25-1

Chapter 54

International and

World Trade Law

Learning Objectives

Describe the U.S. government’s power under the Foreign Commerce Clause and Treaty Clause of the U.S. Constitution

Describe a nation’s court jurisdiction over international disputes

Describe the functions and governance of the United Nations

2

Learning Objectives

Describe the North American Free Trade Agreement (NAFTA) and other regional economic organizations

Describe the World Trade Organization (WTO) and explain how its dispute-resolution procedure works

3

The United States and Foreign Affairs

The U.S. Constitution divides the power to regulate the internal affairs of this country between the federal and state governments

Two constitutional provisions: Foreign Commerce Clause Treaty Clause

4

Foreign Commerce Clause

Vests Congress with the power “to regulate commerce with foreign nations”

Any state or local law that unduly burdens foreign commerce is unconstitutional, in violation of Foreign Commerce Clause

5

Treaty Clause

States that the president “shall have power, by and with the advice and consent of the Senate, to make treaties, provided two-thirds of the senators present concur”

Only the federal government can enter into treaties with foreign nations

6

Treaty Clause

Treaty: agreement or contract between two or more nations that is formally signed by an authorized representative and ratified by each nation

Bilateral treaty: between two nations Multilateral treaty: involves more than two nations Convention: treaty sponsored by an international

organization

7

United Nations(UN)

International organization created by multilateral treaty in 1945

Headquartered in New York City Goals of the United Nations:

Maintain peace and security in the world Promote economic and social cooperation Protect human rights

8

Governance of the United Nations

General Assembly Legislative body that is composed of all UN

member nations Adopts resolutions concerning human rights, trade,

finance, and economics

9

Governance of the United Nation

Security Council Composed of 15 member nations

Five permanent members (China, France, Russia, The U.K., The U.S.) Ten members selected for two-year terms

Primarily responsible for maintaining international peace and security

Has authority to use armed forces

10

Governance of the United Nations

Secretariat Administers the day-to-day operations of the UN Headed by the Secretary-General, who is elected

by the General Assembly Refer matters that threaten international peace and

security to the Security Council Help solve international disputes

11

UN Agencies

United Nations Educational, Scientific, and Cultural Organization(UNESCO)

United Nations Children’s Fund(UNICEF) International Monetary Fund(IMF) World Bank International Fund for Agricultural Development

(IFAD)

12

UN Agencies

International Monetary Fund(IMF): promote sound monetary, fiscal, and macroeconomic policies worldwide by providing assistance to needy countries

World Bank: provide money to developing countries to fund projects for humanitarian purposes and to relieve poverty

United Nations Children’s Fund(UNICEF): provide aid to improve the lives of the world’s children

13

International Court of Justice

Judicial branch of the United Nations Also called the World Court Located in The Hague, the Netherlands Only nations can have cases decided by this court Cases involving treaties and the UN Charter

14

European Union (EU)

Comprised of many countries of Western and Eastern Europe

Created to promote: Peace and security Economic, social, and cultural development

Euro: A single monetary unit that has been adopted by many countries of the EU that comprise the eurozone

15

EU Administration

Council of Ministers composed of representatives from each member country

Coordinate efforts to fulfill objectives of the treaty European Union Commission have authority to enact

legislation and to take enforcement actions to ensure member compliance with the treaty

EU treaty promotes trade by providing for the free flow of capital, labor, goods, and services among member nations

16

North American Free Trade Agreement (NAFTA)

Treaty signed by the U.S., Canada, and Mexico Eliminates or reduces most of the duties, tariffs,

quotas, and other trade barriers between the members A country can reimpose tariffs if an import surge

from one of the other nations hurts its economy or workers

Special protection for favored industries

17

Other Regional International Organizations

Association of Southeast Asian Nations (ASEAN) Organization of the Petroleum Exporting Countries

(OPEC) Dominican Republic-Central America Free Trade

Agreement (DR-CAFTA)

18

World Trade Organization (WTO)

Successor to the General Agreement on Tariffs and Trade (GATT)

International organization of 153 member nations Headquartered in Geneva, Switzerland Promote and enforce trade agreements among

member nations Lower trade barriers and revised trade rules Solves trade disputes among nations

19

WTO Dispute Resolution

WTO panel: Body of three WTO judges that hears trade disputes between member nations and issues panel reports

WTO dispute settlement body: composed of one representative from each WTO member nation that reviews panel reports

WTO appellate body: panel of seven judges selected from WTO member nations that hears and decides appeals from decisions of the dispute-settlement body

20

National Courts and International Dispute Resolution

National courts: courts of individual nations Primarily deals with commercial disputes between

private litigants Commercial disputes between U.S. companies and

foreign governments or parties may be brought in U.S. District Court

21

Judicial Procedure

Choice of forum clause: designates which nation’s court has jurisdiction to hear a case arising out of the contract

Choice of law clause: designates which nation’s laws will be applied in deciding a dispute arising out of the contract

22

Act of State Doctrine

Judges of one country cannot question the validity of an act committed by another country within that other country’s borders

Based on the principle that a country has absolute authority over what transpires within its own territory

23

Case 54.1: Act of State Doctrine

Case Glen v. Club Mediterranee, S.A. 450 F.3d 1251, Web 2006 U.S. App. Lexis 13400 (2006) United States Court of Appeals for the Eleventh District

Issue Does the act of state doctrine bar recovery by the

Glens?

24

Doctrine of Sovereign Immunity

Countries are granted immunity from suits in courts in other countries

Foreign Sovereign Immunities Act(FSIA) Governs suits against foreign nations that are

brought in federal or state courts in the United States

Codifies the principle of qualified, or restricted, immunity

25

Exceptions to the FSIA

The foreign country has waived its immunity, either explicitly or by implication

Commercial activity exception states that a foreign country is subject to lawsuit in

the U.S. if it engages in commercial activity in the U.S. or if it carries on such activity outside the U.S. but causes a direct effect in the U.S.

26

International Religious Laws

Jewish Law and the Torah Islamic Law and the Qur’an Christian and Canon Law Hindu Law and Dharmasastra

27

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 28