Evolutionary Step in International Business Law - Essay Example

INTERNATIONAL TREATIES; AND EVOLUTIONARY STEP IN INTERNATIONAL BUSINESS LAW By Location Introduction International laws are the norms and the rules that regulate the activities carried within the legal boundaries of the states. The laws are applicable to three main international relationships which are relations between the different states and nations, individual relations between people of different nations and relations between the individuals and the foreign states. International laws ensure that peace is maintained within different states. As a result, there is peaceful co-existence between members of different nationalities. The essay discusses three main sources of international laws and evolutionary step in International Business Law. There are three main sources of international laws which include principles of law, customs, and treaties. One of the main sources of the international laws is Article 38 of the International Court of Justice (Clarkson, Miller & Cross 2014, p. 64). International laws only bind nations in their mutual relations. They act as a guideline of how different people should relate to one another in their interactions. Although there are the main sources of the international laws, it is important to note that lawmaking is a continuous process. There is a need for upgrade and refinement. In the 19th and 20th century, many treaties and Conventions played a great role in the development of the international law especially in the commercial sector. Sources of international laws Customary law It is much more common in international law making system than the domestic legal systems. The customary laws result from the patterns of behaviour among different states. The behaviour patterns in different states are referred to as practices. If the practices are based on the opinion juris or legal obligations, they are referred to as customary international laws (Clarkson, Miller & Cross 2014, p. 102). Customary laws require a practice it cannot be built on the theoretical aspect. The main questions asked about the customary laws are how widespread the law should be applied, how long it takes for it to become a law. Customary laws work better in practice. The customary laws require a lot of involvement because one has to study the behaviours of the practices of many states and where possible find relevant statements expressing a legal conviction. Although the customary law is a source of the international law, sometimes it is believed to be vague because it opens up conflicting interpretations. States may decide to change their behaviour regularly, thus affecting the formation of the customary law. This mainly happens in the context of the international investment law. Principles of law Principles of law close the gaps left by the treaties and customary laws. They are established by comparing the legal systems from different states. Any of the principle that is common to all the states may be applied in the international law. Examples of the systems are principles of fairness before the court, the protection of the acquired rights, and binding nature of agreements. They are useful and applied by international arbitral tribunals. It is not easy to go through all the domestic legal systems. Thus, the general principles of law can be easily found by studying legal cultures such as Islamic law, common law, and civil law (Wolfrum & Roben 2008, p. 118). Conventions and treaties According to the international court of Justice, Conventions are the first source of international law. Some of the Conventions that played a great role in the formation of the international law include Hague Conventions of 1907 and the Geneva Convention of 1864. Secondly, treaties were a source of the international law. Treaties are the agreements made between states on issues of international law. One of the treaties that played a great role in the formation of the international law is the Treaty of Locarno in 1925 (Sornarajah 2004, p. 124). In the 19th century, the United States registered many treaties which were later incorporated in the international law. Treaties have been referred to as pact, agreement, charter, protocol, and memorandum of understanding. Treaties may either be multilateral or bilateral. Multilateral treaties deal with issues such as the Law of the Sea and Diplomatic Relations. An example of the multilateral treaty that has led to the establishment of the international law is the Vienna convention in Diplomatic Relations. The treaty emphasized on universal acceptance and participation. Making of the multilateral treaty is cumbersome and needs a lot of involvement. It goes through various stages for it to become a law. First, requires deliberation by an expert body, for instance International Law Commission. Second, the draft should be accepted by an international body such as General Assembly of the United Nations. Finally, the treaty is ratified by the individual countries and accepted as a law. However, multilateral treaties only work in those countries that have agreed to be bound by the treaties (Wolfrum&Roben 2008, p. 212). Bilateral treaties are the primary instruments in international law making. Examples of the bilateral treaties include bilateral investment treaties, extradition treaties, and air transport agreements. While making the bilateral treaties, each party should be involved in the process. Apart from the three primary sources of law, there are secondary sources of international law as discussed below; Decisions of tribunals and courts Legal scholars are not supposed to make international laws in the legal proceedings. However, they play a great role in shedding light on the existing laws. They have experience in the law system, thus they can provide a theoretical framework to influence the law making process. Some have contributed to scholarly publications in the law making process. Thus, they play a great role in advancing the law (De 2011, p. 104). International investment law Ideally, international investment laws are derived from the customary laws. International investment laws mainly deal with protection and fair treatment of the investors and protection of property against expropriation by the host states. International investment law was as a result of different changes in the international business operation sector (Schmitthoff& Cheng 2008, p. 108). Firstly, socialist ideologies in the Soviet Union who was concerned about property rights and a repudiation of the private businesses (De 2011, p. 56). Decolonization also resulted in international investment law development. Most of the independent countries argued that contractual guarantees and property rights affected the domestic market. Foreign investors were earning more than the domestic investors, thus affecting the country’s Gross Domestic Product (GDP). There was a need to develop an international system to control trade among different states. As a result, of this the Charter of Economic Rights and duties of States was adopted in 1974 (Thirlway2014, p. 189). The charter was approved by socialists and the developing countries. There was also the development of the bilateral investment treaty (BIT) which guaranteed the nation’s legal protection of the investors in different countries. The treaty guaranteed equitable and fair treatment of the investors. The bilateral investment treaty gave a guideline on how different states can settle disputes through international arbitration. Business and international treaties History and its development The international treaties governing the business sector among different nations and states developed from the customs, traditions, and history that found their way into the legal precedents. There were agreements set in times of trade and commerce to ensure that peace was maintained during that period (Thirlway 2014, p. 89). Various states and nations had different currencies and terms of trade. Thus, they had to come up with a framework which would facilitate trade between different nations fairly. The nations had to agree to ensure that trade in the states was done effectively. Consequently, countries entered into treaties of friendship, commerce and navigation (FCN). These types of treaties defined the duties and reciprocal rights of each nation. Some of the FCN treaties mainly focused on the entry of ships, good, capital, and traders into other nation’s territory, repatriation of funds, and acquisition of property and protection of the investors (Miller & Cross 2013, p. 78). To ensure that there was proper development of trade, commerce, and alliances the countries entered into conventions. Through the conventions, the countries were able to ensure that all the foreign and domestic investors were protected. Thus, legally binding agreements came up through different conventions. Good examples of the convention include the United Nations, which was sponsored by the conventions on contracts for the international sale of Goods and the Treaty of Rome (Sornarajah 2004, p. 163). The convention led to the creation of the European community. The United Nations conventions sponsored different multilateral agreements in the commerce sector among different nations and states. International treaties in business Trade is carried out across national boundaries daily. The transactions carried out across these boundaries are guided by regulations, special arrangements, myriad laws, and restrictions. There are international laws that guide the operations of the businesses in the international market. Basically, the laws are in three levels, which are regional agreements for instance MESCOSUR and NAFTA, bilateral relations, for instance Canada, Unites Free Trade Agreement and multilateral agreements such as WTO and GATT (Condon 2002, p. 105). After the events of World War II, there was a need for development of the international laws in the commerce sector. Due to this the International Trade Organization (ITO) and World Bank were formed. Through the World Bank, different nations made their contribution for the purpose of promoting trade globally. The development of the General Agreement on Tariffs and Trade (GATT) facilitated the development of commerce globally. The main function of GATT was to facilitate free trade among different nations (Schmitthoff& Cheng 2008, p. 98). Later, the International Trade Organization was replaced by World Trade Organization (WTO). The international trade was also furthered by the free trade arrangements such as the North American Free Trade Agreement (NAFTA) and the European Union (De 2011, p. 211). There was a dispute on the importation of tariffs in most of the states and nations. As a result, there was formation of the WTO’s Dispute Settlement Body that looked into the trade barriers among different states and nations (Condon 2002, p. 85). The World Trade Organization provided a legal framework for international trade policy and commerce. Through the website business men and different people can access all the information in relation to trade on the website. They can learn all the terms and conditions of the international trade. World Trade Organization clearly describes how trade should be carried out in different states and nations. The principles and laws in the organizations are a light on how the business practices are supposed to be carried out overtime. However, there arose difference in the terms of condition in World Trade Organization which resulted in the formation of Dispute Settlement Body (DSP). The Dispute Settlement body allowed the United States to impose a certain amount of tariffs. The commerce laws had to cater for the rights of every nation because international law protects the nation but not an individual. Thus, there was a need for protection of intellectual property which was a principle in GATT (Miller & Cross 2013, p.45). Companies seeking to carry out businesses outside their country need to look into issues such as nontariff barriers to trade the government procurement rules, and the restrictions on mobility in that given country. To safeguard the domestic trade in different nations and states U.S Congress enacted the Foreign Corrupt Practices Act (FCPA). The act ensured that foreign government officials paid the government when they wanted to obtain or retain business. The Foreign Corrupt practice act was an act under the customary international law that safeguarded the operation of the businesses in different states and nations. Conclusion With the development of technology, there has always been a need to regulate trade among different nations and states. That is why there is continuous development of the international law system. Most of the international laws came from the commerce sector to ensure that there was effective regulation of trade. Trade is a common practice and nations need to export and import goods from other nations. International law follows a certain procedure before they became a law as discussed above. Bibliography Clarkson, K. W., Miller, R., & Cross, F. (2014). Business law: text and cases. Condon, B. J. (2002). NAFTA, WTO and global business strategy: How AIDS, trade and terrorism affect our economic future. Westport CT, Quorum Books. DeJonge, A. (2011). Transnational Corporations and International Law Accountability in the Global Business Environment. Cheltenham, Edward Elgar Pub. http://public.eblib.com/choice/publicfullrecord.aspx?p=685069. Miller, R. L., & Cross, F. B. (2013).The legal environment today: business in its ethical, regulatory, e-commerce, and global setting. Mason, Ohio, South-Western Cengage Learning. Schmitthoff, C. M., & Cheng, J. (2008).Clive M. Schmitthoffs select essays on international trade law. Dordrecht, M. Nijhoff. Sornarajah, M. (2004).The international law on foreign investment. Cambridge, Cambridge University Press. http://public.eblib.com/choice/publicfullrecord.aspx?p=266634. Thirlway, H. W. A. (2014). The sources of international law. Wolfrum, R., &Röben, V. (2008).Legitimacy in international law. Berlin, Springer. Read More