International Trade Law
Prof. Leonard Long-Quinnipiac Law School
Spring Semester 2014
(A- Final Grade by student using this outline)
· 4 channels
· Opium Wars
o European attempt to balance trade imbalance by force by creating an opium market in China.
§ China exported but wouldn’t allow European imports
o Roman Empire
§ Alternative to war is trade
· Both to acquire something
§ Transport network built for this purpose
§ Either trade willingly, go without, or go to war, then as now…
o Difficult for a country to meet all its demands domestically
§ Look at Apple
§ Yale even these days with their Chinese branch
· Can be services too
o 4 channels
§ Goods
§ Services
§ Tech(Licenses, patents)
§ Direct foreign investment
· Export Controls
o Tariffs in seller’s own country to discourage export.(Keep your resources local)
o Could also simple prohibit but extreme
· Import Control
o Tariffs on imports to protect domestic industry
o Traditional realm of General Agreement on Tariffs and Trade
§ GATT
§ Essentially formed entirety of subject matter of IT for 50 years after WWII.
§ GATT supplanted now, but forms basis so very important
§ Also, GATS
· Classifies modes for services
o Buyer seller remaining in home territory (frequently via telecom or other form of communication)
o Services provided to user who travels to territory of provider.(Tourism as example)
o Also inverse, you go somewhere to provide services(International lawyer)
· GATS designed to regulate opening up of markets in WTO
§ WTO has replaced GATT
o Services fastest growing sector in US
§ GATS categorizes services by mode of delivery
§ Categorizing by type of services would be too cumbersome
· Trade in Tech
o Generally licensing or assignment of intellectual property rights across borders.
o In context, US owner licenses Germans
§ First registers patent under German law before licensing
§ This b/c US patent limited to territoriality
§ So must register in each country where you’re going to do business.
§ The German patent could later be transferred without transferring the patent in the US
· Re: territoriality
§ Again, once you have, would also just license for limited time and place
o TRIPS
§ sets default rules for tech transfer for all WTO members
§ Can be negotiated around by parties in contract, but they are an extremely useful default.
§ A US tech owner would be less likely obviously to license to a nation that is not a strong intellectual property rights enforcer:
· China’s a sterling example of this
· Big issue for US companies and western pharmaceutical companies.
· Foreign Direct Investment
o Normally culmination of the other 3 channels building up for companies.
o Can form a subsidiary
o Could also just do so via an elaborate contract system
· Make sure you process and understand GATT, GATS, and TRIPS and what they apply to
· Foreign direct investment lacks a comprehensive agreement
o There is TRIMS, but it’s very limited in scope, and really just builds on some elements of GATS
o It also doesn’t have the liberalizing goals of GATT, GATS and TRIPS
· Because international trade can be divided into these 4 channels,
For Wednesday, problem 1-1
p.7
1-1. As the GATT is not self-executing, a case challenging the legality of a state law on the basis of the treaty alone could not go forward. The ICJ is probably a better venue for this.
· Correct, not self-executing so produces no cause of action or jurisdiction to determine law’s sufficiency.
· Could sue on implementing provisions in federal law if state law violates federal, but not on treaty itself.
1-2 Issues
· Contract issues abound, even if this were a domestic contract, such as insurance, right of inspection prior to purchase, etc.
· Also choice of law issues between Country Z, USA, and international treaties on Contracts.
· Public law/International Trade Law
o Export issues, advanced tech might pose a national security interest to the USA.
§ military and espionage purposes or e-theft are a problem
· A “duel use” item
§ also Z might be pl
nization” with quite a bit of resentment.
· 50+ years of CIA coups anyone?
o In 1960’s developing countries formed UNCTD, now has more power in may ways than developed countries, in large part because of China and Brazil.
§ These two have become the “leaders” of the pack for the UNCTD, in essence.
§ Also ascendance of UNCTD is due to more pluralist and humanist (poverty) views on trade.
· China is ascendant because so many people build plants there and bring in expertise from abroad that then basically gets scalped by the Chinese.
· So moral of story is if these multinational countries didn’t want to compete with autonomous Chinese tech companies, they shouldn’t have put their plants there.
o China’s also strange in that they’re trying to dominate all industrial processes, not specializing in hi-tech or low-tech, but doing both.
o Domination like this has the same inherent problems as monopoly, basically.
· Always remember that purpose of trade it to acquire things you don’t have in exchange for things you have plenty of… That’s why isolationism is inefficient.
o Wealth also can increase on both ends due to relative value markets.
· Many developing countries were wary of trade due to fears of social change, destabilization and exploitation. (Colonial legacy)
o This has really changed in the past decade, as developing countries have become much more involved in trade and benefitted from it.
§ Sterling examples are Taiwan and South Korea.
§ Many developing countries want the kind of success from trade, but try to balance that with protecting their national characteristics.
§ Politics plays a huge role here, with many developing countries arguing for special treatment b/c GATT screwed them over for decades.
