Key Concepts in International Law and Trade

International law enforcement

Nations are sovereign—no higher global authority exists to enforce laws. Compliance is voluntary, and enforcement is limited to sanctions, boycotts, or diplomacy.

Evolution of international law

International law has evolved to address international trade and commercial relationships.

Sources of international law

1) International customs, 2) Treaties, 3) Agreements between nations.

World Trade Organization (WTO)

To promote free trade by achieving most-favored nation status and normalizing trade relations.

Bilateral vs Multilateral agreements

Bilateral = 2 nations; Multilateral = more than 2 nations (e.g., NAFTA, EU, ASEAN).

Trade agreements objectives

Eliminate trade barriers, enable cross-border trade, and sometimes create international court jurisdiction.

Comity in international law

One nation defers to another nation's laws if they don't conflict with public policy.

Act of State Doctrine

U.S. courts won't examine the validity of another country's public acts within its borders.

Expropriation vs Confiscation

Expropriation = taking property with compensation; Confiscation = without compensation.

Sovereign immunity

Foreign countries are immune from U.S. court jurisdiction unless exceptions apply (e.g., commercial activity in U.S., terrorism, or waiver of immunity).

Direct vs Indirect exporting

Direct = exporter deals directly with buyer; Indirect = uses agents, distributors, or intermediaries.

Indirect international business methods

Licensing, franchises, appointing foreign agents, distribution contracts, manufacturing abroad, joint ventures, subsidiaries.

Tariffs and quotas

Tariffs = taxes on imports; Quotas = quantity limits on imports or exports.

Dumping in international trade

Selling goods below fair market value to outcompete local businesses—considered illegal and unfair.

Common law system features

Based on case law, judicial precedent, active judiciary, and used in former British Empire countries.

Civil law system features

Based on written codes, passive judiciary, judges apply codified laws without creating law.

Foreign Corrupt Practices Act prohibition

U.S. businesses from bribing foreign officials to gain contracts.

Goal of the Foreign Corrupt Practices Act

To prevent corruption and level the playing field for international business.

New York Convention

It requires arbitration in international trade disputes.

Foreign Selection Clause

A contract clause that chooses which country's laws and courts will handle legal disputes.