International trade is mainly concerned with the economic exchanges or trade relations occurring worldwide. International trade law includes the appropriate rules and customs for handling trade between countries or between private companies across borders. It concentrates on the challenges and prospects of global trade. International trade is basically exchange of goods, services etc. across international borders or territories. Over the past two decades it has become one of the fastest growing areas of international law.
The body of rules for transnational trade in the 21st century derives from medieval commercial laws called the lex mercatoria and lex maritime, respectively, “the law for merchants on land” and “the law for merchants on sea.” Modern trade law (extending beyond bilateral treaties) began shortly after the Second World War, with the negotiation of a multilateral treaty to deal with trade in goods: the General Agreement on Tariffs and Trade (GATT). International trade law is based on theories of economic liberalism developed in Europe and later the United States from the 18th century onwards.
Definitions of International Trade Law
ITL can be defined as the economic activity of buying and selling where the transaction crosses a border or cross border transaction. So it is basically cross border sale of goods. Now the cross border sale of goods is not limited to the role of commodities or manufactured goods, it also includes services or may involve the movement of capital from one state to another through loans or investment. Hence international trade is concerned with the movement of goods, services, capital and in some circumstances labor across the borders.
International Business Law
International Business Law basically deals with Antitrust/competition concerns, the environment, emerging issues in electronic commerce, and taxation. The resources of regulation include national laws, government agency rules, policies, guidelines, and the status of a country in relation to pertinent treaties or international conventions. International Business Law includes European Commission- Competition, US Antitrust Laws— The Sherman Act, 1889, Indian Competition Act etc.
International or Transnational Commercial Law
Central arrangements for International Sale of Goods are setting a legal context generally known as International or transnational Commercial Law. Modern Int. Commercial law has evolved through the principles of Lex Mercatoria-Law of Merchants. This means, a medieval body of customary rules that were used in international commercial transactions to supplement the then incomplete commercial law of states. Before the rise modern state system, the Lex Mercatoria was common in all European States. This law that was applied in settling the merchants disputes through their own courts, known as, Pepowder Courts, Which operated like modern Private International Arbitration.
In 19th & 20th Century states developed their own commercial laws. For example, Uniform Commercial Code in USA; The Sale of Goods Act in Britain; Code of de Commerce in France. Codification and development of commercial law also started.
Why do we need to study International Trade Law?
Countries are endowed by nature with different elements of productive power. It is inevitable when there are differences in the countries regarding minerals, natural vegetation, climate, soils and other physical and geographical conditions. This necessitates trade of one country with another. National laws drafted with state’s economic, political and social interests cannot be applied to international transactions.
In most countries, it represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), it’s economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. International trade is a major source of economic revenue for any nation that is considered a world power. Without international trade, nations would be limited to the goods and services produced within their own borders. So to maintain uniformity in international system, international trade law is required.
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Writeen by: Abhishek Khare