Chapter 54 International and World Trade Law

The euro

is a single monetary unit that has been adopted by many countries of the EU that comprise the eurozone.

A bilateral treaty

is a treaty between two nations.

The choice of forum clause

(forum-selection clause) is a clause in an international contract that designates which nation's court has jurisdiction to hear a case arising out of the contract.

International law

All countries in the world are responsible for enacting __________________, and there is no single world court that is responsible for interpreting _____________________. Several courts and tribunals hear and decide international legal disputes, but parties have to agree to appear before those courts, and there is no world executive branch that can enforce _______________, so nations do not ultimately have to obey _________________ enacted by other countries.

Cambodia is a member nation of a regional association in southeast Asia along with Brunei, Indonesia, and Malaysia, among others. This association cooperates in promoting economic, political, and cultural issues and was founded in 1967. Cambodia is a member nation of the _______________________.

Association of Southeast Asian Nations (ASEAN)

The _________________________ is an association composed of the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.

Central America Free Trade Agreement (CAFTA)

Spain is a member of an important regional organization in Europe that works to promote peace and security as well as economic, social, and cultural development. The organization that Spain is a member of creates open borders for trade among its member nations and has eliminated customs tariffs among member nations. Spain is a member of the ____________________.

European Union (EU)

Giant Corporation Inc. is headquartered in the state of California. California, in order to protect California's ocean shores from pollution, enacts a state law that places a 10% tax on all water bottle sales in the state, whether the water is imported from foreign countries or bottled from a source in the United States. This law does not violate the _______________________ because it does not treat foreign commerce any differently than domestic commerce.

Foreign Commerce Clause

The _____________________ is the judicial branch of the United Nations, located in The Hague, the Netherlands.

International Court of Justice (ICJ; also known as the World Court)

_______________ is law that governs affairs between nations and that regulates transactions between individuals and businesses of different countries.

International law

Prior to 1992, your business, based in the northern United States, could not do business with Canadian suppliers because imports were heavily taxed, making the costs an unreasonable burden. After 1992, a new trade agreement reduced tariffs to the point that you were able to start dealing with Canadian suppliers. The trade agreement enacted in 1992 was the ________________________________.

North American Free Trade Agreement (NAFTA)

Oil is a natural resource that is highly valuable and can be used as leverage by companies and countries that produce and export large amounts of crude oil. In the 1960s, an organization was formed to ensure that oil companies could not unilaterally cut prices. The organization comprising many of the oil-producing and -exporting countries of the world is called _____________________________.

Organization of the Petroleum Exporting Countries (OPEC)

Penelope Greenwald is a member of a staff that administers the day-to-day operations of the United Nations. She works primarily in New York, and ultimately reports to the secretary-general. Penelope is a member of the __________________.

Secretariat

France is a permanent member nation of a council that is primarily responsible for maintaining international peace and security and has the authority to use armed force. The council that France is a permanent member of is called the UN ___________________.

Security Council

WTO panel

The dispute between Canada and France will be heard first by a three-member _____________. The members of this panel will be professional judges from member nations of the WTO, and the panel will issue a panel report containing the panel's findings of both fact and law and will additionally contain an order of a remedy if the panel finds a violation.

Organization of the Petroleum Exporting Countries (OPEC)

The organization comprising many of the oil-producing and -exporting countries of the world is called the

Foreign Commerce Clause

This clause—Article 1, Section 8, Clause 3 of the U.S. Constitution—gives Congress the power to regulate commerce with foreign nations and makes any state or local laws that unduly burden foreign commerce unconstitutional.

The state of Arizona attempts to enter into a treaty with the country of Canada that would reduce trade barriers between Arizona and Canada. This treaty would be a violation of the _______________, which gives the federal government the power to enter into treaties with foreign nations, but not the states.

Treaty Clause

Norway and Mexico have found themselves in a dispute over a possible breach of a trade agreement between the two countries. It was found by a WTO panel that Norway did, in fact, breach the trade agreement, and the WTO dispute settlement body adopted the panel report. Norway disagrees about the application of the law by the panel and dispute settlement body. Norway can appeal to the ____________________ to resolve these issues of law.

WTO appellate body

Canada has found itself in a dispute with France over the breach of a trade agreement that the two countries had formed. Canada decides to initiate a proceeding with the World Trade Organization about the breach that is believed to have occurred in their agreement with France. The dispute between Canada and France will be heard first by a three-member __________________.

WTO panel

Leonora Parks is the head of an organization that is an agency of the United Nations. It is the responsibility of her agency to provide money to developing countries. Under her leadership, the agency has funded thousands of projects for humanitarian purposes and relieved poverty in countries around the world. Leonora Parks is the head of the _______________.

World Bank

The _____________________ is an international organization of 160 member nations created to promote and enforce trade agreements among member countries and customs territories.

World Trade Organization (WTO)

World Bank

_________ comprises more than 180 member nations and is financed by contributions from developed nations, including the United States, the United Kingdom, Japan, Germany, and France. The _______________ headquarters are located in Washington DC, but it has branches around the world.

Secretariat

____________ currently comprises about 8,900 people stationed around the world. The budget for the ______________ is drawn from the approximately 170 member countries of the UN.

commercial activity exception

a foreign country is not immune to lawsuits in U.S. courts if an action based on a commercial activity is carried on in the United States or has a direct effect on the United States. Whether an action is defined as "commercial activity" is the most litigated aspect of FSIA.

National courts

are the courts of individual nations.

The _______________________ is a clause in an international contract that designates which nation's court has jurisdiction to hear a case arising out of the contract.

choice of forum clause (forum-selection clause)

A small country in South America has several state-owned enterprises for which it wants to raise capital. It does so by selling 20-year bonds to investors in the United States. Since the bonds are sold to bondholders in the U.S., the government of the South American country is involved in commercial activity in the U.S. If the country defaults and does not pay the bondholders the interest on the bonds, the bondholders can sue the South American country in U.S. court. The exception to the Foreign Sovereign Immunities Act (FSIA) the bondholders could sue under is called the _____________________.

commercial activity

The _____________________ is a doctrine stating that countries are granted immunity from suits in courts of other countries.

doctrine of sovereign immunity

NAFTA

eliminated or reduced most of the duties, tariffs, quotas, and other trade barriers among Mexico, the United States, and Canada. This has affected many industries, including agriculture, automobiles, computers, electronics, energy, financial services, and others.

Treaty Clause

gives the federal government the power to enter into treaties with foreign nations, but not the states. In treaties that are valid under the ___________, the president is the agent of the United States in dealing with foreign countries.

The WTO dispute settlement body

is a board composed of one representative from each WTO member nation that reviews panel reports.

choice of forum clause (forum-selection clause)

is a clause in an international contract that designates which nation's court has jurisdiction to hear a case arising out of the contract. The jurisdiction of international cases can be a complicated and highly contested issue, so if there is no agreement otherwise, a case that involves an international dispute will be brought in the national court of the plaintiff's home country.

The choice of law clause

is a clause in an international contract that designates which nation's laws will be applied in deciding a dispute arising out of the contract.

The Foreign Commerce Clause

is a clause of the U.S. Constitution that vests Congress with the power "to regulate commerce with foreign nations."

The European Union Commission

is a commission that is independent of its member nations, that has been delegated substantial powers, including authority to enact legislation and to take enforcement actions to ensure member nations' compliance with the European Union treaty.

The Security Council

is a council composed of 15 member nations, five of which are permanent members and 10 are countries chosen by the members of the General Assembly, that is responsible for maintaining international peace and security.

The Council of Ministers

is a council of the European Union (EU) that is composed of representatives from each member country who meet periodically to coordinate efforts to fulfill the objectives of the European Union.

doctrine of sovereign immunity

is a doctrine stating that countries are granted immunity from suits in courts of other countries. In other words, nations cannot be sued in U.S. courts; an individual cannot bring suit against the government of Canada in a U.S. court, providing that the action taken by the foreign nation did not fall under the commercial activity exception.

The act of state doctrine

is a doctrine stating that judges of one country cannot question the validity of an act committed by another country within that other country's borders. It is based on the principle that a country has absolute authority over what transpires within its own territory.

Islamic law (Shari'a)

is a law system that is derived from the Qur'an, the Sunnah (decisions and sayings of the prophet Muhammad), and reasonings by Islamic scholars and is the law of some countries, while in other countries it forms the basis of religious and family law.

The General Agreement on Tariffs and Trade (GATT)

is a multilateral treaty that establishes trade agreements and limits tariffs and trade restrictions among its member nations.

The WTO appellate body

is a panel of seven judges selected from WTO member nations that hears and decides appeals from decisions of the dispute-settlement body.

The Andean Community of Nations (CAN)

is a regional economic organization in South America composed of Bolivia, Columbia, Ecuador, and Peru.

The European Union (EU)

is a regional international organization that comprises many countries of Europe and was created to promote peace and security as well as economic, social, and cultural development.

A multilateral treaty

is a treaty involving more than two nations. Treaties (and conventions) address matters involving human rights, foreign aid, navigation, commerce, and the settlement of disputes between nations, and most treaties are registered with and published by the United Nations.

The Foreign Sovereign Immunities Act (FSIA)

is an act that exclusively governs suits against foreign nations that are brought in federal or state courts in the United States. It codifies the principle of qualified, or restricted, immunity.

The International Monetary Fund (IMF)

is an agency of the United Nations whose primary function is to promote sound monetary, fiscal, and macroeconomic policies worldwide by providing assistance to poor countries.

The World Bank

is an agency of the United Nations whose primary function is to provide money to developing countries to fund projects for humanitarian purposes and to relieve poverty.

The ASEAN-India Free Trade Area (AIFTA)

is an agreement between India and the member nations of the Association of Southeast Asian Nations (ASEAN) that reduces tariffs on products traded among signatory countries and provides for other economic coordination.

The ASEAN-Korea Free Trade Area (AKFTA)

is an agreement between Korea and the member nations of the Association of Southeast Asian Nations (ASEAN) that reduces tariffs on products traded among signatory countries and economic coordination.

The Association of Southeast Asian Nations (ASEAN)

is an association of many countries of Southeast Asia that provides for economic and other coordination among member nations.

The United Nations (UN)

is an international organization created by a multilateral treaty in 1945 to promote social and economic cooperation among nations and to protect human rights.

World Trade Organization (WTO)

is an international organization of 160 member nations created to promote and enforce trade agreements among member countries and customs territories. The _________ uses the process of negotiations among its membership to pursue its goal of achieving major reform of the international trading system by lowering trade barriers and implementing revised trade rules.

Jewish law

is complex law based on the ideology and theology of the Torah, which prescribes comprehensive and integrated rules of religious, political, and legal life that together form Jewish thought.

International Court of Justice (ICJ; also known as the World Court)

is the judicial branch of the United Nations, located in The Hague, the Netherlands. Only nations can have cases decided by the World Court. The World Court hears cases that nations refer to it, as well as deciding cases involving treaties and the UN Charter.

Canon law

is the laws and regulations that have been adopted by Catholic and other Christian ecclesiastical authorities that relates to internal laws that govern the church and its members, definition of faith, rules of conduct, laws of marriage, and laws of inheritance.

The General Assembly

is the legislative body of the United Nations that is composed of all UN member nations.

secretary-general

is the person who heads the Secretariat of the United Nations. The _____________ is elected by the General Assembly of the United Nations and may use his or her office to assist in solving international disputes. The __________________ may also refer matters that threaten international peace and security to the Security Council.

Organization of the Petroleum Exporting Countries (OPEC)

member nations include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates (UAE), and Venezuela.

A _____________________ is a treaty involving more than two nations.

multilateral treaty

The _________________ heads the Secretariat of the United Nations.

secretary-general

A _________ is an agreement between two or more nations that is formally signed by an authorized representative of each nation and ratified by each nation.

treaty