Introduction – What Is International Economic Law
International Economic Law is the law governing the economic interaction between and among nations. It is broadly defined to cover private and public international law of trade, international commercial law, and international finance and investment.
- International Trade Law – including GATT, WTO and domestic trade laws
- International Economic Integration Law – including the EU, NAFTA and Mercosur
- Private International Law – including jurisdiction, venue, enforcement and law of international commerce
- International Business Regulation – including anti-trust law, competition law, environmental regulation and public safety.
- International Financial Law – including transactional law, regulatory law, foreign direct investment, World Bank, IMF
- Role of law in development
- International Tax Law
- International Intellectual Property Law
Principles of International Economic Law – Basis
- International equality of sovereignty
- Economic Sovereignty
- Duty to Cooperate
- Sovereignty over natural resources
- Preferential treatment for emerging countries
The sources are the same as Article 38 of the Statute of the International Court of Justice.
One of the critical components of national independence is the ability of a nation to exercise sovereignty over their economic resources and future. Historically, many nations that originally were colonies of the major economic powers became independent with prior concessions intact. When these countries decided to exercise that sovereignty, the first elements faced were ones of control over economic goods and services. In many cases, the concessions were so significant that the nations needed to foreclose the concessions in order to begin to exercise effective sovereignty.
The tension between this need for exercising sovereignty and also not having retaliation against their assets overseas led to the development of the principle of Permanent Sovereignty over Natural Resources (PSNR). In 1962, the UN passed a resolution in the General Assembly that called for the rights of peoples to exercise permanent sovereignty in their national natural resources, that the exploitation of those resources should be in line with national and international convention and law, and that nationalization was permitted if necessary with sufficient compensation, and agreements in this area regarding foreign investment must be honored. The 1962 resolution received unanimous support in the UN General Assembly.
Charter of Economic Rights and Duties of States (CERDS)
As part of the NIEO movement, the UN passed the Charter of Economic Rights and Duties of States (CERDS) in 1974.
Chapter 1 of the Charter outlines the fundamentals of international
relations in the following words:
Economic as well as political and other relations among states
shall be governed, inter alia, by the following principles:
a. Sovereignty, territorial integrity and political independence of States;
b. Sovereign equality of all States;
e. Mutual and equitable benefit;
f. Peaceful coexistence;
g. Equal rights and self-determination of peoples;
h. Peaceful settlement of disputes;
i. Remedying of injustices which have been brought about by force and which deprive a nation of the natural means necessary for its normal development;
j. Fulfillment in good faith of international obligations;
k. Respect for human rights and international obligations;l. No attempt to seek hegemony and spheres of influence;
m. Promotion of international social justice;
n. International co-operation for development;
o. Free access to and from the sea by land-locked countries within the framework of the above principles.
CERDS provides that nations have the right to choose their economic, political and cultural systems without influence or threats from outside. CERDS also grants the right for nations to exercise permanent sovereignty over their natural resources, regulate international investment, regulate transnational corporations, limit the ability of transnational corporations to influence national governments, to nationalize resources with compensation, for states to engage in international trade and set regulations around that trade, and to direct the future development of their economies.
CERDS is “soft law”, and does not have binding legal effect. However, it has significant influence over how nations view their ability to operate and how disputes are resolved.
In 1986, the UN General Assembly reiterated the right to development as a human right, and moved to protect the freedom of people and nations to freely choose their method of development , control their resources and regulation to facilitate that development, and noting that development and advancement is the responsibility of all persons.This framework may have led to the development of the Millennium Development Goals in 2000.
Sustainability and Development of Natural Resources
In addition to the passage of CERDS in 1974, The United Nations Conference on the Human Environment in 1972 published the Stockholm Declaration (1972). The Stockholm Declaration called on the conservation of natural resources, particularly flora and fauna, and the need to manage and preserve the Earth’s renewable resources. The 1972 Stockholm Declaration was the first UN declaration to move to limit the free use of natural resources by state actors. other treaties and agreements addressing these issues at the same time included:
• the 1968 African Convention on the Conservation of Nature and Natural Resources
• the 1985 ASEAN Agreement on the Conservation of Nature and Natural Resources
• the 1971 Ramsar Convention on Wetlands
• the 1973 Convention on International Trade in Endangered Species of Wild Fauna and Flora
• the 1979 Bonn Convention on the Conservation of Migratory Species of Wild Animals
• the 1991 Protocol on Environmental Protection to the Antarctic Treaty.
Up until this time, the focus of the UN and the NIEO was to secure the sovereignty of nations over their natural resources. Article 21 of the Stockholm Declaration moved to balance this against environmental concerns. in 1974, CERDS addressed this as well in Article 30, looking to reconcile the need for both economic and environmental balance.
In 1982, the UN passed the World Charter for Nature and the UN Convention on the Law of the Sea.This began the explicit integration of the balancing of the preservation of the environment, the preservation of natural resources and the sustainable use and development of those resources with permanent sovereignty over those resources. In 1985, the Brundtland Commission developed the concept of “sustainable development”, calling on nations to develop within a framework that includes limiting the degradation of the environment. The Commission defined the term ‘sustainable development’ as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’.
Finally, in 1992, the Rio Conference convened to discuss and provide guidelines for sustainable development. Rio made a declaration that balanced the right of a nation to exploit their natural resources with the duty to preserve and use them to ensure their availability for future generations. Additionally, coming out of Rio was the UN Convention on Biological Diversity. The agreement reinforced the need to maintain sovereignty over natural resources, but added that maintenance of natural resources, biological diversity and required that they use their resources in a responsible, sustainable manner with due respect for the environment.