International Contracts Slide Set 1a

1. International ContractsSlideSet 1a The Legal Environment of International Markets Matti Rudanko

2. 1. INTERNATIONAL TRADE POLICY • Starting point: closed (national) markets int’l market National market (State A) B D C International Contracts 1a

3. The Goal: Global Free Trade • Integrated national and international market B A C D International Contracts 1a

4. economic growth (efficiency; the Coasian model) global welfare and the interests of developing countries ? political/cultural influence and added economic resources help to strengthen democracy and improve social structures ”race to the bottom” in social protection free trade tends to bring welfare especially to those who are already well off multinationals industrialized countries (non-democratic) governments of developing countries cf. the Rawlsian concept of justice Free trade: advantages/drawbacks International Contracts 1a

5. Importance to companies • level playing field • global markets • reduced risks related to foreign markets • market strategies, e.g. • pricing policies • marketing • establishing abroad International Contracts 1a

6. Commercial policy instruments I • Reaction by: government (the state) • WTO : harmonization of national (and EU) measures • EU: replaces national norms • allowedgrounds: • market disruptions: GATT art. XI, XIX • COUNCIL REGULATION (EC) No 260/2009 on the common rules for imports • barriersto trade • dumping International Contracts 1a

7. Commercial policy instruments II • Purposes aimed at: • equilibrium of the balance of payments • ensuring foreign trade • other national economic goals: economic growth, production, employment • Measures: • trade monitoring; licenses, import permits • price undertakings / anti-dumping duties International Contracts 1a

8. Rules for Imports • GATT art. XI, XIX, COUNCIL REGULATION (EC) No 260/2009 on the common rules for imports • reactions: surveillance, safeguardmeasures(including import quotas under auspices of WTO) • allowedgrounds: • domesticagriculturaloverproduction • balance of paymentproblems • foreigntrade of developingcountries International Contracts 1a

9. Rules for Imports, cont. • Examination of the trend in imports and of serious injury or threat of serious injury to Community producers resulting from such imports shall cover in particular: • (a) the volume of imports, • (b) the price of imports, • (c) the consequent impact on Community producers as indicated by trends in certain economic factors such as: • production, capacity utilisation or stocks, • sales or market share, • prices, profits or cash flow, • employment International Contracts 1a

10. Control of Barriers to Trade • target: publiccommercialpolicymeasures • conflicting with international law and rules of international trade • such as: • duties and otherpayments • quantitativerestrictions(EU Regulation260/2009, GATT XIX) • technicalbarriers (safety and otherregulations) • statesubsidies • diskrimination in publicprocurement • divergent IPR protection • reaction: counter-measures (e.g. EUReg. 260/2009) International Contracts 1a

11. Imposing anti-dumping duties Requirements for imposing anti-dumping duties (EU regulation): a realized / imminent substantialdamage to corresponding EUproduction causal relationship to the export interest of the Community Dumping Control anti-dumping duty normal value = selling price on the home market of the export country or the export price toanother country export price International Contracts 1a

12. Allowed protection/protectionism National Supporting and Protective Measures National Supporting and Protective Measures Allowed interests Prohibited protectionism Protection of health National safety Consumer protection National culture etc. International Contracts 1a

13. Pricing on International Markets The Legal Framework of International Pricing Commercial Policy Instruments Competition Law Marketing Law Antí-dumping Norms Market Disruption Norms Marketing Norms CartelsTreaty art. 101 DominantMarket Position 102 Merger Control Trade BarrierNorms International Contracts 1a

14. Impact of Competition Law • Both public and private interests • sound and efficient competition • the interests of customers and consumers (sometimes those of a competitor) • initiative to reactions comes from private actors / supervision authorities • the sanctions are effected by authorities • prohibitions, economic sanctions • damages liability, nullity of illegal transactions of cartels and monopolies (decided in national general courts) International Contracts 1a

15. Impact of Marketing Law • Private interests • legal protection of consumers / competitors • Consumer Protection Act / Act on Improper Business Practices • the reaction follows on the initiative of a private actor or an authority • the reaction is effected by the authority • a ban on the marketing practice International Contracts 1a

16. Trade Policy harmonized with WTO Rules Developmentcooperationpolicy Treaty on the functioning of the European Union TFEU 2008 replacing the Treaty Establishing the EEC 4(4), 208, 214, Treaty on the European Union TEU or Maastricht Treaty 3(5), 21 sustainabledevelopment interestsof developingcountries eradication of poverty Common Policies of the EU International Contracts 1a

17. Actors and Structures of World Trade • Actors Citizens’ organizations Multinationals Industrialized countries Smaller companies World Trade WTO OECD Etc. Developing countries UNCTAD Trade unions “Nations” Governments International Contracts 1a

18. WTO and OECD • The pivotal groupings of world trade Outside countries WTO (159 members) USA OECD (34 members) JAPAN EU International Contracts 1a