Question 1: What are sources of international trade law (i.e.
sources of law
governing international trade)?
International trade and commercial law is governed by multiple sources, each
contributing to the legal framework that regulates cross-border transactions. These
sources ensure the smooth functioning of global trade and commerce by establishing
rules, standards, and principles that parties involved in international trade must adhere to.
1. International Trade Agreements/Conventions:
These are formal, legally binding agreements between countries aimed at regulating and
facilitating international trade. They provide a set of rules, obligations, and dispute
resolution mechanisms that parties can rely on in international trade.
WTO Agreements (World Trade Organization):
The WTO serves as the cornerstone of international trade law. It encompasses a series of
agreements covering various trade-related areas such as tariffs, non-tariff barriers, trade
in goods, trade in services, intellectual property rights, and more. Major agreements
under the WTO include:
GATT 1994 (General Agreement on Tariffs and Trade): Trade-Related Aspects of
Intellectual Property Rights (TRIPS):
Dispute Settlement Understanding (DSU):
Free Trade Agreements (FTAs):
Bilateral or multilateral agreements between countries that aim to reduce trade barriers
(such as tariffs and quotas) and promote economic integration. Examples include NAFTA
(North American Free Trade Agreement, now USMCA), EU-Canada CETA, and CPTPP.
Economic Partnership Agreements (EPAs):
Agreements between the EU and African, Caribbean, and Pacific (ACP) countries aimed
at fostering economic development and trade integration, often with a focus on aid and
investment.
United Nations Convention on Contracts for the International Sale of Goods
(CISG):
Established in 1980, the CISG provides a uniform set of rules governing international
sales contracts. It applies when parties from different countries agree on contracts,
ensuring a consistent legal framework.
2. Customary International Law:
Customary international law arises from long-standing practices and widespread
acceptance by states as legally binding. In the context of international trade, customary
law governs important areas by establishing standards and practices that parties generally
follow.
Incoterms (International Commercial Terms):
Developed by the International Chamber of Commerce (ICC), Incoterms are a set of
internationally recognized rules that define the responsibilities of sellers and buyers
regarding the delivery of goods. They clarify key aspects such as shipping, delivery,
insurance, and risk allocation.
Example: Incoterms like "FOB" (Free On Board) or "CIF" (Cost, Insurance, and Freight)
ensure clear understanding of responsibilities in international shipping transactions.
Uniform Customs and Practice for Documentary Credits (UCP):
Administered by the International Chamber of Commerce (ICC), UCP provides standard
rules for international letters of credit, which are commonly used in trade financing.
These rules ensure that banks and businesses have a common understanding of how
letters of credit should be issued and executed.
General Principles of International Trade Law:
These are unwritten principles that guide the conduct of trade practices, such as good
faith, fair dealing, and the principle of pacta sunt servanda (agreements must be honored).
