International Trading

International Black Sea University

Legal Environment of BusinessBusiness Management Faculty ,

By: Nino Bazhunaishvili

Contents

International trade International trade law Overview Lex mercatoria & Lex maritima WTO - Scope of WTO Principles of WTO

Largest countries by total international trade Importance of international trade INCOTERMS in international trade Rules for any modes of transport Rules for sea and inland waterway transport Allocations of costs buyer/seller according to

Incoterms 2010

International trading

International trade - Is the exchange of capital, goods and services across

international borders.

International trade (Cont.)

Industrialization

Advanced transportatio

n

Multinational

corporation

International trade law

• International trade law includes the appropriate

rules and customs for handling trade between countries.

• This branch of law is now an independent field of study as most governments has become part of the world trade, as members of the (WTO).

Overview

• International trade law should be distinguished from the broader field of International economic law.

The body of rules for transnational trade derives from medieval commercial laws

Lex marcatoria

Lex maritima

Overview (Cont.)

• International Trade Law is an aggregate of legal rules of “international legislation” and new lex mercatoria, regulating relations in international trade.

• .“International legislation” – international treaties and acts of international intergovernmental organizations regulating relations in international trade. 

lex maritima 

lex mercatoria 

W T OIn 1995, the WorldTrade Organization,

a formal international organization to regulate trade, was established. It is the most important development in the history of international trade law.

Scope of WTO :

a)provide framework for administration and implementation of agreements;

b)forum for further negotiations; c) trade policy review mechanism

andd)promote greater coherence among

members economics policies

Principles of the WTO:

• (a) principle of non-discrimination (most-favoured-nation treatment obligation and the national treatment obligation)

• (b) market access (reduction of tariff and non-tariff barriers to trade)

• (c) balancing trade liberalisation and other societal interests

• (d) harmonisation of national regulation (TRIPS agreement, TBT agreement, SPS agreement)

Largest countries by total international trade

Rank Country

International

Trade of Goods

(Billions of USD)

Date of

information

- World 36,534.0 2012 est.

- European Union 4,468.6 2012 est.

1 United States 3,882.4 2012 est.

2 China 3,866.9 2012 est.

3 Germany 2,575.7 2012 est.

4 Japan 1,684.4 2012 est.

5 Netherlands 1,247.4 2012 est.

6 France 1,243.9 2012 est.

7 United Kingdom

1,149.4 2012 est.

8 South Korea 1,067.5 2012 est.

9 Italy 986.9 2012 est.

10 Hong Kong 947.9 2012 est.

11 Canada 917.3 2012 est.

12 Belgium 882.0 2012 est.

13 Russia 864.7 2012 est.

14 Singapore 788.1 2012 est.

15 India 779.4 2012 est.

16 Mexico 751.4 2012 est.

17 Spain 624.9 2012 est.

18 Taiwan 571.8 2012 est.

19 Saudi Arabia 529.8 2012 est.

20 Australia 518.2 2012 est.

International Trade of Services

Rank Country International Trade of Services(Billions of USD)Date ofinformation

- World 8,452.6 2012 est.- European Union 1,465.8 2012 est.1 United States 1,019.7 2012 est.2 Germany 539.7 2012 est.3 China 471.0 2012 est.4 United Kingdom 453.9 2012 est.5 France 379.2 2012 est.6 Japan 313.4 2012 est.7 India 272.8 2012 est.8 Singapore 250.1 2012 est.9 Spain 229.3 2012 est.

10 South Korea 214.2 2012 est.11 Italy 209.1 2012 est.

Importance of International trade• Primary means of realizing the benefits

of globalization• Continuing reallocation of

manufacturing activities.• Intertwined with another elements of

globalization• Trade supported by WTO that creating

a commercial environment more conductive to the multilateral exchange of goods and services.

INCOTERMS in international trade• INCOTERMS are designed to

create a bridge between different members of the industry by acting as a uniform language they can use. The Incoterms® rules are an internationally recognized standard and are used worldwide in international and domestic contracts for the sale of goods. First published in 1936, Incoterms® rules provide internationally accepted definitions and rules of interpretation for most common commercial terms.

RULES FOR ANY MODE OR MODES OF TRANSPORT

RULES FOR SEA AND INLAND WATERWAY

TRANSPORT• FAS Free Alongside Ship• FOB Free On Board• CFR Cost and Freight• CIF Cost, Insurance and

Freight

Allocations of costs buyer/seller according to

Incoterms 2010

Incoterm

2010

Export-

Customs

declaration

Carriage to

port of export

Unloading of truck

in port of

export

Loading

charges in

port of export

Carriage

(Sea Freight/Air

Freight) to

port of import

Unloading

charges in

port of import

Loading on truck

in port of

import

Carriage to place

of destination

Insurance

Import customs

clearance

Import taxes

EXW Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer

FCA Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer Buyer

FAS Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer Buyer

FOB Seller Seller Seller Seller Buyer Buyer Buyer Buyer Buyer Buyer

Incoterm 2010

Export-Custom

s declara

tion

Carriage to

port of export

Unloading of

truck in port of export

Loading

charges in

port of export

Carriage (Sea Freight/

Air Freight) to port

of import

Unloading

charges in

port of import

Loading on

truck in port of import

Carriage to

place of

destination

Insurance

Import custom

s clearan

ce

Import taxes

CFR Seller Seller Seller Seller Seller Seller Buyer Buyer Buyer Buyer

CIF Seller Seller Seller Seller Seller Seller Seller Buyer Seller Buyer Buyer

CPT Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer

CIP Seller Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer

DAT Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer

DAP Seller Seller Seller Seller Seller Seller Seller Seller Buyer Buyer

DDP Seller Seller Seller Seller Seller Seller Seller Seller Seller Seller

Bibliography• http://www.wto.org/english/res_e/statis_e/short_term_stats_e.htm• https://en.wikipedia.org/wiki/International_trade#Largest_countries_

by_total_international_trade• http://www.fita.org/webindex/browse.cgi/International_Trade_Lawyer

s_and_Resources/International_Trade_Law• http://www.worldtradelaw.net/• http://www.uncitral.org/• http://www.uncitral.org/pdf/english/texts/procurem/ml-procurement/

ml-procure.pdf• http://www.lawyers-greece.co.uk/incoterms.html• http://www.foreign-trade.com/reference/incoterms.cfm• http://en.wikipedia.org/wiki/Incoterms• http://www.iccwbo.org/products-and-services/trade-facilitation/incote

rms-2010/• http://www.iccwbo.org/products-and-services/trade-facilitation/incote

rms-2010/the-incoterms-rules/• http://www.acegroup.com/us-en/businesses/incoterms.aspx

Any Question????