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International Law

International law is divided into two kinds – public international law and private international law. Private international law is known as ‘conflict of laws’, and it essentially refers to which country’s law should be applicable to a particular dispute. It is usually deployed by the domestic courts of a country. Public international law concerns the structure and conduct of sovereign states and inter-governmental and international organizations.


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History of Public International Law

Although international law in the modern sense of the word has only existed since about the 16th century, many historians of international law also take ancient history into account as a source for the early development of international legal principles. In that respect, important concepts are derived from the practice between Greek city-states and the Roman law concept of ius civile (which regulated the relationship between Roman citizens mutually) and ius gentium (which regulated the relationship between Roman citizens and non-Roman people). 

Hugo Grotius’ treatise titled De Jure Belli Ac Pacis, authored in 1625, marks the beginning of the modern theory of international law. It dealt with the law of war and peace.  

Beginning with the Peace of Westphalia in 1648, where several European nations signed a peace pact, the concept of the sovereign “nation-state”, which consisted of a nation controlled by a centralized system of government gained a fillip. The existence of several nation states implied the necessity of a body of rules which would govern the conduct amongst them.

The field of study in international law combines two main branches: the law of nations (jus gentium) and international agreements and conventions (jus inter gentes), which have different theoretical foundations and should not be confused.

What are the components of International Law

The sources of international law are custom, treaty, general principles of law (this would include some of the principles recognised in the domestic law of nations, say for example, the recognition that a company has a separate legal existence, equity, good faith, etc.). Further, there is a separate set, known as subsidiary sources, which are opinions of judges in prior cases and opinions of eminent legal scholars as mentioned in their writings.


Treaties are of two kinds – bilateral and multilateral. A bilateral treaty is one concluded between two states only and is also known as a treaty-contract. Double Taxation Agreements are generally bilateral treaties. Multilateral agreements are agreements entered into by several nations, such as the United Nations Agreement, International Covenant on Civil and Political Rights (ICCPR), International Convention of Economic, Social and Cultural Rights (ICESCR), the Refugee Convention, Convention on the International Sale of Goods (CISG) and the Agreement establishing the World Trade Organisation, etc.

In the same way as the provisions of any contract in India are to be interpreted in accordance with the Indian Contract Act, 1872, treaties are to be interpreted in accordance the Vienna Convention on the Law of Treaties (or VCLT), 1969. The Convention entered into force on 27 January 1980.The VCLT has been ratified by 110 nation-states as of October 2009.

International Telecommunications Union

While rules governing the conduct of independent nations inter-se continued to evolve, it was not until the late 1800s that a separate international organisation consisting of various nations as its members was formed. 

The International Telecommunication Union is the eldest organization in the UN family still in existence. It was founded as the International Telegraph Union in Paris on 17 May 1865 and is today the leading United Nations agency for information and communication technology issues, and the global focal point for governments and the private sector in developing networks and services.

Universal Postal Union

Prior to the establishment of the UPU, a country had to conclude a separate postal treaty with each other country that it wished to carry international mail to or from. The Universal Postal Union was created in 1874, under the name “General Postal Union“, as a result of the Treaty of Berne signed on 9 October 1874. Its most important reform was that postal authorities were required to give equal treatment to foreign and domestic mail.

Further, it was not required any more to affix the stamps of any country through which one’s letter or package would pass in transit (this would pose a tremendous problem previously); the UPU provides that stamps of member nations are accepted for the whole international route. 

Its name changed to Universal Postal Union in 1878. After the foundation of the United Nations, the UPU became a specialized agency in the UN. The organisation is headquartered in Berne, Switzerland.

United Nations

The name ‘United Nations’ was devised by the ex-United States President Franklin D. Roosevelt and was used in the “Declaration by United Nations” of January 1, 1942 during the Second World War, when the representatives of 26 countries pledged their governments to continue fighting against the Axis Powers.

The United Nations is the hope and conscience of the world, more especially of the smaller nations among the 192 members. It is an association of states which have pledged themselves to maintain international peace and security and co-operate in solving international political, economic, social, cultural and humanitarian problems towards achieving this end.

The United Nations charter, the constituting instrument of the UN was drawn up by the members of 50 countries at the United Nations Conference on International Organization, which met in San Francisco from April 25, 1945 to June 26, 1945. Those delegates deliberately on the basis of proposals worked out by the representatives of China, The Soviet Union, The United Kingdom and The United States at Dumbarton Oaks, Washington DC from August 21, 1944 to September 28, 1944. The charter was signed on June 26, 1945 by the representatives of 50 countries. 

Poland, which was not represented at the conference signed it later and became one of the original 51 Member States.

The United Nations officially came into existence on October 24, 1945, with the deposit of the requisite number of ratifications of the Charter with the US Department of State. United Nations Day is celebrated on October 24 each year. 

New Member States are admitted by the General Assembly on the recommendations the Security Council. Tuvalu was admitted in September, 2000 as the 189th Member State. East Timor was admitted as a member of the United Nations in September, 2002. Switzerland joined the world organization in the same month.

Montenegro became a United Nations member on June 28, 2006. In 1971, Communist China was admitted as the representative of all China. Red China thus became a permanent member of the security council of the United Nations. Vatican City is a permanent observer.

There are 6 official languages of the United Nations they are Arabic, Chinese, English, French, Russian and Spanish. The flag of the United Nations has an emblem of the United Nations in white centered on a light blue background. The United Nations has its headquarters at New York.

The UN , along with Kofi Annan, the then Secretary General received the Nobel Peace Prize in 2001. Kofi Annan (of Ghana) is the only United Nations Secretary General to be re-elected to the post. Kofi Annan hails from Ghana. The current Secretary-General is Ban Ki-moon of South Korea, who took office on 1 January 2007. His first term will expire on 31 December 2011, and he will be eligible for reappointment

The following are the main organs of the United Nations: General Assembly; Secretariat; Security Council; Trusteeship Council; Economic and Social Council and International Court of Justice. In number the United Nations has 6 main organs.

General Assembly

It consists of the representatives of all the Member States. Each state has one vote but it can send as many as 5 representatives. The General Assembly meets at least once a year and elects its own President and Vice President. The general assembly has its headquarters in New York.

All other bodies of the UN report to the General Assembly. It discusses and makes recommendations on any subject covered under the UN charter except those which the Security Council may be dealing. 

Security Council

It has its headquarters in New York. It consists of 15 members, each of whom has one vote. There are 5 permanent members and 10 non-permanent members elected for a 2 year term by a two-thirds majority of the general assembly. The permanent members have the power to veto any move and the retiring members are not eligible for immediate re-election.

The presidency of the Security Council is held for a one month period in rotation by the Member States in the English alphabetical order of their names. The permanent members of the UN Security Council are: China; France; Russia; USA; UK.

The non-permanent members are: Austria, Japan, Mexico, Turkey, Uganda (All until December 31, 2010), Bosnia and Herzingovina, Lebanon, Brazil, Gabon and Nigeria (until December 31, 2011). The Security Council is responsible for international peace and security. Any nations irrespective of its membership to the UN can put forward its problem in front of the council. The Security Council can suggest a peaceful solution or may use force to restore peace.

The Economic and Social Council

It has 54 members and is responsible under the general assembly for carrying out the functions of the UN with regards to international economic, social, cultural, educational, health and related matters. It has its headquarters at New York and its members are elected by two-thirds majority in the general assembly. One-third of the members are elected every year to serve for a period of three years and one-third of the members retire annually.

The following are the council’s regional economic commissions: Economic Commission of Europe (ECE, Geneva), Economic and Social Commission for Asia and the Pacific (ESCAP, Bangkok), Economic Commission for Latin America and the Caribbean (ECLAC, Santiago), Economic Commission for Africa (ECA, Addis Ababa), Economic Commission for Western Asia (ESCWA, Amman).

Trusteeship Council

The charter of the UN provides for an international trusteeship system to safeguard the interests of the inhabitants of territories that are not fully self-governing and which maybe place there under by individual trusteeship agreements.  The Trusteeship Council has its headquarters in New York.

The membership to the Trusteeship Council include the five permanent members of the Security Council plus those nations who administer Trust Territories All of the original 11 trust territories have become independent or joined independent countries. The Council is presently inactive as there are no trust territories left any more.

International Court of Justice

Also known as the World Court, it is based in the Peace Palace in The Hague, Netherlands. The ICJ was created by an international treaty, the statue of the court which forms an integral part of the UN charter. 

Number of Judges 

The ICJ is composed of fifteen judges elected for nine year terms. Judges serve for nine year terms and may be re-elected for up to two further terms.

Election Procedure: The election is done by UN General Assembly and the UN Security Council from a list of persons nominated by the national groups in the Permanent Court of Arbitration.  

Frequency of Elections: Elections take place every three years, with one-third of the judges retiring (and possibly standing for re-election) each time, in order to ensure continuity within the court. 

Current President: Hishashi Owada of Japan is the current President of the International Court of Justice.

Indians at the ICJ

3 Indians have been permanent judges of the ICJ, as follows:

  1. Benegal Rama Rau (1952-1953)
  2. Nagendra Singh (1973-1988), who was President (1985–1988) and Vice-President (1976–1979).
  3. Pathak Raghunandan Pathak (1989-1991)

Status of Precedents

The law of precedent or stare decisis, whereby a Court relies upon its own prior decisions or the decisions of a judicial body superior to itself, does not apply in the ICJ and the ICJ is not bound to follow what it laid down in its previous decisions. However, the ICJ repeatedly cites principles it has developed in its prior case law, in cases that come before it subsequently.

Jurisdiction of the Court

It gives advisory opinion on legal matters to the bodies and special agencies of the UN and considers the legal matters than are brought before them. All members of the UN charter are ipso facto parties to the Statute of the Court. All questions are decided by majority. The official languages of the court are French and English.

The Secretariat

The Secretariat is composed of the Secretary-General, who is the chief administrative officer of the organization and an international staff appointed by him under regulations established by the General Assembly. However, the Secretary General, the High Commissioner for Refugees and the Managing Director of the Fund are appointed by the General Assembly.

Dr. Asha-Rose Migiro of Tanzania took office as Deputy Secretary General on February 1, 2007 and is the third person to hold this post since it was introduced in 1997. The tenure of the secretariat is five years and is eligible for re-election after expiry of the term. It is the chief administrative office of the UN which coordinates and supervises the activities of the UN.

Trygve Lie of Norway was the First Secretary General of the UN.

The present secretary general of the UN is Ban ki Moon . He hails from South Korea and is also the only Asian to hold the post since 1975.

U.Thant was elected as the 3rd secretary general and he was the first Asian to be appointed for the post in 1961.

Permanent Court of Arbitration (PCA)

The PCA was established by the Convention for the Pacific Settlement of International Disputes, concluded at The Hague in 1899 during the first Hague Peace Conference. The Conference was convened at the initiative of Czar Nicolas II of Russia. The 1899 Convention was revised in 1907 at the second Hague Peace Conference. 110 countries are members of one or both of the founding conventions.

The PCA provides services for the resolution of disputes involving various combinations of states, state entities, intergovernmental organizations, and private parties. Its Secretary General is Christiaan M.J. Kröner.

Special Tribunals

The United Nations established special international criminal tribunals in Rwanda and Yugoslavia to prosecute those responsible for atrocities during times of war and genocide. Successful convictions of these political and military leaders are meant to bring justice to victims and to deter others from committing such crimes in the future. 

International Criminal Tribunal for the Former Yugoslavia, 1991

The Tribunal is a body of the United Nations established to prosecute serious crimes committed during the wars in the former Yugoslavia, and to try their perpetrators. The tribunal is an ad hoc court which is located in The Hague, the Netherlands. It was constitued pursuant to a Security Council Resolution.

International Criminal Tribunal for Rwanda

The International Criminal Tribunal for Rwanda (ICTR), was established in order to judge people responsible for the Rwandan genocide and other serious violations of the international law in Rwanda, or by Rwandan citizens in nearby states, between 1 January and 31 December 1994. 

In 1995 it became located in Arusha, Tanzania (from 2006, Arusha also became the location of the African Court on Human and Peoples’ Rights).  The first trial, of Jean-Paul Akayesu, began in 1997. Jean Kambanda, interim Prime Minister, pleaded guilty. 

International Criminal Court

These special tribunals gave impetus to the formation of the International Criminal Court (ICC), finally established in 2003. The International Criminal Court (ICC) brings to trial those who commit large-scale political crimes – genocide, war crimes and crimes against humanity and the crime of aggression (although it cannot currently exercise jurisdiction over the crime of aggression).

The ICC’s first trial, of Congolese militia leader Thomas Lubanga, began on 26 January 2009. On 24 November 2009 the second trial started, against Congolese militia leaders Germain Katanga and Mathieu Ngudjolo Chui.

As of October 2009, 110 countries have joined the court, including nearly all of Europe and South America, and roughly half the countries in Africa.

Three states — Israel, Sudan and the United States — have “unsigned” the Rome Statute, indicating that they no longer intend to become states parties and, as such, they have no legal obligations arising from their signature of the statute.

The current President of the Court is Sang-Hyun Song, who was elected on 11 March 2009. 

Special Court for Sierra Leone

Sierra Leone suffered through a ten-year civil war, where multiple groups have been alleged to have committed war crimes. The Revolutionary United Front (RUF), led by Foday Sankoh, used amputations and mass rape to terrorize the population and gain control of the country’s lucrative diamond mines. Charles Taylor, then president of neighboring Liberia, backed the insurgency providing arms and training to the RUF in exchange for diamonds.

The pro-government Civil Defense Force (CDF), under the leadership of Sam Hinga Norman, committed serious offenses as well. In 1999 the UN eventually brokered the Lome Peace Accord between the warring parties.

In January 2002 the UN approved the Special Court for Sierra Leone (SCSL) to try those responsible for the crimes committed during the civil war. Based in the country where the atrocities were committed and combining international and domestic law, the SCSL ushers in a new generation of international tribunals. It is believed that this would provide justice faster and at a cheaper cost than its predecessors, the Tribunals for Yugoslavia and Rwanda.

Special Tribunal for Lebanon

The court was established by an Agreement between the United Nations and Lebanon pursuant to a Security Council resolution in March 2006. The Special Tribunal for Lebanon is an international criminal tribunal for the prosecution, under Lebanese law, of criminal acts relating to the assassination of Rafik Hariri on February 14, 2005.

The tribunal marks the first time that a UN-based international criminal court tries a “terrorist” crime committed against a specific person. Antonio Cassese, a noted international criminal lawyer from Italy, was appointed the President of the tribunal on March 24, 2009.

Special Tribunals had also been constituted for Cambodia and East Timor.

Famous International Jurists and the Books authored by them 



International Refugee Law: A Reader by B S Chimni 

International Law And World Order: A Critique Of Contemporary Approaches by B S Chimni

International Commodity Agreements: A Legal Study by B. S. Chimni

Legal regime of the sea-bed and the developing countries by R. P. Anand 

New states and international law by R. P. Anand 

Studies in international adjudication by R. P. Anand 

International law and the developing countries by R. P. Anand 

International Criminal Law and Human Rights – Manoj Kumar Sinha

Charter of the United Nations – Bruno Simma

International Law and the Use of Force by States – Ian Brownlie

Free Trade Agreements and Regional Trade Organisations

Under the present international system, a body of international law for facilitating trade between various nations has developed, which is known as international trade law. The World Trade Organisation, established in 1995 is a famous example of such an organisation. Such organisations also exist at the regional level. Some examples of them are:Mercosur was established among Argentina, Brazil, Paraguay and Uruguay founded in 1991 by the Treaty of Asunción. Bolivia, Chile, Colombia, Ecuador and Peru currently have associate member status. Venezuela signed a membership agreement on 17 June 2006, but before becoming a full member its entry has to be ratified by the Paraguayan parliament.

The ASEAN agreement was signed on 28 January 1992 in Singapore. When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. AFTA now comprises ten countries of ASEAN. 

NAFTA – North American Free Trade Area

SAARC – South Asian Association for Regional Cooperation

Apart from regional agreements, countries may have free trade agreements with each other, subject to their compliance with WTO law. For example, India has a Free Trade Agreement with the ASEAN, and expects to enter into one with the European Union by the end of 2010.

India also has a special kind of a free trade agreement, known as a Comprehensive Economic Cooperation Agreement (which deals with free trade not only in goods, but also services and mobility of investment and capital) with Singapore, and expects to enter into one with Malaysia as well by the end of 2010. 

World Trade Organisation

The World Trade Organization (WTO) is an international governmental organization comprising of sovereign states. Its primary aim is to liberalize and regulate international trade. It provides a framework for negotiation and formalization of trade agreements and solves disputes between the member states.

The WTO agreements are ratified in the Parliaments of the member nations lay down the legal ground rules for international commerce. It was established on 1st January, 1995 under the Marrakesh Agreement with the primary aim to liberalize and regulate international trade. WTO replaced General Agreement on Trade and Tariffis (GATT) which had been formed in 1947. At present it has 153 members. India became a member of the WTO in 1995. 

What is GATT?

Unlike the WTO, the GATT was a treaty organization affiliated with the United Nations whose main purpose was to facilitate trading activities between different nations of the world. The organization mainly focused on freezing and reducing tariff levels on various commodities.

At the time of its creation in 1947, GATT was meant to be a part of an International Trade Organization (ITO). Since the ITO was ultimately did not come into existence, the GATT was left as an independent body. It remained in force till 1994 when it was superseded by WTO. The original GATT text is still in effect under the WTO framework, subject to the modifications of GATT 1994 

How was the WTO created?

The multilateral trading system originally set up under the GATT is well over 50 years old. The system further evolved through a series of multilateral trade negotiations held under GATT Eights rounds of negotiation occurred under GATT out of which the first rounds mainly dealt with tariff reductions  and the  later negotiations focused on areas like anti dumping and non-tariff measures.  The last round known as the Uruguay Round (from 1986-94) led to the formation of WTO.

By the time the negotiations were nearing their completion, 123 countries were taking part in the process. It was the largest trade negotiation in history covering diverse areas such as trade in services and intellectual property and trade reforms in agriculture and textiles. All the original article of GATT were brought up for review. 

The Uruguay round culminated with the drafting of the first draft of a final legal agreement on world trade.  This draft also known as the “Dunkel Draft” was compiled by the then GATT director-general, Arthur Dunkel in December 1991. The Dunkel Draft with minor changes became the foundation of the WTO.  

Agreements under WTO

The agreement establishing the WTO regime signed during the April 1994 ministerial meeting at Marrakesh (hence known as Marrakesh Agreement), Morocco encompasses a number of other agreements as well.  The important agreements which form part of the WTO regime are:

  • The Agreement Establishing the WTO
  • Goods and investment — the Multilateral Agreements on Trade in Goods including the GATT 1994 and the Trade Related Investment Measures
  • Services — the General Agreement on Trade in Services
  • Intellectual property — the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
  • Dispute settlement (DSU)
  • Reviews of governments’ trade policies (TPRM) 

 What is WTO Ministerial conference?

The Ministerial Conference is the topmost decision making body of WTO, which generally meets after every two years and brings together all the member nations. The Ministerial Conference can take decisions on any matter under any of the multilateral trade agreements.  

WTO Ministerial Conference of 1996 (December 9-13)-  This was the inaugural ministerial conference held in Singapore.  Disagreements emerged between different nations on a number of issues initiated by this conference and the issues came to be collectively referred to as “Singapore Issues”. The issues pertain to 

  • Transparency in government procurement
  • Trade facilitation (customs issues),
  • Trade and investment, and
  • Trade and competition.

 Second Ministerial Conference

WTO Ministerial Conference of 1998 (May 18-20)- The Second Ministerial Conference of the World Trade Organization was held in Geneva, Switzerland. 

Third Ministerial Conference 

WTO Ministerial Conference of 1999(November 30- December 3)- The Third Ministerial Conference of the World Trade Organization was held in Seattle, Washington, USA. It was intended to launch a new round of trade negotiations known as “Millennial Round”.  In this conference, the USA and the European Union attempted to strike a mutual deal on agriculture which resulted in major disagreements with the developing countries. The conference ended in failure with massive demonstrations by the protestors and their controversial management by the authorities. 

Fourth Ministerial Conference 

WTO Ministerial Conference of 2001 ( November 9-13)- The negotiations which had collapsed at Seattle were reconvened at Doha, Qatar. The Doha Development Round was launched at the conference. At this conference, the member nations approved the joining of China which became the 143rd member of WTO. 

Fifth ministerial conference

WTO Ministerial Conference of 2003 (September 10-14)- The Fifth Ministerial Conference was held in Cancun, Mexico. It was targeted to forge the agreement on the Doha round. The G 20 developing countries ( a group of 22 southern nations) led by China, India and Brazil resisted demands from the North for agreements on the “Singapore issues” and called for an end to agricultural subsidies within the EU and the US. The talks broke down without progress.

Sixth Ministerial Conference 

WTO Ministerial Conference of 2005 (December 13-18)- The Sixth Ministerial Conference was held in Hong Kong. It was very important for the progress of Doha Development Agenda and its successful completion in 2006. In this meeting, countries agreed to phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. Further concessions to developing countries included an agreement to introduce duty free, tariff free access for goods from the Least Developed Countries. Other major issues were left for further negotiation to be completed by the end of 2010. 

Seventh Ministerial Conference  

WTO Ministerial Conference of 2009 (November 30- December 3)- The Seventh Session of the WTO Ministerial Conference took place in Geneva, Switzerland. The general theme for discussion was “The WTO, the Multilateral Trading System and the Current Global Economic Environment. 

What is India’s stand in the Doha Development round? 

 The Doha Development Agenda, launched at the fourth ministerial conference in Doha, Qatar in November 2001, aimed to make globalization more inclusive and help the world’s poor, particularly by reducing barriers to trade and subsidies in farming. The initial agenda comprised both further trade liberalization and new rule-making and. It also provided for substantial assistance by developing counties.  The negotiations were highly contentious and an agreement has not yet been reached. In 2007, negotiations within the Doha broke down at the Potsdam Conference.

ON July 21, 2008 negotiations started again at  WTO’s headquarters in Geneva but stalled after nine days of negotiations over the refusal to compromise over the special safeguard mechanism, a measure designed to protect poor farmers by allowing countries to impose a special tariff on certain agricultural goods in the event of an import surge or price fall.  This came one of the main bones of contention between India and US which resulted in the breakdown of the negotiations.

There was also the issue of agricultural subsidies. Developing countries like India wanted a reduction in trade distorting agricultural subsidies given the farmers in US and U.K. Further, while Brazil has emphasized reductions in trade-distorting domestic subsidies, especially by the United States, while India has insisted on a large number of special products that would not be exposed to wider market opening Moreover, developing countries led by India claim  they have had problems with the implementation of the agreements reached in the earlier Uruguay Round because of limited capacity or lack of technical assistance.

They also claim that they have not realized certain benefits that they expected from the Round, such as increased access for their textiles and apparel in developed-country markets. They seek a clarification of language relating to their interests in existing agreements. Although a number of these implementation issues were resolved, outstanding implementation issues are found in the area of market access, investment measures, safeguards, rules of origin, and subsidies and countervailing measures, among others. 

What is a tariff barrier? 

A tariff barrier is the barrier to trade in the form of a tax levied on imported or exported goods. Tariffs are usually associated with protectionism, the economic policy of restraining trade between nations. For political reasons, tariffs are usually imposed on imported goods, although they may also be imposed on exported goods. For instance, a protective tariff is intended to artificially inflate prices of imports and protect domestic industries from foreign competition especially from competitors whose host nations allow them to operate under conditions that are illegal in the protected nation, or who subsidize their exports. Tariff barriers have been significantly reduced in the face of WYO rules which require countries to cut down on their tariffs of imported goods.  

What are non-tariff barriers?

Non-tariff barriers to trade (NTB’s) are trade barriers that restrict imports but are not in the usual form of a tariff. Some common examples of NTB’s are anti-dumping measures and countervailing duties, which, although they are called “non-tariff” barriers, have the effect of tariffs once they are enacted.

Their use has risen sharply after the WTO rules led to a very significant reduction in the use of tariff barriers. Some non-tariff trade barriers are explicitly permitted only in very limited circumstances, when they are deemed necessary to protect health, safety, or sanitation, or to protect depletable natural resources.

  • Import bans
  • General or product-specific quotas
  • Rules of Origin
  • Quality conditions imposed by the importing country on the exporting countries
  • Sanitary and phyto-sanitary conditions
  • Packaging conditions
  • Labeling conditions
  • Product standards
  • Complex regulatory environment

What are Quantitative Restrictions to trade?

Quantitative restrictions are limitations on the quantity or value of a product that may be permitted to enter a country. They are probably the most familiar of the nontariff barriers and include quotas, embargoes, restrictive licensing, and other means of limiting imports. The Uruguay Round Agreement on Agriculture requires the conversion of quantitative restrictions to bound tariffs and tariff rate quotas.  Thus, these can be considered as trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, trade between countries. 

What is the concept of bound tariff? 

Bound tariff refers to the maximum rate of tariff allowed by (WTO) to any member state for imports from another member state.  The bound tariff rate is the the most-favored-nation tariff rate resulting from negotiations under the General Agreement on Tariffs and Trade (GATT) and incorporated as an integral component of a country’s schedule of concessions or commitments to other WTO members.

If a GATT contracting party raises a tariff to a higher level than its bound rate, the country or countries adversely affected have the right under GATT to retaliate against an equivalent value of the offending country’s exports or to receive compensation, usually in the form of reduced tariffs on other products they export to the offending country. 

What is an ad valorem tariff? 

An advalorem tariff is a duty or other charges levied on an item on the basis of its value and not on the basis of its quantity, size, weight, or other factor. It is a set percentage of the value of the good that is being imported. Sometimes these are problematic, as when the international price of a good falls, so does the tariff, and domestic industries become more vulnerable to competition. Conversely, when the price of a good rises on the international market so does the tariff, but a country is often less interested in protection when the price is high. 

What is the concept of balance of payments problems?  

Balance of payments (BOP) sheet is an accounting record of all monetary transactions between a country and the rest of the world.   These transactions include payments for the country’s exports and imports of goods, services, and financial capital, as well as financial transfers  The  economic problem caused by payments for imports being greater than receipts for exports. 

What is the mechanism of WTO Dispute Settlement and Appellate Tribunal ? 

Dispute settlement mechanism of the WTO is the central pillar of the multilateral trading system, and the WTO’s unique contribution to the stability of the global economy. Without a means of settling disputes, the rules-based system would be less effective because the rules could not be enforced. The WTO’s procedure underscores the rule of law, and it makes the trading system more secure and predictable.

The system is based on clearly-defined rules, with timetables for completing a case. First rulings are made by a panel and endorsed (or rejected) by the WTO’s full membership. Appeals based on points of law are possible. Priority is given to settlement of disputes, through consultations if possible. 

Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in another guise), which consists of all WTO members. The Dispute Settlement Body has the sole authority to establish “panels” of experts to consider the case, and to accept or reject the panels’ findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling.

Either side can appeal a panel’s ruling. Sometimes both sides do so. Appeals have to be based on points of law such as legal interpretation. They cannot reexamine existing evidence or examine new issues. The appeal can uphold, modify or reverse the panel’s legal findings and conclusions. Normally appeals should not last more than 60 days, with an absolute maximum of 90 days.

Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body and broadly representing the range of WTO membership. Members of the Appellate Body have four-year terms. They have to be individuals with recognized standing in the field of law and international trade, not affiliated with any government.

The Dispute Settlement Body has to accept or reject the appeals report within 30 days. The rejection is only possible by consensus. 

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