I am Professor Jaya goind I propose to give an introduction to International Trade law international trade law is the law regulating International Commerce it has two aspects public and private the public aspect of international trade law seeks to coordinate commercial policies of states and it is a part of public international law the private aspect of international trade law governs International commercial relations between the people belonging to different states most of it is covered by private international law this private international law is part of national legal system which is applicable to transactions having significant foreign connection nowadays there is an effort to harmonize National laws governing International transactions this is known as uh movement for unification of law in this class we focus only on public aspects the purpose of international trade law has been to promote free trade among nations free trade means that people should be free to buy and sell Goods cutting across National Frontiers in other words a person should be free to buy a product from anywhere in the world where he can get the best quality of product at the cheapest possible price similarly a seller should be able to sell his product at the highest possible price at any at any place in the globe before the emergence of modern State system people including Merchants could move freely subject to their own physical limitations there were no Customs tariffs in the modern sense of the term but once the organized State system came into existence following the Treaty of vestalia in 17th century customs duties were introduced customs duties originally were only fees for the services rendered to foreign Merchants but slowly it became a source of Revenue in the course of time with the Emer with the emergence of modern welfare state system Customs have become an effective instrument of National Economic Policy to protect domestic industries from external competition if a government wants to protect a domestic industry uh it would impose very high tariff on the incoming like products That's the Way domestic industry would be attractive enough to the local people Adam Smith in his Wealth of Nations made a strong case for free trade and this work molded the thinking of generations in support of free trade in international commercial relations there are three stages in the evolution of international trade regime first stag is limiting the tariffs in the second stage there was an effort to regulate non-tariff barriers and also to apply the principle of non-discrimination in the third stage in which we are today there is an effort to develop Global governance in the area of international property right intellectual property rights and related issues Anglo French Treaty of 1860 was the earliest bilateral treaty where under parties agreed to fix the upper limits of tariffs on some of the goods traded between them this was followed by a number of similar treaties especially during the interwar period the USA under the reciprocal trade trade agreements Act of 1934 concluded a large number of bilateral reciprocal trade agreements what happens here is a state agrees with another state to reduce tariffs on some of the exports from that state to its territory in return the other state also agrees to limit the Tariff on Goods coming from the first state this is a way to develop International commerce between the states the second stage was represented by the Gat 1947 and it provided for multilateral approach for tariff reduction because bilateral approach has its own limitation country a May export its goods to Country B But Country B may not have many Goods to uh export to Country a on the other hand country C may have uh Goods relevant to Count's a requirement under these circumstances strictly bilateral approach would be counterproductive hence multilateral approach was attempted most favored nation treatment and National treatment principles establish the principle of non-discrimination on firm footing under the most favored nation treatment a country shall not uh discriminate between goods exported from foreign countries under the principle of national treatment once a foreign Goods cross national territory that government concern shall not discriminate between foreign goods and nationally produced uced Goods with regard to the tariffs or other regulations Gat also sought to control indiscriminate application of non-tariff barriers such as quantitative restrictions the World Trade Organization represents the third stage where under the issues closely connected with International Trade such as intellectual property rights were sought to be harmonized by reference to certain internationally agreed standards the serious efforts to conclude ttip that is transatlantic trade and investment partnership TPA transatlantic uh partnership for transpacific partnership agreement rce Regional comprehensive economic partnership ETC represent the efforts to extend the global governance to areas such as investment labor environment etc etc but the slow progress of these agreements show that states have states are finding it extremely difficult to agree on uh the issues relating to International Trade such as labor standards environment so on and so forth now let me give you a historical background to the general agreement on tariffs and trade uh which subsequently transformed itself into World Trade Organization General agreement on tariffs and trade that is the Gat 194 7 was the First Institutional manifestation of multilateralism in trade it was influenced by the developments in the 1930s when the world economy was hit by the Great Depression major States followed beggar my neighbor policies and this led to the shrinkage of international trade nearly by 2/3 and it deepened the economic crisis what happens is simply this every state wants to uh limit the imports from other states and wants to promote exports from each state to other states when every state follows this kind of policy uh it would lead to the shinkage of trade because one State's export is another State's import if States restrict Imports exports of other states would be affected and uh overall impact would be a reduction in international commercial transactions by the end of second world war there was General consensus that free trade among the Free People is the shest means of establishing the world peace as Cardell Hull a rep the representat of United States in the international commercial conferences put it enduring peace and Welfare of nations are indissolubly connected with fairness equality and maximum degree of freedom in international trade and uh restrictions on International Trade would lead to frictions between the states hence States should follow as far as possible free trade policies international monetary fund and International Bank for reconstruction and development were established in 1945 and the plan for the establishment of an International Trade Organization was initiated by economic and social Council of the United Nations in 1946 by way of calling a un conference on trade and employment the USA submitted a detailed proposal on the proposed International Trade Organization and a preparatory committee was established to prepare the draft proposal taking into account the US proposal the Preparatory commit held three meetings in London in October 1946 in New York in the early part of 1947 in the Geneva by the end of 1947 the final United Nations conference on trade and employment was held at Havana during 19 during November 1946 7 and March 1948 and It produced the UN convention on trade and employment which was popularly known as the haana chter side by side with the negotiations on the I on the insistence of the USA there were negotiations on the reduction of tariffs mainly between the USA and European countries in fact the USA was Keen to bring down the Tariff uh in its partner States because us was interested in promoting its trade but European states were not that enthusiastic because uh but since they were interested in uh uh in getting the United States assistance they agreed to the United States pressure to have international tariff negotiations in the Geneva meeting 45,000 tariff concessions worth 10 billion dollar were negotiated between 23 countries to provide a legal framework for these concessions the Gat was negotiated and accepted uh through PPA that is protocol on provisional application the president of United States by using FastTrack Authority conferred under the reciprocal trade agreements Act of 1934 accepted the Gat he did so in view of the uncertainities regarding the proposed it and also uh the expiry of fast trck Authority by the end of 1947 the it negotiations were going on not in accordance with the United States plan there were number of Provisions which were sought to be introduced in the it which were against the US uh us liking hence there was a possibility that I won't come into into existence in the near future hence the US president us was interested in having having the Gat at least which would provide a kind of legal framework for whatever concessions negotiated so far or negoti concessions which would be negotiated in future as was expected there was strong opposition to the haana chter in the United States Congress the most of the congression members felt that this Havana chter was making demands on the US Without Really without in any way conceding any of the genuine requirements of the US what the president did was he quietly withdrew The Proposal from the Congress by 1948 the Gat was operationalized through the protocol on provisional application protocol on provisional explication as the name indicates is a treaty between the participants so as to provisionally apply the Gat provisionally in the sense Gat would continue till the uh till the International Trade Organization proposed to be established under the haana chart would materialize according to this uh of course this protocol on provisional application contained three articles under article one part one and part three of the Gat shall be accepted by all Contracting parties and part two of the Gat shall be accepted to the fullest extent not in consistent with the existing legislation part one of the Gat consisted of most favored nation clause and schedule of concessions and part three dealt with various procedural issues part three also contained a provision which facilitated Contracting parties to meet with each other from time to time to uh negotiate about the Tariff reduction negotiations for Mutual reductions of tariffs was considered as the principal function of the Gat and the Gat succeeded in discharging this function and by 1980s tariffs were no longer considered as the significant barriers from Kennedy round onwards that is Kennedy round took place sometime in 1962 the G started focusing upon non-tariff barriers such as quantitative restriction anti-dumping Duty so on and so forth in fact in the Kennedy in the Kennedy round there was elaboration of uh an anti dumping in an international agreement on anti-dumping in Tokyo round quite a few agreements were concluded regarding various non-tariff barriers but all these uh uh Tokyo round agreements and earlier Kennedy round agreements they were not they were binding only those states which have accepted them now let me take you through various economic theories which seeks to justify international trade and explain international trade read it is said that social theories have the unfortunate habit of traveling in the PA of opposite free trade and protectionism have always been there in international commercial relations and they have manifested under different GS at different points of time at at a given point of time one Theory may appear dominant while the other theory is waiting in the wings to take the central stage in due course free trade means people should be free to trade with each other cutting across National Frontiers on the other hand protectionism means a government can intervene in the in economic in the economic relations uh between the states with a view to promoting National interest with a view to strengthening the nent state system in the 17th century economic theory of mercantilism was propounded according to this theory of mercantilism acquisition of power was considered as the suum bonum of a state in the absence of modern banking system acquisition of precious metals mainly gold and silver was treated as contributing to the economic power mercantilism taught how to acquire precious metals mercantilism was the economic economic counterpart of power politics power politics in you know advis the states to increase their power in all possible means economically how to increase the power that was explained by mercantilism merism argued for aggressive export promotion and reducing Imports as much as possible with a view to accumulating precious metals the limitation of uh the this strategy is very obvious if every state follows this policy it would be a zero some game but it was considered as legitimate in the context of consolidation of system protectionism appeared under the Garb of mercantilism it may be noted here that social theories normally are propounded with a View to consolidating a particular movement which is taking place in the society mercantilism sought to strengthen the ex consol sought to strengthen the existing state system with the dawn of Industrial Revolution in the United Kingdom a more enlightened Theory emphasizing the need for expansion of trade was required Adam Smith fulfilled this need with his book Wealth of Nations he believed that division of labor and consequent emphasis on specialization would promote General Prosperity well what Adam Smith advocated was acquisition of precious metals by the state won't won't be the won't repr represent the strength of a state the general welfare of the people is required for the security of the state and he thought that uh General Welfare would be promoted by uh promoting International Trade between the people belonging to various jurisdictions he treated international trade as the extension of domestic transactions as Adam Smith put it it is the maxim of maxim of every prudent family never to attempt to make a home what it will cost more to make than to buy you know he gives the example of Taylor Baker uh Hunter so on and so forth the tailor does not attempt to make his shoes but buys them from the shoe maker similarly a shoe maker will buy his clothes from the taor and Adam Smith concludes that what is prudent in the conduct of every private family can scarce be a Folly in that of great Kingdom if foreign country can supply us with a commodity cheaper than we ourselves can make it better buy it buy it of of them with some part of our own produce of our own industry employed in a way in which we have some advantage in brief Adam Smith believed that states like individuals have certain absolute Advantage advantage over other states hence his theory is he has come to be known as theory of absolute advantage however with the Mastery of Technology it is possible for a state to have absolute advantage over another state in everything David Ricardo came up with his theory of comparative advantages to justify International Trade even in such context he gives the example of England and Portugal for this purpose compared to England Portugal can produce its wine and cloth much more efficient than England still it is it is possible for England and Portugal to trade with each other to the mutual Advantage what the state what each state should do is to focus upon its relative advantage in producing a particular good over other goods from domestic point of view Suppose there is a lawyer competent in his profession and also very good in typing in fact better than his own typist as far as typing is concerned under these ccum circumstances should he engage the typist at all answer is yes because if the lawyer devotes his time used for typing to his own work his overall earning will be much more and typist also would be benefited thereby the same logic applies to the production of goods as well David Ricardo developed his doctrine of comparative advantages by the examples such as these recorders ideas have been developed further by many Economist in fact Paul samelson thinks that one economic idea which has stood the test of time is David Ricardo's theory of comparative advantage Factor endowment theory developed by hexer and oilin is a very good example in this regard ex and O oin considered capital and labor as the main factors of production and international trade is determined by the factory endowments and intensities in other words what they say is that a country uh rich in capital must focus upon the production of capital intensive Goods other countries which have Surplus labor they should focus upon labor intensive goods and they should trade between each other that would be in the interest of all all the states as Smith theory was gaining acceptance it was challenged by a German Economist fredi list Germany was comparatively a late Comer to the industrialization list thought that strict application of free trade would perpetuate the backwardness of Germany for example if uh under a free trade if goods are allowed freely to be imported let us say from England uh Germany won't be able to develop its own Industries Germany has to continue to export its own raw materials to England to promote industrialization in England what should be done to promote industrialization in Germany list ocated the theory of infant industry protection he argued for the protection of nent Industries in Germany through high tars it is something like uh uh protecting an infant in the initial stage an infant requires protection uh so that he can grow up comfortably around the same time Alexander Hamilton one of the authors of Federalist Papers argued for the encouragement of manufacturing in the USA by erecting High tariff walls in fact the USA and other developed countries followed the protectionist policies only until the time they industrialized their economies that uh kind of uh situation prevails even today practically all developed countries which we see around had followed protectionist policies in the initial stages in the formative stages once they acquire sufficient economic strength they start talking about uh free trade now let us uh let us consider the developing countries and free trade what is the impact of free trade on economic development PR practically all developing countries had served as suppliers of raw materials to their colonial Masters the strict application of free trade Theory implies that they should continue in the same direction in the words of gar mdal they will continue to serve as huers of wood and drawers of water for their EST Colonial M Masters as can be under as can be inferred from this expression Hing the wood and drawing the water are the anual jobs requiring lot of physical strength similarly production of agricultural material require a lot of hard labor but this agriculture would provide raw materials to the developed countries so that uh they can move ahead with their industrialization if comparative advantage is taken as a prescription rather than description it would lead to the perpetuation of status quo if the doctrine is to include potential of a given country then the issue would be how to determine the economic potential of a country well if a comparative advantage is taken as representing the present situation it is easy to apply that but that would mean perpetuation of the present situation on the other hand understanding the potential of a given country means what a country can do but but it is difficult to find out what a country can do and it is uh uh after all if we can't understand if we can't assess the potential of an individual properly it is next to impossible to uh to understand the potential of a country but this kind of protection to develop the potential may give may may lead to undesirable results as well professor Milton Freedman thought that infant industry protection would lead to the creation of vested interest which would resist the removal of the protection in his he famously said in one place infants will refuse to grow and infants may turn into brats uh if uh protection is continued indefinitely but how long protection is to be continued when the protection is to be withdrawn it is very difficult to uh conceive these things theoretically and also to it would be next to impossible to apply it in practice now Rael prish an Argentinian Economist developed a theory of import substitution as part of Center periphery theory developed by many Latin American uh philosophers he s he argued for import substitution as corrective to export promotion he he along with Hans singer demonstrated that the terms of trade between primary Commodities and manufactured products have been going against primary products year after year more and more primary products are to be sold to acquire the same amount of manufactured products Professor uh rul prish along with an English Economist singga studied uh the terms of trade between developing countries and developed countries over a long period of time he found that uh prices of primary Commodities decline in relation to those of uh industrial Commodities over a period of time hence he argued for the industrialization of economies economies of developing countries as a solution to this problem but he but he wanted this to take place within the Gat framework for this purpose he urged the developed countries to give preferential treatment to developing countries both in respect of exports and imports it may be noted that from 1950 onwards there is a uh there are two kinds of responses to the demands for industrialization many socialist countries thought that it is uh it is not possible for them to pursue the economic policies they want within International institutional framework so they they went out of the international economic system no socialist country except a few countries like uh probably Yugoslavia and Romania became part of international Economic Institutions on the other hand a large number of developing countries became members of international economic institution they wanted to advance their interests within the framework of international institutions in respect of exports from developed countries uh Rael prish urged them Ur urged the developed countries not to insist upon reciprocity in the course of tariff negotiation further to encourage imports from developing countries developed countries are requested to give preferential treatment to the goods from developing countries and thanks to his efforts through the Anar the generalized scheme of preferences was adopted uh by the developed countries and also part four of the Gat was added in other words both in respect of exports and imports developed countries where sought to be given some kind of preferential treatment as far as exports were concerned thir countries have given some kind of preferential treatment to some of their goods under the generalized scheme of preferences and as far as imports from the developing countries were concerned in the course of tariff negotiations uh it it was provided in part four that developed countries will not insist upon reciprocity from them in other words developing countries can uh protect their domestic Industries to some extent without exposing to them to International competition arising out of imports in brief prish advocated strategies combining free trade with protectionism protective programs such as commodity agreements and preferences were advocated as corrective to unequal position of the developing countries planned Economic Development pursued by India corresponds to the ideas of prish to a great extent now let me take up take you through another trade policy which is very popular which is very much prevalent among the states that is strategic trade policy Southeast Asian countries are the most successful economies of 20th century they are unlike liberal economies wherein the state and Market operate at arms length with each other they mutually support each other both domestically and internationally they are different from communist economies in the sense they are not only democracies but they actively engage in international trade strategic trade policy leads to manage trade rather than free trade According to some Economist we have at present man managed trade rather than free trade if there is genuine free trade there's no need for prolonged negotiations wherein the national interests have to be balanced against each other and uh a free trade Constitution requires only a few Provisions we have article 301 of Indian Constitution which says trade Commerce and intercourse shall be free throughout the territory of India following the same language there can be a general statement trade Commerce and intercourse shall be free throughout the world and uh there may be a few Provisions to explain them and provide exceptions to them that's all what we required but you we see international trade agreements uh in the agreement running hundreds of pages and international trade negotiations taking place over very prolonged period of time all these things show that what we have really is not a free trade wherein uh everything would be decided by the market States would bargain with each other very hard in a very hard way so that uh their national interests are protected in the course of uh international trade negotiations now there is another concept which is gaining uh importance nowadays that is made in the world concept the Gat was based on the idea that goods are produced in one country and sold in another country thanks to technological developments and emergence of multinational corporation this is no longer true for an item like automobile the parts may be produced in in different places and they may be assembled in one place similarly an item May undergo value addition in different places a standard example given in this regard is iPod produced by Apple company it was invented in the USA hence the basic design was with the USA but its components were produced in different places and they are finally assembled in China probably by a Chinese subsidiary of Apple company itself the product May bear the label made in China but the reality is that China might have got only a maximum of 10% of the price and nearly 70% of the price would be would go to the USA hence uh you know the one should not be just led by uh statistics of international trade one should go deeper into the issue in brief overall impact of a trade cannot be assessed on the basis of madein label asset such this development has provided opportunities for a number of countries to become part of the global value chain in fact trade facilitation agreement pending before the WTO is interpreted as facilitating the global value chain proliferation of regional trade agreements are also said to promote this development often people uh are still conditioned by the idea of made in label for example in the the recent times uh there was a big furor in the United States Congress regarding the dresses worn by Olympic players you know those dresses were made in China then in Congress Congress people certain Congress people accuse the government that why can't we make the dresses for our own our own athletes in United States well then it was pointed out that that those dresses were only stitched in China in fact cotton for dress was procured from some country it was turned into cloth in another country the design for the dress was provided in the US itself as we know design actually fetches most part of the uh most part design in fact fetches most part of the earnings out of a Goods so in fact major portion of uh the product was done in the USA in the sense that USA had the uh had the design finally some kind of conclusions free trade and protectionism are said to constitute two ends of the Spectrum in reality States may be placed somewhere in between the extreme points of the spectrum there's no country which follows either of these policy in the pure sense of the term probably strategic trade policy is the AP description of the uh trade policy is the after description of what is happening uh at present original Gat 1947 was very much Market oriented on the initiative of developing countries it was amended in 1955 to take care of their concerns Raul prish sought to tackle the problem of development within the framework of United Nations Gat United Nations and Gat system the generalist scheme of preferences and part four of the Gat were essentially his contributions Doha development round was launched in 2001 under the ages of World Trade Organization to address the concerns of developing countries what the developing countries want to do is they would they would like to reorient International economic relations to facilitate economic development of developing countries even after a decade of negotiations nothing significant came out of it people are not sure whether the Doha development round is Ali or not this only highlights the fact that International Community is not clear about the role of free trade in facilitating Economic Development I thank you for patient listening for