International trade law includes the appropriate rules and customs for handling trade between countries.[1] “However, it is also used in legal writings as trade between private sectors. This branch of law is now an independent field of study as most governments have become part of the world trade, as members of the World Trade Organization (WTO).”[2] Let us learn more on this interesting subject with the help of this article and using coffee as our prime example.
Commercial transactions between different countries and within too play a vital role in building great international relations as well as enhancing economic growth of a country as well. This shows that aspect of trade is neither contemporary nor an unusual development. “The existence of trade routes such as the Silk Route and the Amber Route crossing boundaries and continents, is ample evidence that international trade is not a recent phenomenon. The link between economic growth and trade was widely realized and exploited. Between the fifteenth and eighteenth centuries, the Venetians and Genoese traders with commercial acumen accumulated huge wealth by buying goods at low prices in one port and selling them at high prices at another. This period also saw the emergence of a new form of mercantile venture through corporations. The East India Company established under the Royal Charter in 1600 by Queen Elizabeth I, the Dutch East Indies Company and the Swedish East Indies Company are some such examples. Trade, mainly in spices, silk, opium, and sorts, between the East and the West thrived and helped in the economic growth of the European states. However, during the seventeenth and eighteenth centuries, mercantilism, which argued for strict regulation that encouraged exports and domestic manufacture of goods to cheaper imports, had gained ground.” [3]
Explanation – in – Depth: “Two main areas of international trade on the domestic side include trade remedy work and export controls/sanctions. Trade remedies are tools used by the government to take corrective action against imports that are causing material injury to a domestic industry because of unfair foreign pricing and/or foreign government subsidies. An example of a trade remedy includes antidumping duties set forth by the International Trade Commission (“ITC”) in response to dumping; this occurs when a foreign company sells a product in the U.S. that is below the price it sells for in its ‘home market’ and thus causes harm to the U.S. industry. Export control laws govern the exportation of sensitive equipment, software, and technology for reasons related to foreign policy objectives and national security. Three U.S. government agencies have the authority to issue export licenses, including: Department of State; Department of Commerce; and Department of Treasury. Violations of export control laws can carry both civil and criminal penalties. On the international treaty front, companies may need advice on the rules of the World Trade Organization (“WTO”), which is a formal international organization that regulates trade. Other relevant treaties include the North American Free Trade Agreement (“NAFTA”) and bilateral investment treaties.”[4]
Now, as trade grew internationally, certain concerns attached to it also grew. Mostly ethical concerns, human rights violations, protection of environment and animals. As such, GATT was created to cater to these problems and solve issues that concern countries globally. In addition to this, concept of subsidies was also introduced to help underdeveloped or developing nations. “The General Agreement on Tariffs and Trade (GATT) 1947, borne out of the cornucopia of horrors that the world witnessed in the 1930s and 1940s, enshrined the philosophy of free trade using the principles of non- discrimination (also known as Most Favored Nation obligation) and the elimination of quantitative restrictions. The gradual growth in international trade since the 1950s is largely due to the influence of GATT on the world stage, and it seems that this growth is set to continue. Developing countries like Brazil, China and India have emerged as key players in the provision of manufactured goods and services on the international scene and are seeing a trend for other developing nations to follow.”[5]
WASHINGTON: China has not adopted the rules of the World Trade Organization even after 20 years’ membership, the United States said Wednesday, adding that the world’s second-biggest economy had “retained and expanded” its statist approach to the detriment of businesses and workers globally.
“China also has a long history of violating, disregarding and circumventing WTO rules to achieve its industrial policy objectives,” said an annual report to Congress by the office of the US Trade Representative (USTR) Ambassador Katherine Tai, laying out the Biden administration’s assessment of China’s WTO membership.[6]
Economic Relations in Trade
Prior to the establishment of the World Trade Organization (WTO) 1995, international economic regulation of international trade was essentially structured within the General Agreement on Tariffs and Trade (GATT) which happened to come into existence by accident rather than by choice in 1947.[7] While tracing the history of the evolution of regulations of international trade and its institutional structures in the nineteenth century, we find that, although the beginning of the century witnessed free trade and less protectionism, yet by the end of the nineteenth century the then independent countries had moved away from free trade to protectionist policies.[8] “The international economic relations in the twentieth century witnessed unprecedented developments which led to the evolving of concepts, precepts and doctrines completely unique not only to achieve order in global economic and trading relations but also in the establishment of international economic institutions. After the First World War, the international economic relations were subjected to higher trade barriers of one or the other type with the result that some countries raised unprecedented impediments to world trade and commodity exchanges.” [9]
Relationship of Coffee and Trade
The transnational organization (ICO) abbreviated as International Coffee Organization comprises of countries that export and import coffee. In addition to this, the countries that export coffee amount to 95 percentage of the world exports and the countries that import coffee are over 65 percentage of worlds imports. The same was acknowledged by United Nations in the year 1962. Coffee is of exceptional monetary significance to developing countries. It is also of significant social importance in countries that consume them. Yearly export earnings from coffee alone typically exceeds the 10 billion dollars, in fact India itself exported coffee nearly $720 million worth in the year 2020-2021. It is anticipated that around thousands of individuals and families are exponentially dependent on coffee for their livelihoods.
Considering that coffee is a very distinctive-leaved perpetual plant, its cultivation, especially when you compare it with other numerous unconventional choices of fiscal activities, is quite advantageous to the ecosystem. Additionally, they produce more oxygen and maintain soil fixation. Coffee is the third most popular brews (first and second being water and tea). It is
cultivated under shade trees, which facilitates the conservation of a greater scale of biodiversity in the developing environment.
ICO oversees and governs the obligations mentioned under the International Coffee Agreement (ICA). The ICA is a universal commodity agreement between countries that produce coffee and the one that consume it. It was first signed in the year 1962, mainly to keep coffee costs high and stable in the market.
The latest agreement, ICA 2007 specifically discusses its role in providing a platform to share important market information and to improve market transparency. Among its other features, the new agreement in its first-ever added clause emphasizes on promoting the growth and distribution of innovations and best practices that can empower and allow coffee manufacturers to better manage financial aspects of the intrinsic volatility and risks accompanying competitive and growing markets. Further to this, ICO has also issued various studies on sustainable coffee and organic coffee production. In addition to which, the organization has also conducted varied
seminars and Round Tables intending to simplify issues. ICO undertakes to consider ecological
methods while subsidizing development projects in relation to coffee. The same is embarked on the collaboration and assistance of the Common Fund for Commodities (CFC). ICO has likewise established a Memorandum of Understanding (MoU) with the United Nations Environment Program to oversee studies on coffee and its competitiveness. When taking into consideration problems and concerns it is vital to note that the idea of commercial sustainability be also addressed. While a variety of environmentally optimal practices are dependent on a beneficial coffee economy.
[1] Library, University of California Berkeley School of Law. "International Trade Law". www.law.berkeley.edu. [2] International trade law - Wikipedia [3] International Trade Law, by India Carr and Peter Stone, 6th Edn. Retrieved from: International trade law by Carr, Indira Stone, Peter (z-lib.org) (2).pdf [4] International Trade Law | Georgetown Law [5] Ibid. [6] The Economic Times, Feb 07th, 2022. Retrieved from: wto: China has expanded statist economic policies over 20 years in WTO: US - The Economic Times (indiatimes.com) [7] Guide to the WTO and GATT, by Autar Krishen Koul, Economics, Law and Politics, SATYAM LAW INTERNATIONAL, Springer. Retrieved From: Guide to the WTO and GATT Economics, Law and Politics by Autar Krishen Koul (z-lib.org).pdf [8] A. K. Koul, The Legal Framework of UNCTAD in World Trade, 9–10 (A. W. Sijhoff 1977). 2 G. Curzon, Multilateral Commercial Diplomacy, 21 (London 1965). [9] Supra 6.
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