Rules and Principles Facilitating International Economic Law A
Sources of International Economic Law
- General International law sources (Article 38(1) Statute of the ICJ)
o Customary international law
Covers situations when a significant number of countries conduct their behaviour
repeatedly in a certain way because they believe they must.
It is a self-creating & self-perpetuating form of law which arises out of custom.
2 Elements -
State Practice
Acceptance of state practice
o Treaties
When states create a treaty a (an agreement) which sets out their right and
obligations to each other which they are then bound by.
o General principles of law (e.g. good faith and estoppel)
These are concepts that are regarded as generally present and can be drawn upon
by a court.
Generally considered to have less force than other sources.
They influence the way that courts interpret and enforce both Customary
International Law and Treaty Law.
Article 38 ICJ
- International Economic Law Specific Sources (Some Examples)
o EU law (as well as USMCA and other shallower/narrower systems)
More Highly integrated and developed then other international economic law
systems.
o Other Regional International Economic Law Systems
E.g. NAFTA – North American Free Trade Agreement between US, Mexico and
Canada.
Many Regionally Focused systems like the EU system but with less integration
making the system much shallower.
No harmonisation of standards, no single market etc.
o International agreements harmonizing private transactions
E.g. on jurisdiction and choice of law, to deal with ‘conflicts of laws’
Jurisdiction of Law agreements determine which legal system from which
country should be applied to the case
Choice of Law agreements then determine which laws should apply to the
case.
These international agreements are regarded as public international law, because
the rules are made between states and are recognized between states.
But they are intended to deal with situations that are private international
law disputes often between private commercial actors.
, o ‘Transnational law’ and lex mercatoria
Principles developed by private practice (e.g. pacta sunt servanda agreements must
be kept) that are increasingly chosen as governing law by parties and enforced by
arbitration panels.
International Disputes by Private Parties are increasingly being referred to
these principles.
Contentious.
- International Economic Life is governed by both elaborate international structures, such as
European union law and other less developed international agreements but also principles
derived from private practice.
Principles of International Economic Law
- 2 Sets of Principles
o Principles that Facilitate International Economic Life
o And Principles that Regulate International Economic Life
- Facilitating international economic life: - (Enabling International Life)
o Autonomy (via sovereignty)
o Liberalization
o Fair treatment of foreign investors
o Non-discrimination
- Regulating international economic life to secure: - (Next Lecture)
o Favourable conditions for developing countries
o Sustainable development
o Respect for human rights
,Principles that Facilitate International Economic Life
Principle 1: - Autonomy (via Sovereignty)
- Principle of Autonomy originates in the Principle of Sovereignty
o States have autonomy over economic policy through their state sovereignty:
Evidence of this principle can be seen in the United Nations Charter of Economic
Rights + Duties of States, which demonstrates and agreement amongst all the States
of the United Nations General Assembly, about the rights of States to be able to
govern their own economic life.
United Nations Charter of Economic Rights + Duties of States 1974
‘Article 2(1). Every State has and shall freely exercise full permanent
sovereignty, including possession, use and disposal, over all its wealth, natural
resources and economic activities.’
The first principle that governs the international economic relations between
states is ‘Sovereignty, territorial integrity and political independence of States’
o States often Voluntarily constrained their Sovereignty:
This can be done through agreement such as –
Treaties with other States
Economic development agreements (Contracts) with investors (Private Actors)
o These oblige the state to act in a certain way or require them to provide
specific services.
Membership of International Agreements
o [WTO, EU etc.]
These are instances where countries agree to constrain their own sovereignty to
achieve greater economic prosperity.
o Sovereignty over a state’s Economic Policy has been undermined by -
Colonialism
[largely up until the 1970s]
War
Corporate dominance
Still continues in the modern day.
Situations where corporations dominate within a state obtaining highly
concentrated levels of the states wealth and influence within the state which
can undermine the sovereignty of the state. And the result of that is that they
tend to promote liberalization,
Neoliberal development policy.
International Organisations such as the world bank are pursuing relatively
neoliberal policies. Those are policies that emphasize the market over the
state. This often tends to promote liberalization, of countries which involves
opening them to foreign investment by reducing trade barriers which can be
seen as an infringement on that states sovereignty.
, o Importance of State sovereignty is noted in many modern treaties which explicitly state
that states have sovereignty over their territory, political independence and natural
resources preventing other states from claiming that a state did not have sovereignty or
that it could take sovereignty from that state through occupation.
- States have legislative jurisdiction.
o State sovereignty confers the ability for states to legislate over economic acts of others.
States have legislative jurisdiction over illegal economic acts by other actors:
Committed in their territory (subjective territorial principle)
o If an actor commits an illegal economic act within a states territory they
have legislative jurisdiction over that act.
Completed in their territory (objective territorial principle)
o If an actor starts an illegal economic act outside but it ends up being
completed within their territory the state has legislative jurisdiction over
the act.
Effects Principle (extension of the objective principle)
o US claim to regulate over acts that are completely conducted abroad, but
which have an effect on the US.
o Used in antitrust/competition law, recently toned down.
o Grey Area about the extent to which states can legislate the economic acts
of nationals outside their jurisdiction.
o States have adjudicative jurisdiction if their own (‘forum’) rules say so.
States have adjudicative jurisdiction (Authority for their own courts systems to hear
cases) about cases involving both economic and other issues if their own rules
permit them to.
Some countries have a very open attitude and are willing to hear cases about many
different issues.
Often jurisdiction is not the issue but instead issues faced involve obtaining the
authority to bring the defendant before their court, obtaining the authority to
implement a ruling etc.
Sources of International Economic Law
- General International law sources (Article 38(1) Statute of the ICJ)
o Customary international law
Covers situations when a significant number of countries conduct their behaviour
repeatedly in a certain way because they believe they must.
It is a self-creating & self-perpetuating form of law which arises out of custom.
2 Elements -
State Practice
Acceptance of state practice
o Treaties
When states create a treaty a (an agreement) which sets out their right and
obligations to each other which they are then bound by.
o General principles of law (e.g. good faith and estoppel)
These are concepts that are regarded as generally present and can be drawn upon
by a court.
Generally considered to have less force than other sources.
They influence the way that courts interpret and enforce both Customary
International Law and Treaty Law.
Article 38 ICJ
- International Economic Law Specific Sources (Some Examples)
o EU law (as well as USMCA and other shallower/narrower systems)
More Highly integrated and developed then other international economic law
systems.
o Other Regional International Economic Law Systems
E.g. NAFTA – North American Free Trade Agreement between US, Mexico and
Canada.
Many Regionally Focused systems like the EU system but with less integration
making the system much shallower.
No harmonisation of standards, no single market etc.
o International agreements harmonizing private transactions
E.g. on jurisdiction and choice of law, to deal with ‘conflicts of laws’
Jurisdiction of Law agreements determine which legal system from which
country should be applied to the case
Choice of Law agreements then determine which laws should apply to the
case.
These international agreements are regarded as public international law, because
the rules are made between states and are recognized between states.
But they are intended to deal with situations that are private international
law disputes often between private commercial actors.
, o ‘Transnational law’ and lex mercatoria
Principles developed by private practice (e.g. pacta sunt servanda agreements must
be kept) that are increasingly chosen as governing law by parties and enforced by
arbitration panels.
International Disputes by Private Parties are increasingly being referred to
these principles.
Contentious.
- International Economic Life is governed by both elaborate international structures, such as
European union law and other less developed international agreements but also principles
derived from private practice.
Principles of International Economic Law
- 2 Sets of Principles
o Principles that Facilitate International Economic Life
o And Principles that Regulate International Economic Life
- Facilitating international economic life: - (Enabling International Life)
o Autonomy (via sovereignty)
o Liberalization
o Fair treatment of foreign investors
o Non-discrimination
- Regulating international economic life to secure: - (Next Lecture)
o Favourable conditions for developing countries
o Sustainable development
o Respect for human rights
,Principles that Facilitate International Economic Life
Principle 1: - Autonomy (via Sovereignty)
- Principle of Autonomy originates in the Principle of Sovereignty
o States have autonomy over economic policy through their state sovereignty:
Evidence of this principle can be seen in the United Nations Charter of Economic
Rights + Duties of States, which demonstrates and agreement amongst all the States
of the United Nations General Assembly, about the rights of States to be able to
govern their own economic life.
United Nations Charter of Economic Rights + Duties of States 1974
‘Article 2(1). Every State has and shall freely exercise full permanent
sovereignty, including possession, use and disposal, over all its wealth, natural
resources and economic activities.’
The first principle that governs the international economic relations between
states is ‘Sovereignty, territorial integrity and political independence of States’
o States often Voluntarily constrained their Sovereignty:
This can be done through agreement such as –
Treaties with other States
Economic development agreements (Contracts) with investors (Private Actors)
o These oblige the state to act in a certain way or require them to provide
specific services.
Membership of International Agreements
o [WTO, EU etc.]
These are instances where countries agree to constrain their own sovereignty to
achieve greater economic prosperity.
o Sovereignty over a state’s Economic Policy has been undermined by -
Colonialism
[largely up until the 1970s]
War
Corporate dominance
Still continues in the modern day.
Situations where corporations dominate within a state obtaining highly
concentrated levels of the states wealth and influence within the state which
can undermine the sovereignty of the state. And the result of that is that they
tend to promote liberalization,
Neoliberal development policy.
International Organisations such as the world bank are pursuing relatively
neoliberal policies. Those are policies that emphasize the market over the
state. This often tends to promote liberalization, of countries which involves
opening them to foreign investment by reducing trade barriers which can be
seen as an infringement on that states sovereignty.
, o Importance of State sovereignty is noted in many modern treaties which explicitly state
that states have sovereignty over their territory, political independence and natural
resources preventing other states from claiming that a state did not have sovereignty or
that it could take sovereignty from that state through occupation.
- States have legislative jurisdiction.
o State sovereignty confers the ability for states to legislate over economic acts of others.
States have legislative jurisdiction over illegal economic acts by other actors:
Committed in their territory (subjective territorial principle)
o If an actor commits an illegal economic act within a states territory they
have legislative jurisdiction over that act.
Completed in their territory (objective territorial principle)
o If an actor starts an illegal economic act outside but it ends up being
completed within their territory the state has legislative jurisdiction over
the act.
Effects Principle (extension of the objective principle)
o US claim to regulate over acts that are completely conducted abroad, but
which have an effect on the US.
o Used in antitrust/competition law, recently toned down.
o Grey Area about the extent to which states can legislate the economic acts
of nationals outside their jurisdiction.
o States have adjudicative jurisdiction if their own (‘forum’) rules say so.
States have adjudicative jurisdiction (Authority for their own courts systems to hear
cases) about cases involving both economic and other issues if their own rules
permit them to.
Some countries have a very open attitude and are willing to hear cases about many
different issues.
Often jurisdiction is not the issue but instead issues faced involve obtaining the
authority to bring the defendant before their court, obtaining the authority to
implement a ruling etc.
