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.
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