LAW5602 International Trade Law — Unit 1: Concept of International Trade Law

Unit 1: Concept of International Trade Law

1.1 Meaning of International Trade

International trade — the exchange of goods-and-services (and capital-and-ideas) across the borders: the imports-and-exports; the supply chains’ web (the modern trade’s reality — the good made in many countries). The law of international trade — the rules governing those exchanges: the private-law layer (the sales, the transport, the financing, the dispute resolution — the merchant’s law) and the public-law layer (the tariffs-and-quotas, the trade agreements, the WTO’s world — the state’s law). The two layers’ unity (the course’s map: Units 2-5 and 7 the private; Unit 6 the public; Unit 8 the new).

1.2 Theories of International Trade

1.2.1 Mercantilism

The oldest doctrine: the wealth-as-power view — the exports encouraged, the imports discouraged (the bullion’s accumulation); the state’s heavy hand (the monopolies, the navigation acts). The mercantilism’s modern echoes: the protectionism’s recurrences; the trade-wars’ faces; the “exports good, imports bad” popular fallacy (the economists’ rebuttal).

1.2.2 Absolute Advantage Theory

Adam Smith’s answer: trade because each country is absolutely better at something (the specialisation’s gain — the Scotland-Portugal climates’ logic): the free trade’s case against the mercantilist’s zero-sum.

1.2.3 Comparative Advantage Theory

David Ricardo’s refinement (the exam’s core): trade pays even where one country is better at everything — the relative (not absolute) costs matter: each specialises where its disadvantage is least (the famous cloth-and-wine example); the mutual gain’s mathematics. The theory’s critiques-and-modern faces: the assumptions’ challenge (the factor mobility, the constant costs); the infant-industry argument (the protection’s case for the late developers — Hamilton-and-List’s names); the new trade theory (the economies of scale — Krugman’s world); the strategic trade policy’s debates; the development-and-fair-trade agendas (Unit 8’s bridges).

1.3 Development of the Law of International Trade

1. The lex mercatoria — the medieval merchants’ law (the customs-and-fairs; the merchants’ courts; the cosmopolitan private law).
2. The national absorption — the mercantilist era’s nationalisation (the trade inside the states’ laws).
3. The nineteenth-century liberalisation — the bilateral treaties (the friendship-commerce-navigation pacts); the gold standard’s order.
4. The twentieth century’s swings — the protectionist collapse (the 1930s); the post-war reconstruction: the GATT 1947 (the tariffs’ round-by-round reduction); the ITO’s failure (the Havana Charter’s stillbirth).
5. The WTO era — the 1995 establishment (the Uruguay Round’s breadth: the goods-services-IP); the Doha’s travails (the round’s stall); the regionalism’s rise (the FTAs’ proliferation — the WTO-plus faces).
6. The private law’s unification — the parallel track: the CISG, the Incoterms, the UCP, the arbitration’s rise (the merchant’s law reborn — the lex mercatoria’s revival).

1.4 Efforts to Unify International Trade Law

1. UNCITRAL — the UN’s trade-law commission (the model laws-and-conventions: the CISG’s sponsorship, the arbitration’s framework, the e-commerce’s model law).
2. UNIDROIT — the private-law unification (the principles’s faces); the Hague Conference (the private international law).
3. The ICC — the business’s self-regulation (the Incoterms, the UCP — Unit 5’s world).
4. UNCTAD — the development’s voice (the preferences, the code-and-fair-trade debates).
5. The WTO’s contribution — the public law’s unification (the single undertaking’s discipline).
6. The regional harmonisation (the EU’s single market; the ASEAN’s integration; the SAFTA’s South Asian faces).
7. The challenges: the uniformity’s limits (the reservations, the interpretations, the common-law-civil-law gaps); the new subjects’ speed (the digital — faster than the treaties).

Model Questions

1. Explain the theories of international trade. (10)
2. Trace the development of international trade law. (10)
3. What efforts have been made to unify international trade law? (10)
4. Short notes: (a) Lex mercatoria; (b) Comparative advantage; (c) UNCITRAL; (d) Havana Charter. (4×5)

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📚 Get the complete notes: Download the full International Trade Law PDF (all units) — Law Info Nepal Original Notes Series.