INTERNATIONAL TRADE AND INVESTMENT

LAW I

IRENE CHIAKI KORLEY-AYERTEYE

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 NATURE OF
INTERNATIONAL
TRADE LAW
What Is International Trade?
 International Trade is selling or buying goods and
services across an international border.
 It is the exchange of goods and services between
countries.
 In simple words, it means the export and import of
goods and services.
 Export means selling goods and services out of the
country, while import means goods and services flowing
into the country.
 Both the private sector and government engage in
Trade has been carried on across national
boundaries since ancient times.
However, in modern times the volume of
international trade has increased drastically.
Particularly, since the Second World War,
communications and transport have improved,
leading to a great expansion in international trade.
What Is International Trade Law?
International Trade and Investment law provides a
framework for understanding the massive growth in
international trade, the explosion of information
technology, and the economic interdependence of
nations.
In the world of trade, there is a business
relationship between nations.
This relationship is seen in the area of the laws that
regulate international trade, such as the World Trade
Organization (WTO).
‘Inter’ is the Latin word for ‘between nations’, i.e.
trade between nations.
Trade is the exchange of goods, services, and
technology for profit.
Law is simply the regulation of the conduct of the
parties.
International trade law, can therefore, be defined as
the regulation of the conduct of parties involved in
the exchange of goods, services, and technology
between nations.
International trade law covers an enormous scope of
activities relating to the agreement for the sale of
goods, the terms of the carriage, quality and
quantity, insurance, as well as intellectual property
issues.
'International trade law' refers to the law which
applies to international trade transactions.
It is the trade, not the law, which is international.
International trade law, is 'pure' commercial law.
There is no direct consumer involvement and it is
assumed that the parties engaged in international
trade have sufficient commercial experience and
bargaining power to look after their own interests.
Public and Private International Trade Law
International trade law is commonly described as
public or private.
Public international trade law is the regulation of
conduct in commerce between nations.
“State” is used to refer to national governments.
Private international trade law is the regulation of
conduct between private traders in different
states.
The modern development is that the distinction
between public and private international trade law
has less meaning.
For instance, a World Trade Organization (WTO)
agreement is public, but immediately translates into
private issues such as tariffs, dumping, and taxes.
Sources of International Trade Law
 The law governing international trade is derived
from various sources:
Article 38(1) (a-d) of the International Court of
Justice (ICJ) Statute
Agreement Between States
 These are known as treaties or conventions.
 They are the closest international equivalent to
legislation in domestic legal systems.
A treaty is defined under Article 2 of the Vienna
Convention on the Law of the Treaties, 1969, as
an agreement whereby two or more States
establish or seek to establish a relationship between
them governed by international law.
Treaties can be bilateral or multilateral, that is,
between two states or between more than two
states
 For example, Ghana and Nigeria are expected to
sign 9 bilateral agreements that are intended at
deepening cooperation between both countries.
 Multilateral conventions are mostly developed
through international organizations such as the
United Nations (UN).
 A UN convention applies only to those states that
have signed the convention and ratified it by
enacting domestic legislation, consistent with the
convention, and depositing the instrument of
ratification with the Secretary General.
Once the convention is ratified, it becomes part of
the state’s domestic law and its application in that
state would depend to a large extent on domestic
jurisprudence.
International treaties and foreign laws do not
operate within the state’s territory unless that state
allows it.
A state may adopt a treaty with specific
reservations, unless this is prohibited in the treaty
itself, or unless the reservations are generally
incompatible with the object and purpose of the
treaty.
Customary International Law
 This includes trade customs and usages which
have developed over time as standards in trading
relationships.
 The body of lex mercatoria is the general
principles of usages and customs among
international traders.
 It developed from the law merchant and is
comprised of any general aspect of international
trading which has been used, accepted, and
recognized by traders over a period of time.
These are not fixed, and would depend on the
practices between international traders and the time
under consideration.
They also vary from place to place, and therefore it
is very difficult to see the lex mercatoria as a body
of law for international trade, because it is neither
comprehensive nor of universal application.
Generally Recognized Principles of Law
These are principles of law recognized through
national legal systems around the world.
The procedures and legal principles held in common
by the civil and common law systems fit into this
category, such as good faith, and pacta sunt
servanda, that is to say a contract would be enforced
according to its terms as well as the obligation to
mitigate damage.
A major underlying principle is good faith.
The duty of good faith is basically a duty to act
properly and in good conscience.
In practice, the duty of good faith provides
contracting parties with a broad ground for opting
out of the contract by ignoring individual terms and
arguing that there has been a breach of good faith
which affects the whole of the contract such that it
should be set aside.
Previously Decided Cases and Academic Writings
 Whilst not a strict doctrine of precedents as in the
common law systems, it is consistent with the
objective of uniformity of interpretation that
previous decisions be considered.
 Previous arbitral awards would be considered by
arbitrators and previous judicial decisions would be
considered by national courts.
 The writings of leading academics are also
considered of some importance as a form of expert
commentary on the state of the law in a particular
area.
Agreement Between Traders

 This is known as the principle of party autonomy,

that the traders should be free to contract on their
own terms and to decide how disputes between
them should be settled, and according to what law.
 This principle is considered vital in international
trade.
 However, its application tends to be somewhat
restricted.
 Any contract of sale, regardless of its terms, cannot
exist independently of national law.
Domestic Law
 The reality in many transactions is that if a particular issue
is not settled by an international convention, a generally
recognized practice or principle, or by a specific term in
trade contract, then domestic law is applicable.
 In the case of Clark King & Co. Pty Ltd v Australian
Wheat Board Ltd (1978), the wheat growers argued that the
monopoly of the Wheat Board was unconstitutional.
 In addition to this, state laws of procedure may apply to
regulate the conduct of the litigation.
 The law is that, when an international convention
conflicts with a state law the law of the state shall
override the convention.
Ghana International Trade Commission Act,
2016(Act 926)
 The Ghana International Trade Commission
was established by an Act of Parliament in
September 2016 to regulate Ghana's international
trade architecture in conformity with the rules and
regulations of the World Trade System and to
provide for related matters.
International Trade Organisations
Inter-governmental organisations (IGOs)
 These organisations are created by two or more
states to pursue common interests as an entity
separate from its members.
 A charter is formed which sets the objectives,
functions, and structure of the organisation. E.gs.
 United Nations (UN)
 Economic Community of West African States
(ECOWAS)
The European Union (EU)
Other International organisations
These organisations coordinate the interests of
private national groups.
Examples include:
The international Chamber of Commerce (ICC)
The International Bar Association (IBA)
the International Air Transport Association (IATA).
The World Trade Organisation (WTO)
Why the need for International Trade
Countries engage in international trade, because
there are not enough resources or capacity to meet
the domestic demand.
So, by importing the needed goods, a country uses
its domestic resources to produce what they are
good at.
Then, the country can export the surplus in the
international market.
Importance of International Trade
It makes use of abundant raw materials
Some countries are naturally abundant in some raw
materials, e.g. oil (Qatar), metals, fish (Iceland),
diamonds (Congo), Butter (New Zealand), Cocoa,
Gold (Ghana).
Without international trade, other countries would
not benefit from the natural endowments of raw
materials from these countries and vice versa.
 It leads to global growth and economic development

 International trade is an important factor in

promoting economic growth globally.
 This growth has led to a reduction in absolute
poverty levels in many countries.
It gives greater choice for consumers
 A driving factor behind international trade is giving
consumers greater choice of different products.
 For example, BMW cars are imported from
Germany, not because they are the cheapest but
because of the quality and brand image.
It brings in Foreign Direct Investment
By exporting its own goods and services, a country
can earn income necessary to finance the acquisition
of goods and services which it cannot produce at
home and must import.