International trade law regulates global economic relations and influences the interactions between countries, international organizations, multinational corporations and other commercial players. With globalization, trade now encompasses more than the exchange of goods and services, including investment, technology transfer, digital trade, intellectual property rights and financial transactions. Therefore, international trade law is critical in ensuring fairer, safer and more regulated international trade.
I. Legal Framework of International Trade
The pillars of international trade law include the norms and regulations concerning global trade.
- World Trade Organization (“WTO”): The WTO has served to define commercial rules, settle trade disputes and sustain global trade through comprehensive regulations since 1995. It governs cross-border trade and oversees multilateral trade agreements.
- Bilateral Trade Agreements: Countries conclude bilateral trade agreements to expand global trade and reduce trade barriers. These agreements allow the parties to agree on terms of trade, tariffs, investments, taxation and other trade policies. For instance, countries can adapt to the European Union (“EU”) trade policies with their Free Trade Agreements (“FTAs”) with the EU.
- Intellectual Property Rights: Intellectual property is a significant aspect of international trade. In fact, the smooth functioning of global trade necessitates the protection of intellectual property rights. In this context, the World Intellectual Property Organization (“WIPO”) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”), the most comprehensive international agreement on intellectual property, propose important regulations for intellectual property protection.
- International Payments and Financial Regulations: The financial aspect of international trade involves significant elements such as exchange rates, payment systems, loans and financial guarantees. Trade-related payments and financial transactions shape the global economy and, therefore, need to be regulated. In addition, global financial crises and economic fluctuations necessitate stricter regulations in this field.
II. Unification of International Trade Law
International trade regulations can lead to legal uncertainties and disputes due to differences in countries’ legal systems, cultural norms, economic objectives and commercial development. Since this situation threatens the viability of international trade, the unification of international trade law, i.e. the harmonization of norms and standards for global trade, is a current necessity.
Reducing legal uncertainties, the unification of international trade law will increase the predictability and security of international trade and help settle legal disputes quickly and effectively.
The United Nations Commission on International Trade Law (“UNCITRAL”) has significantly contributed to the regulation of international trade. Adopted on 11 April 1980, the UNCITRAL’s United Nations Convention on Contracts for the International Sale of Goods (“CISG”) offers uniform rules for the sale and purchase of goods between trading countries. The CISG sets an international standard for basic commercial elements such as validity of contracts, delivery of goods, and payment. Ratified worldwide, the CISG plays a critical role in harmonizing the rules of global trade. Moreover, the Convention on the Contract for the International Carriage of Goods by Road (“CMR”) of 19 May 1956 and its Protocol of 5 July 1978 standardize the terms of international road transport and set out requirements for transportation documents and carriers. The UNCITRAL’s United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea of 2008, known as the Rotterdam Rules, also contains crucial regulations. In essence, the Rotterdam Rules propose new rules regarding electronic commerce, carrier’s liability, maritime parties and arbitration.
The UNCITRAL also introduced some model laws to this end, including the Model Law on International Commercial Arbitration, the Model Law on Electronic Commerce, and the Model Law on Electronic Signatures.
The UNCITRAL and the International Institute for the Unification of Private Law (“UNIDROIT”) published legal guides, such as the UNCITRAL’s Legal Guide on International Countertrade Transactions and on Drawing Up International Contracts for the Construction of Industrial Works, and the UNIDROIT’s Guide to International Master Franchise Arrangements.
Apart from regulations, International Commercial Courts and Arbitration Courts are central to the resolution of commercial disputes. Global arbitration rules provide a common framework for trade liberalization and effective dispute resolution. Indeed, the rules proposed by the International Chamber of Commerce (“ICC”), the American Arbitration Association’s International Centre for Dispute Resolution (“ICDR”), and the Singapore International Arbitration Centre (“SIAC”), as well as authorities such as the Singapore International Commercial Court, the China International Commercial Court, and the Netherlands Commercial Court contribute to the unification of international trade law.
III. Conclusion
Unification of international trade law is essential to promote international trade. A uniform international trade law will reassure commercial players by reducing legal uncertainties and help them resolve trade disputes quickly and effectively. While some progress has been achieved in this area, efforts need to be intensified in quantity and quality.
