Tuesday 11 June 2013

THE BASIS OF INTERNATIONAL ECONOMIC LAW

THE BASIS OF INTERNATIONAL ECONOMIC LAW
The traditional principles of international law such as pacta sunt servanda, freedom, sovereign equality, reciprocity and economic sovereignty are also treated as the basis of the international economic law.[1] Furthermore, international economic law also based on modern and evolving principles such as:
a)      The duty to co-operate,
b)      Permanent sovereignty over natural resources
c)   Preferential treatment for developing countries in general and the least-develop countries in particular.
All the international law came from the same sources which are from Article 38(1) of the Statute of the International Court of Justice. Same article is applicable to the international economic law. In the article, it was stated that in deciding the international dispute, the Court shall apply:[2]
a)      International conventions, whether general or particular, establishing rules recognized by the contesting states;
b)      International custom, as the evidence of a general practice accepted as law;
c)      The general principles of law recognized by civilised nations;
d)     Subject to the provision of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.

PRINCIPLES OF INTERNATIONAL ECONOMIC LAW
United Nations General Assembly Special Sixth Session in 1974 adopted the New International Economic Order (NIEO) the Charter of Economics Rights and Duties of States (CERDS) of 1974 as part of its resolutions.[3] The purpose is to restructure the international order toward greater equity for developing countries, particularly in reference to a wide range of trade, financial, commodity, and debt-related issues.[4] Fundamentals of international relations are stated in Chapter 1 of the Charter where the economic as well as other relations among states shall be governed by several principles. The principles are sovereignty, territorial integrity and political independence of States, sovereign equality of all States, non-aggression, non-intervention, mutual and equitable benefit, peaceful coexistence, equal rights and self determination of peoples, peaceful settlement of disputes and remedying injustices which deprive a nation for its development. Besides that, other principles which are listed altogether are fulfillment of good faith and respect of human rights of international obligations, no hegemony and spheres of influence, promotion of international social justice, international co-operation for development and free access to and from the sea by land-locked countries within the framework of all the aforementioned principles.[5]
            Chapter II of the charter on Economic Rights and Duties of States in Articles 1, 2, 4 and 5 stated the economic rights and duties of states in detail where:[6]
 Article 1
Every State has the sovereign and inalienable right to choose its economic system as well as its political, social and cultural systems in accordance with the will of its people, without outside interference, coercion or threat in any form whatsoever.
Article 2
1. Every State has and shall freely exercise full permanent sovereignty, including possession, use and disposal, over all its wealth, natural resources and economic activities.
2. Each state has the right:
(a)        To regulate and exercise authority over foreign investment within its national      jurisdiction in accordance with its laws and regulations and in conformity with its      national objectives and priorities. No State shall be compelled to grant preferential          treatment to foreign investment;
(b)       To regulate and supervise the activities of transnational corporations within its     national jurisdiction and take measures to ensure that such activities comply with its            laws, rules and regulations and conform with its economic and social policies.             Transnational corporations shall not intervene in the internal affairs of a host State.   Every State should, with full regard for its sovereign rights, cooperate with other            States in the exercise of the right set forth in this subparagraph;
(c)        To nationalize, expropriate or transfer ownership of foreign property, in which case         appropriate compensation should be paid by the State adopting such measures, taking            into account its relevant laws and regulations and all circumstances that the State       considers pertinent. In any case where the question of compensation gives rise to a controversy, it shall be settled under the domestic law of the nationalizing State and by             its tribunals, unless it is freely and mutually agreed by all States concerned that other      peaceful means be sought on the basis of the sovereign equality of States and in         accordance with the principle of free choice of means.
Article 4
Every State has the right to engage in international trade and other forms of economic cooperation irrespective of any differences in political, economic and social systems. No State shall be subjected to discrimination of any kind based solely on such differences. In the pursuit of international trade and other forms of economic cooperation, every State is free to choose the forms of organisation of its foreign economic relations and to enter into bilateral and multilateral arrangements consistent with its international obligations and with the needs of international economic cooperation.
Article 5
All States have the right to associate in organizations of primary commodity producers in order to develop their national economies, to achieve stable financing for their development and, in pursuance of their aims, to assist in the promotion of sustained growth of the world economy. In particular accelerating the development of developing countries. Correspondingly, all States have the duty to respect that right by refraining from applying economic and political measures that would limit it.
            These provision in the charter was not having a binding legal effect, but many of the principles laid down in the Charter have been referred as representing the basis for the international economic law development. The most important principle in the international economic law is the right for the state to develop their own economic. This right should be maintain in order to sustain the economic development and prevent the state from being isolated in the economic arena. This is because, one of the vital elements of New International Economic Order (NIEO) and the Charter of Economics Rights and Duties of States (CERDS) was the economic development of states. The right of economic development then strengthened through a 1986 resolution of the UN General Assembly the article 1 and 2 of the resolution.[7]
            These right to development in the 1986 resolution enabled the international States develop and support any other principles regarding international trade and development. Furthermore, it also trigger the spirit for the developing countries to get special and preferential treatment in order to them to grow and strengthens their international economic. Besides that, it also realized the community on the need to address the problem of the international debt.[8]





[1] Professor S.P Subedi, University of Leeds, (2006), International Economic Law, Section A: Evolution and Principles of International Economic Law, University of London 2007, pg 22.

[2] Article 38 of the Statute of International Court of Justice.

[3] ‘Declaration for the Establishment of a New International Economic Order’, United Nations General Assembly document A/RES/S-6/3201 of 1 May 1974. http://www.un-documents.net/s6r3201.htm .[11 May 2013].
[4] ‘Declaration for the Establishment of a New International Economic Order’, United Nations General Assembly document A/RES/S-6/3201 of 1 May 1974. http://www.un-documents.net/s6r3201.htm .[11 May 2013].

[5] UN Document of General Assembly 1974, Chapter 1 of the Charter of Economic Rights and Duties: Fundamentals of International Economic Relations.  

[6]  UN Document of General Assembly 1974, Chapter 1 of the Charter of Economic Rights and Duties: Fundamentals of International Economic Relations.  
[7]  Professor S.P Subedi, University of Leeds, (2006), International Economic Law, Section A: Evolution and Principles of International Economic Law, University of London 2007, pg 26.

[8]  Professor S.P Subedi, University of Leeds, (2006), International Economic Law, Section A: Evolution and Principles of International Economic Law, University of London 2007, pg 27.