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

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

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

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

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

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

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

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

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

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

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)

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

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

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

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

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

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)

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

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

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

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

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

Case 54.1: Act of State Doctrine 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?

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

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.

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

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