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Foreign Trade - Coggle Diagram
Foreign Trade
Types of trade agreements
FTA (Free Trade Agreements)
Full tariff elimination or significant reduction between signatories
Examples: USMCA, EU-Mexico, Mexico-Japan, etc
PTA (Preferential Trade Agreement)
Unlike FTAs, PTAs do not eliminate all tariffs but reduce them on certain goods
Examples: India-ASEAN , India-Mercosur.
CECA (Comprehensive Economic Cooperation Agreement)
Includes trade, investment, and cooperation in multiple areas
Examples: India-Singapore CECA, India-Malaysia CECA, India-Thailand CECA, etc.
CEPA (Comprehensive Economic Partnership Agreement)
Broader scope than CECA, often includes labor mobility, IP, and regulations
Examples: India-Japan CEPA, India-UAE CEPA
BIT (Bilateral Investment Treaties
Specific agreements focused on protecting private investment and reducing barriers to foreign direct investment
Examples: Germany-Mexico BIT, Austria-Mexico BIT and Argentina-Mexico
Legal framework governing international contracts.
CISG: A treaty providing harmonized, substantive law for international sales of goods, adopted by over 90 countries.
Private International Law/Conflict of Laws: Determines which national legal system applies when the contract is silent, often using rules like "closest connection"
Freedom of Contract: Parties generally have the freedom to select the governing law and the forum for dispute resolution.
New York Convention: A critical treaty facilitating the international recognition and enforcement of arbitration agreements and awards.
Lex Mercatoria: International trade customs and usages, such as Incoterms, which are often incorporated into contracts
Normative hierarchy of foreign trade
Constitutional Level: Constitutions occupy the highest rank, defining the sovereign state's power to negotiate and ratify treaties.
International Law & Treaties: Generally, international trade treaties ratified by legislatures hold superior authority over national laws. In many systems, these treaties are supreme over domestic statutes, particularly under international law standards, for example, GATT/WTO rules.
National Legislation: Federal laws governing imports, exports, and customs duties fall under international agreements but override local or sub-national rules.
Administrative Regulations: Technical regulations, decrees, and administrative acts adopted by executive bodies (ministries of trade, customs authorities) are at the bottom of the hierarchy, and must conform to both international treaties and national law
Defnition fo "Foreign Trade"
Foreign trade can be defined as an exchange of services, goods, or capital across international territories or borders on the basis of the needs of demands of services