International Business: Trade Dynamics and Anti-Dumping Actions

International Business Actors and Sources

STUD
DI BOLOGNA
RUM
International Business
Actors and sources of Intl Business
Lorenzo Sasso, Ph.D (LSE)
Professor at MGIMO (Moscow)
October 2024
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International Trade Definition and Relations

What is Intl. Trade
. Definition: "the commercial transactions which are
characterised by an international nature due to their
connection to more than one State or to their role in the
international economic relations".
· Relations between States
. Transnational economic transactions between private
persons and private juridical persons who belong to
different States
. The International economic transactions are
exportations, importations and investments.
. They are characterised by the economic uniformity, and
therefore it becomes difficult to distinguish the profiles of
International Law (private and public) and commercial
law.
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Markets, States, and Economic Transactions

Markets tend to be cosmopolitan
- States NO!
. This conflict lies at the heart of all the challenges created by
global economy.
· Economic transactions concern goods, services and
production factors (land, capital and work). However what
characterise States in the economic reality is its capacity to
limits these factors in the economic transactions
. Nowadays virtually all countries apply restrictions, not on the
production factors maybe but on the foreign direct
investments (on propriety rights for example or on workers)
· markets depend on States which, in order to support them,
implement a determined system of rules (legal order and legal
system)
. And still ... States control only a fraction of the market
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Regulation of International Markets

International Treaties and Conventions

• International Treaties, Conventions, Agreements

- Treaties can be bilaterals; multilaterals and
plurilaterali; they must be interpreted in context
considering the aim they want to reach and their
object (teleologica)
· UNCITRAL (1966 in force 1968 for harmonize trade law)
· The Vienna Conv. 1980 on international sale of goods
(movable goods)
· the Monaco and Washington Conventions on
international intellectual property rights
. However the 1988 Convention on bills of exchange and
promissory notes applies only to civil law countries
. And the Convention of Rome 1980 on the applicable law
to contractual obligations (Rome I)
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Law Produced by International Organizations

WTO Agreements and Implementations

• Law produced by International Organizations (Or
  International Governamental Organizations IGO)
• WTO (180 member States; the General Council and a Ministerial
  Conference once every two years) it facilitate and promote multilateral
  commercial agreements, settle any dispute arising among countries
• Among its agreements there are :

. Genaral Agreement of Tarifs and Trade (GATT)
. General Agreements on Trade in Services (GATS)
· Trade Related aspects of International Property rights (TRIP)
· Dispute settlement (DSU)

• However it was unable to implement:

· Code of Conduct for Transational Corporations (1976, 1990)
· Norms and Responsibilities of Transnational Corporations (1999)
. The OECD Guidelines for Multinational Enterprises (OECD 1976 , 2000)
· UNCTAD Code of conduct transfer of technology (1977)
. ILO Tripartite declaration concerning multinational enterprises (1977,
2000)
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WTO Principles of Trading Systems

Non-Discrimination and Free Trade

• Non discrimination

- The most favoured nation (MNF) rule: requires that a WTO
member must apply the same conditions on all trade with other
WTO members
- National treatment policy means that imported goods should be
treated no less favorably than domestically produced goods and
was introduced to tackle non-tariff barriers to trade (e.g. technical
standards, security standards et al. discriminating against imported
goods)
· Free Trade through negotiation (limit to tarif measures)
· Predictability through binding and transparency
members are required to publish their trade regulations, to maintain
institutions allowing for the review of administrative decisions affecting
trade, to respond to requests for information by other members, and to
notify changes in trade policies to the WTO
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Exceptions to WTO Principles

Safety Valves and General Exceptions

EXCEPTIONS TO THE PRINCIPLES
Safety valves (art. XIX GATT) : In specific circumstances, governments are
able to restrict trade. The WTO's agreements permit members to take
measures to protect their economies and the environment or other general
collective interests like public health, animal health and plant health.

1. Imported quantities increased to the point that they may seriously
   jeopardise national producers of similar goods or directly competitors;
2. Principle of strict proportionality between the nature of measure, its time
   of application and the necessity to prevent or avoid the damage
3. Obligation to notify WTO about the adoption of such measures

General exceptions (ex. Protection of national tresures, natural resources
etc.)
Exceptions concerning national security (traffic of weapons, radioactive
material as uranium etc.)
Exceptions targeted to favour regional economic integrations and
developing countries (which benefit of a privileged tarif treatment of free
trade)
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Trade Defense Actions

Anti-Dumping Measures and Protectionism

Trade defense actions
(Anti-dumping)
. Dumping is a kind of predatory pricing , especially in the
context of International Trade. It occurs when
manufacturers export a product to another country at a
price either below the price charged in its home market or
below its cost of production

• It is possible for a State to take defensive measures
  however there must be a community interest (national
  industry and not a single individual)

· There must be a double condition (existence of such anti-
competitive practicies and a serious damage for the
industry)
. There must be a nexus of casuality (one is consequence of
the other)
· Side effects of protectionism in a growing industry can be:
1) Cost for consumers; 2) Limitation of the industry to the
domestic market; 3) Restraint of the external competition
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Applicability of Rules in the European Community

EU Membership and Citizen Protection

APPLICABILITY OF THESE RULES IN THE EUROPEAN
COMUNITY
The EU is member of WTO, but denies the direct effect of
the norms included in these accords. Therefore these
cannot be invoked by single citizens to dispute the
legitimacy of a EU norm. (EC Regulation 22 December
1994)
However, it stands an indirect protection: if EU
Regulations or Directives are passed in contrast with
WTO reccommendations, citizens are entitled to submit
to the authorities of their countries a formal complain.
This is what it happens in cases of antidumping
measures, aids of State and technical barriers to trade.
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World Bank Group and Uniform Law

Political Agenda and Soft Law

World Bank Group
· IBRD, IDA, IFC, ICSID and MIGA + IMF
- They have a political agenda realized through
economic means
- Main shareholders are USA, Germany, France, UK,
Japan
- Consensus mechanism
. Conclusions regarding the uniform law produced
by IGOS
- Solemn declarations of principles but mainly soft law
- Different the case of IGO pursuing political objectives
with economic tools but mainly highly politicized
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Non-Governmental Organizations and Codes of Conduct

MNEs and Entrepreneurial Categories

NON-GOVERNMENTAL ORGANIZATIONS
. They are a various multitude of entities
· Codes of Conducts drafted by NGOs for the
purpose of addressing MNEs towards ethical rules
in their economic activities (guidelines)
. There are of two types
- Adopted by the MNEs holding companies and
imposed to their everywhere operating subsidiaries
- Drafted by the international associations of the
enterpreneurial categories (rules that members are
forced to accepts to be part of the association)
. The result is poor (mostly not enforceble law)
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Technocratic Production of Uniform Law

International Standards and Rating Agencies

Technocratic production of uniform law
. Not norms or principles but international standards.
- The concept expresses a uniform treatment of the parties
in markets (whatever is the modality to realize it). It may
originate from the application of laws which are common in
most of the developed countries or from technical rules,
they just need to be universally accepted (see for ex. the
International Protocols for professional bodies) . They can
be uniform law adopted by Conventions between States
(see The Vienna Conv .; The Eu Conv. on Human Rights)
· International Accounting Standard Boards
· International "Rating" issued by Credit Rating Agencies
· New properties created by law firms
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Lex Mercatoria and Economic Evolution

Mercantilism to Post-Industrial Age

Lex mercatoria
. In the years ante-industrial revolution (XVII and XVIII ), law
and economy were strictly interconnected. That was the age
of mercantilism: the active actor was not the producer but the
merchant (mercator). Age of protectionism (pump the export
while reducing the imports). The State as a legal system does
not exist (the Monarch represents the State and takes
decisions of pol.econ.)
· Lex Mercatoria grows as a system of laws created and
imposed by the class of merchants. No political compromises
or borders. It achieved the uniformity of the law in the unity of
markets (diverging from Roman Law and Canon Law existing
at that time).
· Law and Economy split with the raising of Illuminism and
Industrial Revolution and the emerging of a "state of law". The
previous particularism of professional classes is replaced by a
political particularism made by States

• It is the time of codification of the law (civil and common law
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Modern Economic Convergence

Continue
· During the XIX cent. strong State political economy
· Liberism triumphs over Mercantilism
. At the end of the XX cent. US President Carter launch de-
regulation of the economy
. Law and Economy converge again in post-industrial age
- Society of dematerialised richness
- New properties (financial products, trade marks, financial
contracts)
· Capital becomes multi-sectorial (industrial, commercial, bank)
· Contracts replace States in protecting collective interests (see
The Advertising Standards Authority and its code of adv. Practice
. New economy is global (transnational) and continously evolving
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