. Customary International Economic Law

At one level Customary International Law provides the foundations

and the background for the institutions of international economic
relations.

 Freedom of the high seas

 Diplomatic protection and international claims
 The principle of pacta sund servanda
 The standards in relation to the treatment of aliens
 ……

State treaty practice in the economic field and the practice of

international economic organization can give rise to the formation
of Customary IEL.
 III. Sources of International Economic Law

3. General Principle of Law

The importance of this source to IEL was considered at one time

even more limited to that of Customary IEL.
 III. Sources of International Economic Law

4. Soft Law

At its core, it refers to “rules” that command respect, but are

either not strictly formulated, and/or not strictly enforceable.

Soft law is not legally binding. It is an expression of a preference.

Non-compliance is not considered a violation, although
compliance with it endows the relevant conduct with legitimacy.
However, failure to observe can lead to certain consequences.
 III. Sources of International Economic Law

4. Soft Law

Soft law has been described as having any one

or more of the following elements:
 Vagueness;
 Imprecision;
 Recommendatory language;
 Strictly formulated obligations in a binding
instrument but undermined by exceptions;
 Strictly formulated obligations but contained
in recommendatory non-binding instruments

E.g., General Assembly Resolution, Guidelines

and codes of Conduct
 III. Sources of International Economic Law

5. The subsidiary means for the determination of IEL

The sources of IEL may be determined by judicial decisions and

the teachings of the most highly qualified publicists of various
nations.

Judicial decisions include those of national and international

courts.
 IV. Basis of International Economic Law

International economic law is based on the traditional principles

of international law such as:
 pacta sunt servanda
 freedom
 sovereign equality
 reciprocity
 economic sovereignty

It is also based on modern and evolving principles such as:

 the duty to co-operate
 permanent sovereignty over natural resources
 preferential treatment for developing countries in general and
the least-developed countries in particular
 IV. Basis of International Economic Law

Fundamental principles of international economic law:

Charter of Economic Rights and Duties of States (CERDS) of 1974
Chapter 1 of the Charter outlines the fundamentals of international
relations in the following words:

Economic as well as political and other relations among states shall be

governed, inter alia, by the following principles:

(a) Sovereignty, territorial integrity and political independence of States;

(b) Sovereign equality of all States;
(c) Non-aggression;
(d) Non-intervention;
(e) Mutual and equitable benefit;
(f) Peaceful coexistence;
(g) Equal rights and self-determination of peoples;
 IV. Basis of International Economic Law

Fundamental principles of international economic law:

Charter of Economic Rights and Duties of States (CERDS) of 1974

Economic as well as political and other relations among states shall be

governed, inter alia, by the following principles:

(h) Peaceful settlement of disputes;

(i) Remedying of injustices which have been brought about by force and
which deprive a nation of the natural means necessary for its normal
development;
( j) Fulfillment in good faith of international obligations;
(k) Respect for human rights and international obligations;
(l) No attempt to seek hegemony and spheres of influence;
(m) Promotion of international social justice;
(n) International co-operation for development;
(o) Free access to and from the sea by land-locked countries within the
framework of the above principles.
 IV. Basis of International Economic Law

Fundamental principles of international economic law:

Charter of Economic Rights and Duties of States of 1974

Articles 1, 2, 4 and 5 outline the economic rights and duties of

states in a more concrete manner:

Article 1
Every State has the sovereign and inalienable right to choose its
economic system as well as its political, social and cultural
systems in accordance with the will of its people, without outside
interference, coercion or threat in any form whatsoever.
 IV. Basis of International Economic Law

Fundamental principles of international economic law:

Charter of Economic Rights and Duties of States of 1974

Article 2
1. Every State has and shall freely exercise full permanent
sovereignty, including possession, use and disposal, over all its
wealth, natural resources and economic activities.

2. Each state has the right:

(a) To regulate and exercise authority over foreign investment
within its national jurisdiction in accordance with its laws and
regulations and in conformity with its national objectives and
priorities. No State shall be compelled to grant preferential
treatment to foreign investment;
 IV. Basis of International Economic Law

Fundamental principles of international economic law:

Charter of Economic Rights and Duties of States of 1974

Article 2
2. Each state has the right:
(b) To regulate and supervise the activities of transnational
corporations within its national jurisdiction and take measures to
ensure that such activities comply with its laws, rules and
regulations and conform with its economic and social policies.
Transnational corporations shall not intervene in the internal
affairs of a host State. Every State should, with full regard for its
sovereign rights, cooperate with other States in the exercise of
the right set forth in this subparagraph;
 IV. Basis of International Economic Law
Fundamental principles of international economic law:
Charter of Economic Rights and Duties of States of 1974

Article 2
2. Each state has the right:
(c) To nationalize, expropriate or transfer ownership of foreign
property, in which case appropriate compensation should be
paid by the State adopting such measures, taking into account
its relevant laws and regulations and all circumstances that the
State considers pertinent. In any case where the question of
compensation gives rise to a controversy, it shall be settled
under the domestic law of the nationalizing State and by its
tribunals, unless it is freely and mutually agreed by all States
concerned that other peaceful means be sought on the basis of
the sovereign equality of States and in accordance with the
principle of free choice of means.
 IV. Basis of International Economic Law
Fundamental principles of international economic law:
Charter of Economic Rights and Duties of States of 1974

Article 4
Every State has the right to engage in international trade and
other forms of economic cooperation irrespective of any
differences in political, economic and social systems. No State
shall be subjected to discrimination of any kind based solely on
such differences. In the pursuit of international trade and other
forms of economic cooperation, every State is free to choose the
forms of organization of its foreign economic relations and to
enter into bilateral and multilateral arrangements consistent with
its international obligations and with the needs of international
economic cooperation.
 IV. Basis of International Economic Law
Fundamental principles of international economic law:
Charter of Economic Rights and Duties of States of 1974

Article 5
All States have the right to associate in organizations of primary
commodity producers in order to develop their national
economies, to achieve stable financing for their development
and, in pursuance of their aims, to assist in the promotion of
sustained growth of the world economy. In particular
accelerating the development of developing countries.
Correspondingly, all States have the duty to respect that right by
refraining from applying economic and political measures that
would limit it.
 V. The Participants and their Role
in the development of IEL

The participants in IEL are those entities which have economic

rights and duties under the international economic system.

The entitlements involve for example:

 Being able to enter into international economic agreements
 Being able to enforce international economic agreements
 Becoming beneficiaries of international economic agreements
 Being able to participate in dispute settlement mechanisms
involving economic rights
 V. The Participants and their Role
in the development of IEL

There are mainly three participant: States, international

economic organizations, individuals.

IEL concerns itself in varying degrees with the relationships:

 between State participants
 between individual participants
 between the State and the individual
 between the State and international economic organizations
 between international economic organizations
 V. The Participants and their Role
in the development of IEL

States:
The manner in which States have participated in the development of IEL
is varied:

 First, States have formed informal economic groupings wherein

important consultations take place and from which important
initiatives can arise.
 Second, States also operate through what have been described as
informal “governmental networks”.
 Third, States operate through more formal institutions such as OECD
and UNCTAD representing broadly developed and developing
country interests.
 Finally, some States operate in international economic organizations
by unilaterally giving to their membership rights a kind of a gloss.
 V. The Participants and their Role
in the development of IEL

International economic organizations:

The organizations have played their role in the development of

IEL in two principal ways:

 First, some of them have critically provided basic

constitutional frameworks in specific fields of international
economics.

 Second, the international economic

organizations have either played a
direct legislative function or have
contributed to it over a period of
time.
 V. The Participants and their Role
in the development of IEL

Individuals:

Individuals here include corporate entities.

Individuals are participants not only because they are the

ultimate beneficiaries of the system, but also because they have
rights and duties conferred upon them directly.
 V. The Participants and their Role
in the development of IEL

Non-governmental organizations (NGOs):

Through the participation of NGOs, international economic

organizations can be made more responsive, representative and
effective.

 NGOs represent communities of interest cutting across

jurisdictions, and thus increase representation in international
economic organizations.
 NGOs are able to draw attention to trans-boundary problems
which governments sometimes fail to address.
 NGOs provide good competition for governments in policy
analysis and advice.
 NGOs also act as watch dogs over governmental practices in
international organizations
Key Points:

1. The content and definition of IEL

2. The Sources of IEL
3. Fundamental principles of IEL
4. The main participants in the development of IEL