1. Chapter 54 International and World Trade Law

2. Learning Objectives
Describe the U.S. government’s power under the Foreign Commerce Clause and Treaty Clause of the U.S. Constitution
Describe a nation’s court jurisdiction over international disputes
Describe the functions and governance of the United Nations

3. Learning Objectives
Describe the North American Free Trade Agreement (NAFTA) and other regional economic organizations
Describe the World Trade Organization (WTO) and explain how its dispute-resolution procedure works

4. The United States and Foreign Affairs
The U.S. Constitution divides the power to regulate the internal affairs of this country between the federal and state governments
Two constitutional provisions:
Foreign Commerce Clause
Treaty Clause

5. Foreign Commerce Clause
Vests Congress with the power “to regulate commerce with foreign nations”
Any state or local law that unduly burdens foreign commerce is unconstitutional, in violation of Foreign Commerce Clause

6. Treaty Clause
States that the president “shall have power, by and with the advice and consent of the Senate, to make treaties, provided two-thirds of the senators present concur”
Only the federal government can enter into treaties with foreign nations

7. Treaty Clause
Treaty: agreement or contract between two or more nations that is formally signed by an authorized representative and ratified by each nation
Bilateral treaty: between two nations
Multilateral treaty: involves more than two nations
Convention: treaty sponsored by an international organization

8. United Nations(UN)
International organization created by multilateral treaty in 1945
Headquartered in New York City
Goals of the United Nations:
Maintain peace and security in the world
Promote economic and social cooperation
Protect human rights

9. Governance of the United Nations
General Assembly
Legislative body that is composed of all UN member nations
Adopts resolutions concerning human rights, trade, finance, and economics

10. Governance of the United Nation
Security Council
Composed of 15 member nations
Five permanent members (China, France, Russia, The U.K., The U.S.)
Ten members selected for two-year terms
Primarily responsible for maintaining international peace and security
Has authority to use armed forces

11. Governance of the United Nations
Secretariat
Administers the day-to-day operations of the UN
Headed by the Secretary-General, who is elected by the General Assembly
Refer matters that threaten international peace and security to the Security Council
Help solve international disputes

12. UN Agencies
United Nations Educational, Scientific, and Cultural Organization(UNESCO)
United Nations Children’s Fund(UNICEF)
International Monetary Fund(IMF)
World Bank
International Fund for Agricultural Development (IFAD)

13. UN Agencies
International Monetary Fund(IMF): promote sound monetary, fiscal, and macroeconomic policies worldwide by providing assistance to needy countries
World Bank: provide money to developing countries to fund projects for humanitarian purposes and to relieve poverty
United Nations Children’s Fund(UNICEF): provide aid to improve the lives of the world’s children

14. International Court of Justice
Judicial branch of the United Nations
Also called the World Court
Located in The Hague, the Netherlands
Only nations can have cases decided by this court
Cases involving treaties and the UN Charter

15. European Union (EU)
Comprised of many countries of Western and Eastern Europe
Created to promote:
Peace and security
Economic, social, and cultural development
Euro: A single monetary unit that has been adopted by many countries of the EU that comprise the eurozone

16. EU Administration
Council of Ministers composed of representatives from each member country
Coordinate efforts to fulfill objectives of the treaty
European Union Commission have authority to enact legislation and to take enforcement actions to ensure member compliance with the treaty
EU treaty promotes trade by providing for the free flow of capital, labor, goods, and services among member nations

17. North American Free Trade Agreement (NAFTA)
Treaty signed by the U.S., Canada, and Mexico
Eliminates or reduces most of the duties, tariffs, quotas, and other trade barriers between the members
A country can reimpose tariffs if an import surge from one of the other nations hurts its economy or workers
Special protection for favored industries

18. Other Regional International Organizations
Association of Southeast Asian Nations (ASEAN)
Organization of the Petroleum Exporting Countries (OPEC)
Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)

19. World Trade Organization (WTO)
Successor to the General Agreement on Tariffs and Trade (GATT)
International organization of 153 member nations
Headquartered in Geneva, Switzerland
Promote and enforce trade agreements among member nations
Lower trade barriers and revised trade rules
Solves trade disputes among nations

20. WTO Dispute Resolution
WTO panel: Body of three WTO judges that hears trade disputes between member nations and issues panel reports
WTO dispute settlement body: composed of one representative from each WTO member nation that reviews panel reports
WTO appellate body: panel of seven judges selected from WTO member nations that hears and decides appeals from decisions of the dispute-settlement body

21. National Courts and International Dispute Resolution
National courts: courts of individual nations
Primarily deals with commercial disputes between private litigants
Commercial disputes between U.S. companies and foreign governments or parties may be brought in U.S. District Court

22. Judicial Procedure
Choice of forum clause: designates which nation’s court has jurisdiction to hear a case arising out of the contract
Choice of law clause: designates which nation’s laws will be applied in deciding a dispute arising out of the contract

23. Act of State Doctrine
Judges of one country cannot question the validity of an act committed by another country within that other country’s borders
Based on the principle that a country has absolute authority over what transpires within its own territory

24. Case 54.1: Act of State Doctrine
Glen v. Club Mediterranee, S.A.
450 F.3d 1251, Web 2006 U.S. App. Lexis (2006)
United States Court of Appeals for the Eleventh District
Issue
Does the act of state doctrine bar recovery by the Glens?

25. Doctrine of Sovereign Immunity
Countries are granted immunity from suits in courts in other countries
Foreign Sovereign Immunities Act(FSIA)
Governs suits against foreign nations that are brought in federal or state courts in the United States
Codifies the principle of qualified, or restricted, immunity

26. Exceptions to the FSIA
The foreign country has waived its immunity, either explicitly or by implication
Commercial activity exception
states that a foreign country is subject to lawsuit in the U.S. if it engages in commercial activity in the U.S. or if it carries on such activity outside the U.S. but causes a direct effect in the U.S.

27. International Religious Laws
Jewish Law and the Torah
Islamic Law and the Qur’an
Christian and Canon Law
Hindu Law and Dharmasastra

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