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Ascertain the functions of international law in the regulation of international economic relations. Essay

Ascertain the functions of international law in the regulation of international economic relations.

(Referring to Such Landmark Developments as the Changes in the Bretton Woods System and the GATT/WTO Changeover, Discuss What the Law’s Expanding Function)


(Referring to Such Landmark Developments as the Changes in the Bretton Woods System and the GATT/WTO Changeover, Discuss What the Law’s Expanding Function)


The role of international law on international relations specifically and with economic affairs of a country can be traced back from the history of merchants as early as 12th century. International law defines the boundary of economic relations. There are several Economic Trade Organizations and Trade NGO’s those regulate laws for international trade between different nation states but the need for a unified system is always present for better relations between all nations of the world. The Bretton Woods system for monitory and financial relations governed laws for international trade but a vacuum is left which was filled by New International Economic Order. With the replacement of GATT with WTO in recent years brought a new turn in contemporary commerce and law.


The pre World War II era can be considered as the advent of modern International relations and its impact on Trade. Its beginning is evident with role of Traders as Diplomats in twelfth century. It will be easy to understand and in depth analyses if we will discuss these laws and their role in regulating economic affairs.


            Law Merchant is the set of rules used in commercial transactions. These rules are not devised by states or jurisprudence but through continuous practice of traders. This law is the first known international law devised for the regulation of fair trade practices in different areas of the world. This body of rules was developed through common usage of traders and develops over a period of long time. It was practice in medieval Europe and England. It was due to the need of rapid and efficient justice.


There are different economic organizations formed for the provision of an international law and economic impact. These organizations have their chartered designed by the member countries after detailed analyses and consensus. Few famous among them are OECD, G8, APEC, ABEDA, AfDB, ADB, IMF, BSEC, G77, NAFTA, ECO, etc. The role of different economic organization and their law serve as a bridge between different nations. And provide a frame work for international law which helps in promoting and facilitating trade and commerce between nations. Trade always requires peace and harmony that is governed by these organizations.


Trade NGO’s are special type of NGO’s work for the purpose of trade and economic development. NGO’s are not profit, non governmental organizations work for the welfare of a people whereas trade NGO’s are special sort of organizations having purpose of facilitating trade. These organizations also devised laws for international trade. Different trade related initiatives are taken by Trade NGO’s those strengthen the bond between nations smooth the progress of economic affairs.


            New International Economic order is an instrument devised by developing countries to attain additional tariffs cuts from developed countries of the world, better and mutually beneficial trade terms and assistance from developed nations of the world. This proposal was put forward United Nations Conference on Trade and development. NIEO is designed to strengthen third world countries and focus on trade, commodity, debt related issues was laid down and it was make comfortable for both industrialized economies and developing entities to cooperate with each other in a more productive way. All developed countries trying their level beast to enforce NIEO and do not let it become a political ideological frame work.


Bilateral treaty approach refers to development of international laws to facilitate trade and economic relations between two or more countries those are consignee of that particular treaty. These treaties not only facilitate consignees but also help in regulating any dispute if arises during complete course of action.


Transactors refer to the economic agents or people dealing with receipt of incomes and transferring money to international or local buyers. Corrupt international Transactors refer to the flaws in practice of international transactions. Fraudulent payment or non payment, receipt and other forms of corruption are very common. Therefore it is essential for states and international bodies to overcome the problem because it is severely affecting economic relations between nations. It is not a problem of international law or legislation but a problem of implementation.


Several other legislations were are presented through international law like Cooperate Code of Conduct, Anti Corruption laws by reformist governments, Foreign corrupt Practice act, International anti bribery and Fair competition act of 1998 or regional controls like OECD Bribery convention 1997, and December 2003 convention against corruption etc.


Bretton Wood system is the set of rule formulated in 1944 by 44 countries of the world as a first consolidated document defining commercial and financial relations as well as monitory relations between different nation states. This agreement resulted in the formation of institutions like IMF and International Bank for reconstruction and development and devising a monitoring policy for member countries. But this system collapsed in 1970. “This crash is happening now. It is not a recession, it is not a soft landing; it is a full-scale collapse of the entire system.” (LaRouche, 2004) A critic argues that “the U.S. is now no longer a net saver with current account surpluses, as it was in the years immediately after World War II. (Dooley, 2004) liberal and open market economic structure also contributed for the fall of Bretton Wood system. Then a new international economic order is tried to propose for providing better opportunities to third world countries but this system has never implemented. In the light of change like depression, dollar value, changing ideologies remarkable changes are devised in Bretton Woods’s system and a new system was introduced which was termed as Bretton Woods System II by few concern parties.


With the replacement of GATT (General Agreement on tariffs and trades) with WTO (World Trade Organization the mechanism of international laws change drastically. The main pillars of conceptual frame work are “unconditional favored nation obligation, national treatment obligation, tariff binding commitment, quantitative restrictions elimination commitment.” (Hocket, 106) WTO turns a new life in the economic and international relations of different countries of the world. More opportunities will arise and open market policy for the whole world is implemented. Tariffs are removed or minimized. WTO is an international law that brought drastic change in the overall trade and economy of different countries of the world. WTO is not just a treaty or law between nation instead it is a new economic system and methodology for relations between different countries.


         International relation is a vast field and International laws are governed by the provision of universality rather than individual countries. The role of international law in designing international relations is a known truth. With the change in laws and advent of WTO role and nature of international relations will directly change and it will become require more skills and consistency to develop long tern and positive international and economic relations with different countries of the world.


Dooley, Michael, David Folkerts-Landau, and Peter Garber, 2003a, “Dollars and Deficits: Where Do We Go from Here?” Deutsche Bank Global Markets Research Newsletter, 2003.
Lyndon H. LaRouche. Jr, The New Bretton Woods System: Framework for a New, Just World Economic Order, 2001, retrieved on 12/17/06, retrieved from http://www.larouchepub.com/lar/2001/2808_sudan_keynote.html
Bretton Woods System, retrieved on 12/17/06, retrieved from www.wikipedia.com
Robert Hockett, Three (Potential)Pillars Of Transnational Economic Justice: The Bretton Woods Institutions As Guarantors Of Global Equal Treatment And Market Completion, January 2005, Blackwell Publishing, Vol.36,Nos.1/2,January 2005
Delphine De Mey And Pablo Ibanez Colomo, Recent Developments on the Invocability of WTO Law in the EC: A Wave of Mutilation, 2006, European Foreign Affairs Review 11: 63-86.(for deeper understanding of WTO)
Mark Jennings, The WTO And International Law: Mapping The Relationship, ANZSIL Conference 2004, Office of International Law, Attorney-General’s Department 1.
Solaman’s Book, Fundamental Perspective on International Law, (write about book you send jpg)

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