UCC Worksheet 2- International & World Trade Law PDF

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LEGAL CONCEPTS FOR COMMERCE TUESDAYS & THURSDAYS AT 7:00 A.M. WORKSHEET 9-PREPARED BY DONIA J. FULLER-BARRETT

UNIVERSITY OF THE COMMONWEALTH CARIBBEAN LEGAL CONCEPTS FOR COMMERCE (LAW 101) WORKSHEET NO. 2 INTERNATIONAL AND WORLD TRADE LAW _________________________________________________________________________ FUNCTIONS AND GOVERNANCE OF THE UNITED NATIONS (‘UN’)1 Role/Functions2 The role of the UN may be summarised by referring to Article 1 of the UN Charter which states the following purposes: (a) To maintain international peace and security, and to that end: to take effective collective measures for the prevention and removal of threats to the peace, and for the suppression of acts of aggression or other breaches of the peace, and to bring about by peaceful means, and in conformity with the principles of justice and international law, adjustment or settlement of international disputes or situations which might lead to a breach of the peace; (b) To develop friendly relations among nations based on respect for the principle of equal rights and selfdetermination of peoples, and to take other appropriate measures to strengthen universal peace;

(c) To achieve international co-operation in solving international problems of an economic, social, cultural, or humanitarian character, and in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language, or religion; and (d) To be a center for harmonizing the actions of nations in the attainment of these common ends.

In a nutshell, it is an international organization designed to make the enforcement of international law, security, and human rights; economic development; and social progress easier for countries around the world. The United Nations includes 193 member countries and two permanent observer entities that cannot vote. Its main headquarters is in New York City. Prior to the United Nations (UN), the League of Nations was the international organization responsible for ensuring peace and cooperation between world nations. It was founded in 1919 "to promote international cooperation and to achieve peace and security." At its height, the League of Nations had 58 members and was considered successful. In the 1930s, its success waned as the Axis Powers (Germany, Italy, and Japan) gained influence, eventually leading to the start of World War II in 1939.

1

https://www.thoughtco.com/the-united-nations-p2-1435441

2

https://www.un.org/en/sections/about-un/overview/index.html

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The term "United Nations" was then coined in 1942 by Winston Churchill and Franklin D. Roosevelt in the Declaration by United Nations. This declaration was made to officially state the cooperation of the Allies (Great Britain, the United States, and the Union of Soviet Socialist Republics) and other nations during World War II.

The UN as it is known today, however, was not officially founded until 1945 when the Charter of the United Nations was drafted at the UN Conference on International Organization in San Francisco, California. Representatives of 50 nations and several non-governmental organizations attended the conference, all of which signed the charter. The UN officially came into existence on October 24, 1945, after its charter's ratification. Governance To handle the complex task of getting its member states to cooperate most efficiently, the UN today is divided into five branches. The first is the UN General Assembly. This is the main decision-making and representative assembly and is responsible for upholding the principles of the UN through its policies and recommendations. It is composed of all member states, is headed by a president elected from the member states, and meets from September to December each year. The UN Security Council is another branch and is the most powerful. It can authorize the deployment of UN member states' militaries, can mandate a cease-fire during conflicts and can enforce penalties on countries if they do not comply with given mandates. It is composed of five permanent members and 10 rotating members.

The next branch of the UN is the International Court of Justice, located in The Hague, Netherlands. Next, the Economic and Social Council assists the General Assembly in promoting economic and social development as well as the cooperation of member states. Finally, the Secretariat is the branch headed by the Secretary-General. Its main responsibility is providing studies, information, and other data when needed by other UN branches for their meetings. Today, almost every fully recognized independent state is a member of the UN. To become a member of the UN, a state must accept both peace and all obligations outlined in charter and be willing to carry out any action to satisfy those obligations. The final decision on admission to the UN is carried out by the General Assembly after recommendation by the Security Council.

THE CARIBBEAN COMMUNITY (CARICOM) The Caribbean Community (CARICOM) is a grouping of twenty countries whose intention is to function as a singular economic block. Its genesis came into being on 4 July 1973 with the signing of the Treaty of Chaguaramas by Prime Ministers Errol Barrow for Barbados, Forbes Burnham for Guyana, Michael Manley for Jamaica and Eric Williams for Trinidad and Tobago. The Treaty was later revised in 2002 to allow for the eventual establishment of a single market and a single economy. CARICOM rests on four main pillars: (i) (ii)

economic integration; foreign policy coordination;

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(iii) (iv)

human and social development; and security.

These pillars underpin the stated objectives of the Community which are: (a) (b) (c) (d) (e) (f) (g) (h)

to improve standards of living and work; the full employment of labor and other factors of production; accelerated, coordinated and sustained economic development and convergence; expansion of trade and economic relations with Third States; enhanced levels of international competitiveness; organization for increased production and productivity; achievement of a greater measure of economic leverage; effectiveness of Member States in dealing with Third States, groups of States and entities of any description; and (i) the enhanced coordination of Member States’ foreign and foreign economic policies and enhanced functional cooperation. Article 3 of the Revised Treaty of Chaguaramas states that: 1. Members of the Community consist of: (a) Antigua and Barbuda (b) The Bahamas (c) Barbados (d) Belize (e) Dominica (f) Grenada (g) Guyana (h) Jamaica (i) Montserrat (j) St. Kitts and Nevis (k) Saint Lucia (l) St. Vincent and the Grenadines (m) Suriname (n) Trinidad and Tobago. 2. Membership of the Community shall be open to any other State or Territory of the Caribbean Region that is, in the opinion of the Conference, able and willing to exercise the rights and assume the obligations of membership.

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THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)

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The North American Free Trade Agreement is a treaty between Canada, Mexico and the United States which came into force on January 1, 1994, and superseded the 1988 Canada–United States Free Trade Agreement between the United States and Canada. However, on September 30, 2018, the United States, Mexico, and Canada renegotiated the North American Free Trade Agreement. The new deal is called the United States-Mexico-Canada Agreement. It must be ratified by each country's legislature. As a result, it wouldn't go into effect before 2020. The Agreement has six main features— First, NAFTA grants the most-favored-nation status to all co-signers. That means countries must give all parties equal treatment, including in matters concerning foreign direct investment. They cannot give better treatment to domestic investors than foreign ones or offer a better deal to investors from non-NAFTA countries. Governments must also offer federal contracts to businesses in all three NAFTA countries. Second, NAFTA eliminates tariffs on imports and exports between the three countries. NAFTA created specific rules to regulate trade in farm products, automobiles and clothing. These also apply to some services, such as telecommunications and finance. Third, exporters must get Certificates of Origin to waive tariffs. That means the export must originate in the United States, Canada or Mexico. A product made in Peru but shipped from Mexico will still pay a duty when it enters the United States or Canada. Fourth, NAFTA establishes procedures to resolve trade disputes. Chapter 52 protects businesses from unfair practices. The NAFTA Secretariat facilitates an informal resolution between the parties. If this doesn't work, it establishes a panel to review the dispute. That helps all parties to avoid costly lawsuits in local courts. It helps the parties interpret NAFTA’s complex rules and procedures. These trade dispute protections apply to investors as well. Fifth, all NAFTA countries must respect patents, trademarks, and copyrights. At the same time, the agreement ensures that these intellectual property rights don’t interfere with trade. Sixth, the agreement allows business travelers easy access throughout all three countries.

THE WORLD TRADE ORGANIZATION (WTO) AND ITS DISPUTE RESOLUTION PROCEDURE What is the WTO? The WTO is the singular international organization which deals with th the global rules of trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. The organisation came into being in 1995 and is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. So while the WTO is relatively young, the multilateral trading system that was originally set up under the GATT is over 70 years old. The organisation’s functions in summary include— (a) Administering WTO trade agreements 3

https://www.thebalance.com/nafta-definition-north-american-free-trade-agreement-3306147

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(b) (c) (d) (e) (f)

Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations

In executing its functions, it is governed by several over-arching principles namely— 

Non-discrimination

A country should not discriminate between its trading partners and it should not discriminate between its own and foreign products, services or nationals. 

More open

Lowering trade barriers is one of the most obvious ways of encouraging trade; these barriers include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively. 

Predictable and transparent

Foreign companies, investors and governments should be confident that trade barriers should not be raised arbitrarily. With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition — choice and lower prices. 

More competitive

Discouraging ‘unfair’ practices, such as export subsidies and dumping products at below cost to gain market share; the issues are complex, and the rules try to establish what is fair or unfair, and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade. 

More beneficial for less developed countries

Giving them more time to adjust, greater flexibility and special privileges; over three-quarters of WTO members are developing countries and countries in transition to market economies. The WTO agreements give them transition periods to adjust to the more unfamiliar and, perhaps, difficult WTO provisions. 

Protect the environment

The WTO’s agreements permit members to take measures to protect not only the environment but also public health, animal health and plant health. However, these measures must be applied in the same way to both national and foreign businesses. In other words, members must not use environmental protection measures as a means of disguising protectionist policies.

How does its dispute resolution procedure work? There are two main ways to settle a dispute once a complaint has been filed in the WTO: (i)

the parties find a mutually agreed solution, particularly during the phase of bilateral consultations; and

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(ii)

through adjudication, including the subsequent implementation of the panel and Appellate Body reports, which are binding upon the parties once adopted by the DSB.

There are three main stages to the WTO dispute settlement process, namely: (a) consultations between the parties; (b) adjudication by panels and, if applicable, by the Appellate Body; and (c) the implementation of the ruling, which includes the possibility of countermeasures in the event of failure by the losing party to implement the ruling. Settling disputes is the responsibility of the Dispute Settlement Body which has the sole authority to establish “panels” of experts to consider the case, and to accept or reject the panels’ findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling. 

First stage: consultation (up to 60 days). Before taking any other actions the countries in dispute have to talk to each other to see if they can settle their differences by themselves. If that fails, they can also ask the WTO director-general to mediate or try to help in any other way.



Second stage: the panel (up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude). If consultations fail, the complaining country can ask for a panel to be appointed. The country “in the dock” can block the creation of a panel once, but when the Dispute Settlement Body meets for a second time, the appointment can no longer be blocked (unless there is a consensus against appointing the panel).

Officially, the panel is helping the Dispute Settlement Body make rulings or recommendations. But because the panel’s report can only be rejected by consensus in the Dispute Settlement Body, its conclusions are difficult to overturn. The panel’s findings have to be based on the agreements cited. The panel’s final report should normally be given to the parties to the dispute within six months. In cases of urgency, including those concerning perishable goods, the deadline is shortened to three months. The agreement describes in some detail how the panels are to work. The main stages are: (a) Before the first hearing: each side in the dispute presents its case in writing to the panel. (b) First hearing: the case for the complaining country and defence: the complaining country (or countries), the responding country, and those that have announced they have an interest in the dispute, make their case at the panel’s first hearing. (c) Rebuttals: the countries involved submit written rebuttals and present oral arguments at the panel’s second meeting.

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(d) Experts: if one side raises scientific or other technical matters, the panel may consult experts or appoint an expert review group to prepare an advisory report. (e) First draft: the panel submits the descriptive (factual and argument) sections of its report to the two sides, giving them two weeks to comment. This report does not include findings and conclusions. (f) Interim report: The panel then submits an interim report, including its findings and conclusions, to the two sides, giving them one week to ask for a review. (g) Review: The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides. (h) Final report: A final report is submitted to the two sides and three weeks later, it is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement or an obligation, it recommends that the measure be made to conform with WTO rules. The panel may suggest how this could be done. (i) The report becomes a ruling: The report becomes the Dispute Settlement Body’s ruling or recommendation within 60 days unless a consensus rejects it. Both sides can appeal the report (and in some cases both sides do).

Appeals Either side can appeal a panel’s ruling. Sometimes both sides do so. Appeals have to be based on points of law such as legal interpretation — they cannot reexamine existing evidence or examine new issues. Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body and broadly representing the range of WTO membership. Members of the Appellate Body have four-year terms. They have to be individuals with recognized standing in the field of law and international trade, not affiliated with any government. The appeal can uphold, modify or reverse the panel’s legal findings and conclusions. Normally appeals should not last more than 60 days, with an absolute maximum of 90 days. The Dispute Settlement Body has to accept or reject the appeals report within 30 days — and rejection is only possible by consensus.

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TUTORIAL QUESTIONS 1. What is CARICOM? 2. Read the Shanique Myrie case (uploaded on aerion) and explain the basis on the right to freedom of movement of CARICOM nationals and the extent of the right. 3. Under what instrument do CARICOM nationals have a right to free movement? 4. Identify at least four (4) rights CARICOM nationals have and give the legal basis for your answer. 5. What is the role/function of the United Nations? 6. What is the role/function of the WTO? 7. Briefly explain the dispute resolution mechanism of the WTO.

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