208 - Geopolitics & World Economic Systems Unit3B

208-Geopolitics & World
Economic Systems
UNIT3:
3. International Trade Laws: International
Contracts of Sale of Goods Transactions,
International Trade Insurance, Patents,
Trademarks, Copyright and Neighboring
Rights. Intellectual property Rights, Dispute
settlement Procedures under GATT & WTO,
Payment systems in International Trade,
International Labour Organization and
International Labour Laws.

The body of rules and norms that regulates activities carried
on outside the legal boundaries of nations. It regulates
three international relationships:
1) Those between states and states.
2) Those between states and persons.
3) Those between persons and persons.
Public international law; private international law;
international economic law，etc. ？
Introduction

Is International Law Really Law?
International law is law,
because nations and
individuals regard it as law. It is
different from comity. Comity:
The practice, or courtesy,
between nations of treating
each other with goodwill and
civility. Comity is not law
because countries do not
regard it as something they
are required to respect.

SOURCES OF INTERNATIONAL LAW
1. Definition: Those things which international tribunals rely
upon in determining the content of international law.
2. Authorized Sources: Article 38(1) of the Statute of the
International Court of Justice (ICJ) lists the sources which
that court is permitted to use.
a) ICJ looks to:
1) International conventions;
2) International custom;
3) General principles of law.
b) In interpreting these, the ICJ may also look to:
1) Judicial decisions.
2) Teachings of publicists.

Treaties and Conventions
a. Definitions:
1) Treaties are agreements between one or more nations.
2) Conventions are agreements sponsored by
international organizations.
b. Reasons for binding effect:
1) Shared sense of commitment.
2) Because one country fears that if it does not respect its
promises, other countries will not respect their promises.
c. Rules governing treaties:
1) Traditionally customary.
2) Now codified in the Vienna Convention on the Law of
Treaties (in force since 1980).

International Contracts of Sale of Goods Transactions
• History
– April 11, 1980
– Formally ratified by 11 nations in 1986 (including U.S.), became
effective January 1, 1988
– Currently, 89 nation states are signatories to the CISG
• Purpose
• Does Not Apply to:
– Sales in which labor or other services constitute a “preponderant part”
of the transaction
• Economic Value Test; then
• Essential Test
– Manufacturing contracts where the buyer supplies a “substantial
portion” of the materials
– Consumer Contracts or Investment Securities, etc.

Contracting States represent more than 80% of all
world’s trade
Notable Omissions:
England, South Africa,
India, Portugal, Ireland,
Pacific Islands, portions
of Central America

Applicability
• Supremacy Clause of the United States
• For international contracts between Contracting States (including U.S.),
the CISG ALWAYS applies unless expressly excluded or varied:
– “This Agreement shall be governed by laws of the State of Idaho.”
– “This Agreement shall be governed by the laws of the State of Idaho
and Article 2 of the Uniform Commercial Code as enacted in the
State of Idaho. Pursuant to Article 6 of the CISG, the parties
expressly exclude application of the CISG in its entirety to this
Agreement.”

Applicability: Where is the business?
• Does the counterparty reside in a Contracting State?
– 2 Hypothetical Scenarios:
• Multi-national corporations who may be administratively headquartered
in one country but is shipping, receiving or manufacturing product in
another country
• Assignment of one party from a Contracting State to a Non-Contracting
State after some but not all performance in complete
– Courts have generally read the “before or at the conclusion of the contract”
language of Article 1(2) of the CISG broadly and applied the CISG where in
question

Applicability (cont.)
• GOLDEN QUESTION – Should you want the CISG to
apply to your international transactions relating to
the purchase and sale of goods?
– The answer - “maybe”
– The CISG is generally considered to be more seller friendly than the
UCC

Some of the Differences
For Better or Worse …
1. Battle of the Forms
2. Non-Conforming Goods
3. Unilateral Price Reduction
4. Oral Contracts
5. Risk of Loss

#1: Battle of the Forms
• “BATTLE OF THE FORMS”
–Disputes reach a different result under the UCC
(typically pro-buyer) then under the CISG (typically
pro-seller).

#1: Battle of the Forms
• Standard Hypothetical:
– Step 1: Buyer makes a price inquiry
– Step 2: Seller provides price quote (and perhaps some additional terms but generally this is considered to
be an invitation to negotiate terms)
– Step 3 (the “Offer”): Buyer sends purchase order (“first shot”) with Buyer’s standard T&C (generally
contains language limiting acceptance to terms of the PO and objects to any differing or additional terms)
– Step 4 (the “Acceptance”): Seller acknowledges the order and provides different T&C. May:
• Contain T&C materially different from Buyer’s T&C and/or
• Acceptance is conditioned on Buyer’s assent to Seller’s T&C
– At This Point: No contract exists, either party can walk away
– Step 5: Manufacture and/or Ship (conduct manifesting the existence of contract)
– Step 6: Delivery & Acceptance (conduct manifesting the existence of contract)

#1: Battle of the Forms (cont.)
• Under the UCC: 2-207
– 2-207(1) Written Acknowledgement (even with additional or different terms) is an
Acceptance unless acceptance is expressly made conditional on assent to additional
or different terms.
– 2-207(2) Between merchants “new” terms become part of the contract unless:
• Offer expressly limits acceptance to the “original” terms
• “New” terms materially alter “original” terms
• Previous rejection or rejection within a reasonable time
– 2-207(3) Conduct creates contract. Agreeable terms between “original” and “new”
terms are incorporated, with gap-fillers (also known as default rules) coming from
UCC Article 2.

• UNDER UCC: (PRO-BUYER) “Master of the Offer”
– Either:
• “Knockout Rule” applies and knocks out the additional and or different terms; and
• “Material Alteration Rule” Seller’s material terms altered the contract and are not
included.
– Or:
• No written contract was formed. BUT, a contract was formed by conduct and gap-
fillers come from the UCC
– Result:
• In either case, Buyer’s terms (or Buyer friendly terms) are the underlying terms
used. BUYER WINS!

• UNDER CISG: (PRO-SELLER)
– Article 19: A reply with additions, limitation, or other modifications
is considered to be a rejection and counter-offer.
• Known as the “Mirror Image Rule”
– In the hypothetical, the order acknowledgement becomes a
counteroffer which Buyer accepts by taking the goods.
• Contract is formed on the Seller’s T&C (“Last Shot Rule”). SELLER WINS!

#2: Non-Conforming Goods
• UCC:
– “Perfect Tender”: Buyer has the legal right to reject goods that fail
in any aspect to conform to the contract.
• CISG:
– “Fundamental Breach”: Buyer may declare the contract voided only
if the failure constitutes a fundamental breach.
• Logical Conclusion

#2: Non-Conforming Goods (cont.)
• Additional Side Notes:
– Both the UCC and CISG use a “reasonable time” standard for a
buyer providing notice of the non-conformity, the CISG has been
interpreted to require a quicker response time than the UCC.
– CISG mandates more specificity in the notice of nonconformity.
• Pro-Seller Result.

#3: Unilateral Price Reduction
• Unilateral Price Reduction
– Perhaps to offset the Non-Conforming Goods rules, the CISG grants
Buyers a unilateral price reduction self-help remedy
– Under 2-601, 2-711, and 2-714 of the UCC, a Buyer can reject
non-conforming goods, cancel the contract, or seek damages. The
UCC would require a lawsuit or negotiated settlement to reach any
of these results

#3: Unilateral Price Reduction (cont.)
• Under Article 5 of the CISG, if the goods “do not conform
with the contract. . . . the Buyer may reduce the price in the
same proportion as the value that the goods actually
delivered had at the time of the delivery bears to the value
that the conforming goods would have had at that time.”
• Pro-Buyer Result.

#4: Oral Contract
• Under UCC 2-201:
– Any contract for the sale of goods for the price of $500 must be in writing
(Statute of Frauds)
– Amendments or modifications must also be in writing
• Article 11 of CISG:
– A contract of sale need not be concluded in or evidenced by a writing
• Many nations (but not the US, nor China) have made a reservation requiring
a writing

#5: Risk of Loss (Default Rule)
• UCC 2-509(1):
• If contract does not require delivery to particular destination, risk of loss transfers to
Buyer when goods are delivered to carrier
• If particular destination is required, Buyer takes the risk when goods are tendered for
delivery
– CISG Article 31:
• If providing carriage (use of third-party carrier), risk of loss transfers to Buyer when
goods are delivered by Seller to the carrier
• If no carriage, risk of loss transfers to Buyer when the Buyer takes or should have
taken over the goods
– Note: Dependent on use of a carrier, rather than inclusion of delivery location

Tip Sheet/Conclusion
• TIP 1: Know what law applies and what law you want to apply
• TIP 2: Avoid utilizing form purchase orders and acknowledgements to
establish your contracts. Negotiated agreements only!
• TIP 3: Utilize an integration clause and avoid oral amendments
• TIP 4: Review your existing agreements in order to better leverage your
business position

What is a Patent?
A patent is an exclusive right granted for an
invention – a product or process that provides a
new way of doing something, or that offers a
new technical solution to a problem. A patent
provides patent owners with protection for their
inventions. Protection is granted for a limited
period, generally 20 years.
PATENTS

Why are patents necessary?
Patents provide incentives to individuals by
recognizing their creativity and offering the
possibility of material reward for their marketable
inventions. These incentives encourage
innovation, which in turn enhances the quality of
human life.

What kind of protection do patents offer?
Patent protection means an invention cannot be
commercially made, used, distributed or sold
without the patent owner’s consent.
Patent rights are usually enforced in courts that, in
most systems, hold the authority to stop patent
infringement.
Conversely, a court can also declare a patent
invalid upon a successful challenge by a third
party.

What rights do patent owners have?
A patent owner has the right to decide who may – or may
not – use the patented invention for the period during
which it is protected. Patent owners may give permission
to, or license, other parties to use their inventions on
mutually agreed terms. Owners may also sell their invention
rights to someone else, who then becomes the new owner
of the patent. Once a patent expires, protection ends and
the invention enters the public domain. This is also known
as becoming off patent, meaning the owner no longer
holds exclusive rights to the invention, and it becomes
available for commercial exploitation by others.

What role do patents play in everyday life?
Patented inventions have pervaded every aspect of human life,
from electric lighting (patents held by Edison and Swan) and
sewing machines (patents held by Howe and Singer), to
magnetic resonance imaging (MRI) (patents held by
Damadian) and the iPhone (patents held by Apple).
In return for patent protection, all patent owners are obliged to
publicly disclose information on their inventions in order to
enrich the total body of technical knowledge in the world. This
ever increasing body of public knowledge promotes further
creativity and innovation.
Patents therefore provide not only protection for their owners but
also valuable information and inspiration for future generations
of researchers and inventors.

How is a patent granted?
The first step in securing a patent is to file a patent
application. The application generally contains the title
of the invention, as well as an indication of its technical
field. It must include the background and a description of
the invention, in clear language and enough detail that
an individual with an average understanding of the field
could use or reproduce the invention.
Such descriptions are usually accompanied by visual
materials – drawings, plans or diagrams – that describe
the invention in greater detail. The application also
contains various “claims”, that is, information to help
determine the extent of protection to be granted by the
patent

What kinds of inventions can be protected?
An invention must, in general, fulfill the following conditions to
be protected by a patent. It must be of practical use; it
must show an element of “novelty”, meaning some new
characteristic that is not part of the body of existing
knowledge in its particular technical field. That body of
existing knowledge is called “prior art”. The invention must
show an “inventive step” that could not be deduced by a
person with average knowledge of the technical field. Its
subject matter must be accepted as “patentable” under
law. In many countries, scientific theories, mathematical
methods, plant or animal varieties, discoveries of natural
substances, commercial methods or methods of medical
treatment (as opposed to medical products) are not
generally patentable.

Who grants patents?
Patents are granted by national patent offices or by regional
offices that carry out examination work for a group of
countries – for example, the European Patent Office (EPO)
and the African Intellectual Property Organization (OAPI).
Under such regional systems, an applicant requests protection
for an invention in one or more countries, and each country
decides whether to offer patent protection within its borders.
The WIPO-administered Patent Cooperation Treaty (PCT)
provides for the filing of a single international patent
application that has the same effect as national applications
filed in the designated countries. An applicant seeking
protection may file one application and request protection in
as many signatory states as needed.

What is a trademark?
A trademark is a distinctive sign that identifies certain goods
or services produced or provided by an individual or a
company. Its origin dates back to ancient times when
craftsmen reproduced their signatures, or “marks”, on their
artistic works or products of a functional or practical nature.
Over the years, these marks have evolved into today’s system
of trademark registration and protection. The system helps
consumers to identify and purchase a product or service
based on whether its specific characteristics and quality –
as indicated by its unique trademark – meet their needs.
TRADEMARKS

What do trademarks do?
Trademark protection ensures that he owners of
marks have the exclusive right to use them to
identify goods or services, or to authorize others
to use them in return for payment.
The period of protection varies, but a trademark
can be renewed indefinitely upon payment of
the corresponding fees.
Trademark protection is legally enforced by courts
that, in most systems, have the authority to stop
trademark infringement.

What do trademarks do?
In a larger sense, trademarks promote initiative and
enterprise worldwide by rewarding their owners
with recognition and financial profit.
Trademark protection also hinders the efforts of
unfair competitors, such as counterfeiters, to use
similar distinctive signs to market inferior or
different products or services.
The system enables people with skill and enterprise
to produce and market goods and services in the
fairest possible conditions, thereby facilitating
international trade.

What kinds of trademarks can be registered?
Trademarks may be one or a combination of
words, letters and numerals. They may consist of
drawings, symbols or three dimensional signs,
such as the shape and packaging of goods.
In some countries, non-traditional marks may be
registered for distinguishing features such as
holograms, motion, color and non-visible signs
(sound, smell or taste).
In addition to identifying the commercial source
of goods or services, several other trademark
categories also exist.

What kinds of trademarks can be registered?
Collective marks are owned by an association whose
members use them to indicate products with a certain
level of quality and who agree to adhere to specific
requirements set by the association. Such associations
might represent, for example, accountants, engineers or
architects.
Certification marks are given for compliance with defined
standards but are not confined to any membership. They
may be granted to anyone who can certify that their
products meet certain established standards. Some
examples of recognized certification are the
internationally accepted “ISO 9000” quality standards
and Ecolabels for products with reduced environmental
impact

The Sectors of Intellectual Property Law
Copyright Patent
Trademark &
Unfair Competition
Right of
Publicity
Trade
Secrets

Basic Copyright Law
• Long-term, medium protection for “original
forms of expression”
• “Original” = independently created +
minimal degree of creativity (Feist)
• “Original” does not require novelty, aesthetic
merit, or truth

Copyright laws grant authors, artists and other creators
protection for their literary and artistic creations, generally
referred to as “works”. A closely associated field is “related
rights” or rights related to copyright that encompass rights
similar or identical to those of copyright, although
sometimes more limited and of shorter duration.
The beneficiaries of related rights are:
 performers (such as actors and musicians) in their
performances;
 producers of phonograms (for example, compact discs) in
their sound recordings; and
 broadcasting organizations in their radio and television
programs.
COPYRIGHT

Works covered by copyright include, but are not limited to:
novels, poems, plays, reference works, newspapers,
advertisements, computer programs, databases, films,
musical compositions, choreography, paintings, drawings,
photographs, sculpture, architecture, maps and technical
drawings.
COPYRIGHT

Idea/Expression Distinction
• Not copyrightable
– Ideas
– Facts
– "truths of a science"
– "methods of an art"
– "system of
bookkeeping"
– generic plots
– generic characters
– research
• Copyrightable
– Expression
– detailed plots
– distinctive
characters
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Major Agreements
(Potentially) Global Agreements:
 Berne Convention (1886-1971)
 Universal Copyright Convention (1952)
 WIPO Copyright Treaty (1996)
 TRIPS (1994)
 Rome Convention (1961)
Regional Agreements
 EC Directives
 NAFTA (1992)
Bilateral Agreements
 E.g., US/Germany – Atlas Films

Sore Spots in International Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Public Performances
• Neighboring Rights
• Government documents
• Fair Use
• Moral Rights

• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Fair Use
Territoriality Principle
Treatment of
“works for hire”;
Priority rules

• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Fair Use
Feist (US)
Tele-Direct (Canada)
Schricker (Germany)

Sore Spots in International
Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
Territoriality Principle
--Atlas Film (Germany)
UCC, art. IV
Berne, art. 7(8)
EC Term Directive
--LOA + 70
Sonny Bono
--LOA + 70; Eldred

Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
Utility Models;
Conceptual
Separability;
Overlap with
creativity
requirements

Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
Utility Models;
Conceptual Separability;
Overlap with creativity
requirements

Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
CONTU (US)
EC Software Directive
TRIPS Art. 10

Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
Berne Arts. 2, 11bis
Rome Art. 12;
1992 EC Directive;
DPRA & DMCA (US)
CARP (US)

Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
European blank-
tape systems;
Sound recordings

Copyright Law
• Authorship
• Creativity
• Duration
• Useful Objects
• Software
Germany, Japan,
& US withhold ©
Great Britain: Crown
and Parliamentary

• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Fair Use
• Moral Rights
Is TRIPs
compatible
with US fair use?
Should TRIPs
mandate fair use?

Fair Use?
TRIPS, Article 13
Members shall confine limitations or exceptions to
exclusive rights to certain special cases which do not
conflict with a normal exploitation of the work and do not
unreasonably prejudice the legitimate interests of the
right holder.

• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Fair Use
• Moral Rights
Is TRIPs compatible
With US fair use?
Should TRIPs
Mandate fair use?

• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Fair Use
• Moral Rights
Issues include:
Duration;
Alienability;
Preconditions to
integrity right;
Responsibility
of heirs/devisees
Berne 6bis
TRIPS exclusion

• Authorship
• Creativity
• Duration
• Useful Objects
• Software
• Fair Use
• Moral Rights
drive toward
harmonization
by selecting most
author-protective
option on each
issue

What rights do copyright and related rights provide?
The creators of works protected by copyright, and their heirs
and successors (generally referred to as “right holders”),
have certain basic rights under copyright law. They hold
the exclusive right to use or authorize others to use the
work on agreed terms. The right holder(s) of a work can
authorize or prohibit:
 its reproduction in all forms, including print form and sound
recording;
 its public performance and communication to the public;
 its broadcasting;
 its translation into other languages; and
 its adaptation, such as from a novel to a screenplay for a
film.

Similar rights of, among others, fixation (recording) and
reproduction are granted under related rights.
Many types of works protected under the laws of copyright
and related rights require mass distribution,
communication and financial investment for their
successful dissemination (for example, publications,
sound recordings and films). Hence, creators often
transfer these rights to companies better able to develop
and market the works, in return for compensation in the
form of payments and/or royalties (compensation based
on a percentage of revenues generated by the work).

The economic rights relating to copyright are of limited
duration – as provided for in the relevant
WIPO treaties – beginning with the creation and fixation of
the work, and lasting for not less than 50 years after the
creator’s death.
National laws may establish longer terms of protection. This
term of protection enables both creators and their heirs
and successors to benefit financially for a reasonable
period of time. Related rights enjoy shorter terms,
normally 50 years after the performance, recording or
broadcast has taken place.

Copyright and the protection of performers also include
moral rights, meaning the right to claim authorship of a
work, and the right to pose changes to the work that
could harm the creator’s reputation.
Rights provided for under copyright and related rights laws
can be enforced by right holders through a variety of
methods and for a, including civil action suits,
administrative remedies and criminal prosecution.
Injunctions, orders requiring destruction of infringing items,
inspection orders, among others, are used to enforce
these rights.

What are the benefits of protecting copyright and related rights?
Copyright and related rights protection is an essential component
in fostering human creativity and innovation.
Giving authors, artists and creators incentives in the form of
recognition and fair economic reward increases their activity
and output and can also enhance the results.
By ensuring the existence and enforceability of rights, individuals
and companies can more easily invest in the creation,
development and global dissemination of their works.
This, in turn, helps to increase access to and enhance the
enjoyment of culture, knowledge and entertainment the world
over, and also stimulates economic and social development.

“Neighboring Rights” is one of those terms that can cause an
awful lot of confusion due to the background of the name
itself. It’s often confused with relating to payments from
neighboring countries, when in fact the explanation is far
more basic.
Simply put, neighboring rights are public performance royalties
due to the sound recording copyright holder. Remember,
every song has two basic types of copyrights attached to it…
one for the composition of the song, and one for the
recording of the song. The composition copyright pays the
songwriter and publisher, while the sound recording copyright
pays the artist that recorded the song and record label.
Neighboring Rights

Neighbouring rights, also known as rights neighbouring to
copyright, were created for three categories of people who are
not technically authors: performing artists, producers of
phonogrammes, and those involved in radio and television
broadcasting.
Both copyright and neighbouring rights are similar to those
granted by IP titles, but the moral right is of greater importance
for copyright and neighbouring rights than for other IPRs as it
protects the integrity of a work.
Authors can reproduce their work by any means possible including
printing, broadcasting, recording, performing, translating or
adaptation. They can also financially exploit their work and
prohibit others from using it unlawfully.

In most countries, a work is protected during the author’s lifetime
and after their death their heirs inherit the copyright. In general,
the rights last for approximately 70 years after the death of the
author before falling into the public domain. Within Europe the
duration of these rights was harmonised by an EC Community
Directive and the same duration is now also granted in the USA.
While “performance rights” refer to the right to publicly
broadcast the music composition associated with a given song,
the “neighboring right” is the payment due to the owner of
the sound recording (typically the recording artist and/or the
label) for that same public performance. Payments for
neighboring rights are collected by large international collection
agencies, just like performance rights are.

“Neighboring rights” for performers essentially “sit next to”
the performance right for songwriters in the eyes of the
law, hence the rather strange legal term. They’re also
sometimes called “related rights” because the right “is
related to” the performance right. So any time a song is
broadcast on the radio or TV, or played live in a bar or a
concert, the recording artist/label is due “neighboring
rights.”

Intellectual property refers to creations of the mind: inventions;
literary and artistic works; and symbols, names and images used
in commerce.
Intellectual property is divided into two categories:
Industrial Property includes patents for inventions, trademarks,
industrial designs and geographical indications.
Copyright covers literary works (such as novels, poems and plays),
films, music, artistic works (e.g., drawings, paintings, photographs
and sculptures) and architectural design. Rights related to
copyright include those of performing artists in their
performances, producers of phonograms in their recordings, and
broadcasters in their radio and television programs.
INTELLECTUAL PROPERTY RIGHTS

What are intellectual property rights?
Intellectual property rights are like any other property right. They
allow creators, or owners, of patents, trademarks or copyrighted
works to benefit from their own work or investment in a creation.
These rights are outlined in Article 27 of the Universal Declaration of
Human Rights, which provides for the right to benefit from the
protection of moral and material interests resulting from
authorship of scientific, literary or artistic productions.
The importance of intellectual property was first recognized in the
Paris Convention for the Protection of Industrial Property (1883)
and the Berne Convention for the Protection of Literary and
Artistic Works (1886). Both treaties are administered by the
World Intellectual Property Organization (WIPO).

Why promote and protect intellectual property?
There are several compelling reasons.
First, the progress and well-being of humanity rest on its capacity to create
and invent new works in the areas of technology and culture.
Second, the legal protection of new creations encourages the commitment
of additional resources for further innovation.
Third, the promotion and protection of intellectual property spurs economic
growth, creates new jobs and industries, and enhances the quality and
enjoyment of life.
An efficient and equitable intellectual property system can help all
countries to realize intellectual property’s potential as a catalyst
for economic development and social and cultural well-being.
The intellectual property system helps strike a balance between
the interests of innovators and the public interest, providing an
environment in which creativity and invention can flourish, for
the benefit of all.

Intellectual property rights reward creativity and human
endeavor, which fuel the progress of humankind. Some
examples:
1) The multibillion dollar film, recording, publishing and software
industries – which bring pleasure to millions of people worldwide –
would not exist without copyright protection.
2) Without the rewards provided by the patent system, researchers
and inventors would have little incentive to continue producing
better and more efficient products for consumers.
3) Consumers would have no means to confidently buy products or
services without reliable, international trademark protection and
enforcement mechanisms to discourage counterfeiting and
piracy.

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Dispute Settlement under the GATT 1947
• Articles XXII and XXIII of GATT 1947
– Very limited rules
– Central concept was “nullification and impairment”
of benefits flowing from the agreement
• Diplomatic character of dispute settlement:
No judicial arm, rather all matters were within powers of
GATT Contracting Parties
• “Evolved” practice under GATT 1947

73
Dispute Settlement in the WTO: Aim
• Dispute Settlement Understanding:
– Mechanism aimed at securing compliance with the Covered Agreements
(CA)
– Preserves the rights and obligations of Members under the CA (Art 3.2
DSU)
More detailed procedures for the various stages of
dispute
Appellate review of panel reports and surveillance of
implementation by the DSB

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Dispute Settlement in the WTO: Objectives
To secure a “positive solution” to the dispute.
(Art. 3.7 DSU)
• Preferred outcome:
– To reach a mutually agreed solution
• If not,
– Panel Proceeding ….
– [….and AB review.]
• And then,
– Implementation, or ….
– Retaliatory trade sanctions may be imposed

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Dispute Settlement in the WTO:
Scope
• An integrated
system:
• Applies to all the WTO
multilateral agreements
(Appendix 1)
• A single set of rules for
all disputes (Art 23)
• Only a few special or
additional rules in some
CA (Appendix 2)

76
Dispute Settlement in the WTO: Main Features
• compulsory jurisdiction
• detailed procedures and deadlines
• “complainant-driven”
• “quasi-judicial”
• “automaticity”

77
Dispute Settlement in the WTO: Main characters
• Parties to the dispute: WTO Members only
• Dispute Settlement Body (all the Members)
• Panel ( 3 or 5 panelists)
• Appellate Body (7 persons)
• WTO & AB Secretariats

78
Consultations
Panel
Appeal
Implementation
Adoption

79
Dispute Settlement in the WTO: Consultations
• Who?
– One or more Members (complainants) against another Member
(respondent)
– Possibility for third party Members to join
• Confidential process
• Minimum time limits for complainant

80
Dispute Settlement in the WTO: Panels
• Establishment of a
panel: Automatic
• Composition
“well-qualified government
and/or non-governmental
individuals”
• 6 months or 9 months
to issuance of final
report
• Process confidential,
report public

81
The “matter” in dispute
• The specific
measures at
issue
• The legal basis
(claims)

82
Dispute Settlement in the WTO: The Mandate
Panel Request
Measures Claims
Mandate
Jurisdiction Inform the parties
for their defence
Matter

83
Panel Procedures: deadlines
Establishment
of a panel
Composition
of a panel
Final Report
circulated
max. 6 months
max. 9 months

84
Adoption of Panel Reports
Art. 16 DSU
• Panel reports not
considered for adoption
until 20 days after
circulation
• Adoption within 60
days of circulation,
unless negative
consensus….
… Except if
appealed

85
Appellate Review
• WTO dispute settlement system innovation
• Rules applicable to Appellate Review
– Dispute Settlement Understanding
(Article 17; Article 16.4; Articles 1, 3, 18 and 19)
– Working Procedures for Appellate Review
– Rules of Conduct

86
Appellate Body Members
• A standing body of 7 Members
• Appointment by DSB
• 4-year term, renewable once
• Requirements
– authority and expertise in international trade law
– “unaffiliated with any government”

87
“broadly representative of membership” – Art. 17.3 DSU
Appellate Body Members

How long to settle a dispute?
These approximate periods for each stage of a dispute settlement procedure
are target figures — the agreement is flexible. In addition, the countries can
settle their dispute themselves at any stage. Totals are also approximate.
60 days Consultations, mediation, etc
45 days Panel set up and panel lists appointed
6 months Final panel report to parties
3 weeks Final panel report to WTO members
60 days Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1y 3m (with appeal)
88

Settling disputes is the responsibility of the Dispute Settlement
Body (the General Council in another guise), which consists of
all WTO members. The Dispute Settlement Body has the sole
authority to establish “panels” of experts to consider the case,
and to accept or reject the panels’ findings or the results of an
appeal. It monitors the implementation of the rulings and
recommendations, and has the power to authorize retaliation
when a country does not comply with a ruling.
First stage: consultation (up to 60 days). Before taking any other
actions the countries in dispute have to talk to each other to see if
they can settle their differences by themselves. If that fails, they can
also ask the WTO director-general to mediate or try to help in any
other way.
90

The agreement describes in some detail how the panels are to
work. The main stages are:
Before the first hearing: each side in the dispute presents its
case in writing to the panel.
First hearing: the case for the complaining country and
defence: the complaining country (or countries), the
responding country, and those that have announced they have
an interest in the dispute, make their case at the panel’s first
hearing.
Rebuttals: the countries involved submit written rebuttals and
present oral arguments at the panel’s second meeting.
Experts: if one side raises scientific or other technical matters,
the panel may consult experts or appoint an expert review
group to prepare an advisory report.

○ First draft: the panel submits the descriptive (factual and
argument) sections of its report to the two sides, giving them
two weeks to comment. This report does not include findings
and conclusions.
○ Interim report: The panel then submits an interim report,
including its findings and conclusions, to the two sides, giving
them one week to ask for a review.
○ Review: The period of review must not exceed two weeks.
During that time, the panel may hold additional meetings with
the two sides.

○ Final report: A final report is submitted to the two sides
and three weeks later, it is circulated to all WTO
members. If the panel decides that the disputed trade
measure does break a WTO agreement or an obligation,
it recommends that the measure be made to conform
with WTO rules. The panel may suggest how this could be
done.
○ The report becomes a ruling: The report becomes the
Dispute Settlement Body’s ruling or recommendation
within 60 days unless a consensus rejects it. Both sides
can appeal the report (and in some cases both sides
do).

Second stage: the panel (up to 45 days for a panel to be appointed,
plus 6 months for the panel to conclude). If consultations fail, the
complaining country can ask for a panel to be appointed. The country
“in the dock” can block the creation of a panel once, but when the
Dispute Settlement Body meets for a second time, the appointment
can no longer be blocked (unless there is a consensus against
appointing the panel).
Officially, the panel is helping the Dispute Settlement Body make rulings
or recommendations. But because the panel’s report can only be
rejected by consensus in the Dispute Settlement Body, its conclusions
are difficult to overturn. The panel’s findings have to be based on the
agreements cited.
The panel’s final report should normally be given to the parties to the
dispute within six months. In cases of urgency, including those
concerning perishable goods, the deadline is shortened to three
months.

WTO DISPUTE CASES BY INDUSTRY
Industry Number of cases
Agricultural Products 32
Alcoholic and other Beverages 6
Textile and Clothing 10
Animal Skin Products 2
Electronics 3
Telecommunications 3
Automobiles 5
Aircraft 2
Satellite Systems 1
Cement Products 1
Chemical Products 6
Pharmaceutical Products 5
Other Industrial Products 4
Note: Among eighty-three distinct matters, including settled and inactive cases; above
statistics include five cases of disputes involving more than two industries.

CASE CHARACTERISTICS BY COUNTRY
Complainants Frequencies by
matter
Developed Country against Developing Country 27
Developed Country against Developed Country 36
Developing Country against Developed Country 16
Developing Country against Developing Country 9
Note: Four matters were more than doubly counted because the suits were brought by multiple complainants.

NEW AREAS BEGIN TO EMERGE
Sector By Request
Manufacturing 48
Agricultural 42
General Goods 9
Intellectual Property 10
Others 6
Note: Statistics are from data provided through the WTO website and USTR press
releases.

At all stages, countries in disputes are encouraged to consult each other in order to settle "out of court"
60 days Consultations, mediation, etc.
by 2nd DSB meeting Panel established by DSB
0-20 days 20 days (+10 if the D-G asked
to pick panel)
Terms of referenceComposition
Panel examination (normally 2 meetings with parties; 1
meeting with third parties).
Expert review group
Interim review stage (descriptive part of report sent to
parties for comment. Interim report sent to parties for
comment).
Review meeting with panel, upon request
6 months from panel's composition; 3
months if urgent
Panel report issued to parties.
Up to 9 months from panel's
establishment
Panel report circulated to DSB Appellate review
60 days for panel report, unless
appealed
DSB adopts panel/appellate report(s) including any
changes to panel report made by appellate report
30 days for appellate report
"Reasonable period of time" determined
by: member proposes, DSB agrees; or
parties in dispute agree; or arbitrator
(approx. 15 months if by arbitrator)
Implementation, report by losing party of proposed
implementation within "reasonable period of time"
In cases of non-implementation parties negotiate
compensation pending full implementation
Dispute over implementation: proceedings
possible; including referral to initial panel on
implementation
30 days after "reasonable period"
expires
Retaliation, if no agreement on compensation, DSB
authorizes retaliation, pending full implementation
Cross-retaliation, same sector, other sectors, other
agreements
Possibility of arbitration, on level of
suspension procedures and principles of
retaliation

At all stages, countries in disputes are encouraged to consult each other in
order to settle "out of court"
60 days Consultations, mediation, etc.
by 2nd DSB meeting Panel established by DSB
0-20 days 20 days
(+10 if the D-G asked
to pick panel)
Terms of referenceComposition
Panel examination (normally 2
meetings with parties; 1 meeting
with third parties).
Expert review group
Interim review stage (descriptive
part of report sent to parties for
comment. Interim report sent to
parties for comment).
Review meeting with
panel, upon request

6 months from panel's
composition; 3 months
if urgent
Panel report issued to parties.
Up to 9 months from
panel's establishment
Panel report circulated to DSB Appellate review
60 days for panel
report, unless appealed
DSB adopts panel/appellate
report(s) including any changes to
panel report made by appellate
report
30 days for appellate
report
"Reasonable period of
time" determined by:
member proposes, DSB
agrees; or parties in
dispute agree; or
arbitrator (approx. 15
months if by arbitrator)
Implementation, report by losing
party of proposed implementation
within "reasonable period of time"
In cases of non-implementation
parties negotiate compensation
pending full implementation
Dispute over
implementation:
proceedings possible;
including referral to initial
panel on implementation
30 days after Retaliation, if no agreement on Possibility of arbitration,

○ Similar to those in domestic trade
○ Added risks involved in cross-border transactions
○ Means of payment = terms of payment in
international trade
○ Four commonly used terms of payment – each of
them defers in level of risk and stability for buyer
and seller.
○ Absolute v. relative security of parties (compromise
of the parties interests)
PAYMENT SYSTEMS IN INTERNATIONAL TRADE

Key factors determining the payment method
• Relationship between the seller and the buyer
• The length of business relationship between the
parties (most important factor)
• Nature of merchandise
• Industry norms
• Distance between seller and buyer
• Currency fluctuations
• Political and economic stability

Documentary Credit Procedure
Buyer
(Importer)
Seller
(Exporter)
Importer’s Bank
(Issuing Bank)
Correspondent
Bank
(1) Contract of Sale
(5) Delivery of Goods
(7) Documents Presented to
issuing Bank
(3) Credit Sent to Correspondent
(6)
Documents
Presented
(4)
Letter of
Credit
Delivered
(8)
Documents
& Claim for
Payment
(2)
Request
to Provide
Credit
(9) Payment

International Methods of Payment: Advantages and Disadvantages
Method Risk Chief Advantage Chief Disadvantage
cash in advance L No credit extension required Can limit sales potential, disturb
some potential customers.
Sight draft M/L Retains control and title; If customer does not or cannot
ensures payment before accept goods, goods remain
goods are delivered at port of entry and no payment is due
Letters of credit Banks accept responsibility If revocable, terms can change
Irrevocable M pay; payment upon during contract work.
Revocable M/H presentation of paper; costs
go to buyer
Time draft M/H Lowers customer resistance Same as sight dragt, plus goods
by allowing extanded payment delivered before payment is due
after receipt of goods or received
Consignment sales M/H Facilitates delevery; lowers Capital tied up until sales; must
customer resistance establish distributor's creditworthiness
need political rish insurance in some
countries; increased risk from
currency controls
Open account H Simplified procefure; no High risk; seller must finance
customer resistance production; increased risk from
currency controls

1. Cash in Advance
Cash in advance is a type of payment where the buyer pays the seller
upfront before the goods are shipped. Wire transfers and credit cards are
the most frequently used payment options for this method.
Pros Cons
This method protects the
seller from buyers who may
not honour the terms of the
contract and decide not to
pay.
Although this method protects the seller, it is not
a secure method for the buyer as the buyer will
face the risk of receiving goods that do not
meet the quality agreed on the contract, or
not receiving the goods altogether.
Buyer → Minimal
→ Risk of not receiving shipment or receiving
damaged shipment
→ Unfavorable cash flow
Seller
→ Secure full payment
before shipment
→ No risk of non-payment
→ Risk of losing business to competitors if
offering this as the only accepted international
payment method

Letter of Credit
• A letter of credit is a letter from a bank guaranteeing
that a buyer’s payment to a seller will be received
on time and for the correct amount. If the buyer fails
to make the payment on the goods purchased, the
bank will be required to cover the full or remaining
amount of the purchase.
• Usually some form of securities or cash as a collateral
is required by the bank for issuing a letter of credit,
and charge a service fee, typically as a percentage
of the value of the L/C.

Advised vs. Confirmed
 The Advising Bank simply ‘advises’ the exporter of the letter of
credit; the advising bank is not responsible for the decision to
pay out on the letter of credit. That is the responsibility of the
issuing bank.
 The Confirming Bank undertakes the obligation of the issuing
bank to pay under the letter of credit.
SWIFT - Society for Worldwide Interbank Financial
Telecommunication supplies secure messaging services and
interface software to banks worldwide. Banks send letters of
credit through the SWIFT network to each other. Banks have to
subscribe to SWIFT.
Terms for Letters of Credit

INCOTERMS – (International Commercial Terms) –
Thirteen (13) Universally recognized definitions of
international trade terms – like FOB, CIF, EXW, etc. –
developed by the International Chamber of
Commerce (ICC). They define trade contract
responsibilities and liabilities between buyer and seller.
UCP 600 -(Uniform Customs and Practice for
Documentary Credits) Developed by the International
Chamber of Commerce
Terms for Letters of Credit

○ Standby Letter of Credit – With this LC, the bank will cover
the full or remaining amount of the payment if the buyer
fails to fulfill payment obligations to the seller.
○ Irrevocable Letter of Credit – A letter of credit where it
cannot be modified unless all parties agree to the
modifications.
○ Revocable Letter of Credit – Opposed to the irrevocable
L/C, the bank can modify the L/C under the buyer’s
permission without the consent of the seller. Once it is
revoked, the bank is no longer liable to pay the seller.
Types of Letter of Credit

○ Confirmed Letter of Credit – This L/C involves a bank other
than the issuing bank guaranteeing the letter of credit.
The second bank is the confirming bank, usually the
seller’s bank. The confirming bank would honour the L/C if
the issuing bank defaults.
○ Back-to-Back Letter of Credit – Used when an
intermediary such as a broker is involved between the
buyer and the seller, or when the seller must first purchase
the goods from a supplier that would be sold to the
buyer. This L/C consists of two letter of credits to finance a
transaction.

Deferred Payment Letter of Credit – a letter of credit where
payment is delayed to a fixed date stated in the L/C.
Red Clause Letter of Credit – A letter of credit where the seller
requests a portion of the L/C to be paid before goods
have been shipped and documents have been
submitted.
Payment at Sight Letter of Credit – Payment is made
immediately (maximum within seven days) after the
required documents have been submitted.
Revolving Letter of Credit – a single letter of credit that can
be used for multiple shipments over a period of time. It is
used for regular shipments of the same commodity to the
same buyer.

Pros and Cons of Letters of Credit
Pros Cons
1. L/C is one of the most commonly
used payment methods in the import
and export industry as it minimizes risk
for both the buyer and the seller.
2. L/C protects the buyer since
payment is only required after the
goods have been shipped or
delivered to the buyer.
3. Also protects the seller since the bank
is guaranteeing the payment as well
as conducting a verification process
to ensure the legitimacy of the buyer.
1. Letter of credit is more
expensive than other
payment methods
2. The reliability of the L/C
depends on the
reputation of the
buyer’s bank

Pros and Cons of Letters of Credit
Pros Cons
Buyer
→ Guarantee of cargo being
shipped before payment
→ Obligation by seller to fulfill stated
and negotiated conditions
→ Reliance on seller
to ship goods as
specified
Seller
→ Reliable proof of foreign buyers’
credit prior to shipment of goods
→ Obligation by buyer to fulfill stated
and negotiated conditions
→ Payment by buyer’s bank in the
event of a default
→ Low risk
→ Minimal

Documentary Collections is a payment term where the
seller relies on the seller’s bank (remitting bank) to
collect payment from the buyer. The seller would
send the document to the remitting bank, which is
forwarded to the buyer’s bank (collecting bank)
along with the instructions for payment. The
document is called a bill of exchange (draft) which
requires the buyer to pay the face amount either at
sight or on a specified future date.
Documentary Collections (D/C)

The buyer would then send the fund to the collecting
bank, which is transferred to the seller through the
remitting bank in exchange for those documents.
D/Cs should be used in established trade relationships in
stable markets where the seller and the buyer have
already engaged in a transaction previously. The
seller should also ensure that the funds will not be
blocked due to political and economic reasons in the
buyer’s country. D/Cs are recommended for ocean
shipment
Documentary Collections (D/C)

1. Document against Payment (D/P) – Also known as “Sight
Draft” or “Cash Against Documents”
The documents and the bill of exchange are only provided
to the buyer from the collecting bank once payment is
made by the buyer to the seller. Once fund is received by
the collecting bank, it will then be transferred to the seller
through the remitting bank.
2.Document against Acceptance (D/A) – Also known as
“Cash Against Documents”
The buyer is given a credit extension to pay at a specified
future date through a time draft. Once time draft is
accepted by the buyer, the documents are released by
the collecting bank.
Types of D/Cs

Pros Cons
1. Less complicated and
cheaper than letter of credit
2. The buyer is not obligated to
pay for goods before
shipment
3. More favourable to the
buyer
1. Riskier for the seller since there is
no verification process
2. The bank does not guarantee
payment
3. Not recommended for air and
overland shipments
Buyer
→ More economical than Letters
of Credit
→ Reliance on seller to ship goods as
specified
Seller → Minimal
→ No verification involved
→ No guarantee of payment from
bank
→ No protection against
cancellations

Open account is a transaction where the seller is only paid
typically in 30, 60, or 90 days, after goods are shipped and
delivered to the buyer. Sellers who accept open account
payment method can seek additional security by using export
credit insurance.
Open Account:
Pros Cons
This method is by far the most secure for
the buyer as payment is not obligatory until
the goods have been received.
An open account transaction is the most
advantageous to the buyer, but it is the
least secure method for the sellers; hence
sellers in many riskier industries do not
accept this payment method.
Buyer → Receives goods before payment is due
→ Positive cash flow
→ Minimal
Seller → Can attract customers in competitive
markets
→ High risk of default

Recommended for sales to long-standing customers with
satisfactory payment history
Exporter takes both commercial and political risks
Risk to Seller: completely relies on Buyer to pay invoice
when due
Risks to Buyer: no risks
Export credit insurance provides risk mitigation against both
commercial and political risks
Open Account

The consignment process is similar to that of an open
account whereby payment is only completed after the
receipt of merchandise by the buyer.
The difference lies in the point of payment. With
consignment, the foreign buyer is only obliged to fulfill
payment after having sold the merchandise to the end
consumer. This international payment method is based
on an agreement under which the foreign seller retains
ownership of the merchandise until it has been sold. In
exchange, the buyer is responsible for the management
and sale of the merchandise to the end customer.
Consignment

Pros Cons
Buyer
→ Payment is due only after final
sale of goods to end consumer
→ Quick receipt of goods
→ May have large inventory to
manage
→ Minimal
Seller
→ Lower storage fees
→ Less inventory management
→ More competitive
→ Payment not guaranteed until
end sale
→ Lack of access to and
management of merchandise
Consignment is usually only recommended for buyers and sellers
with a trusting relationship or reputable distributors and providers.
Given the high risk involved, sellers should make sure they have
adequate insurance coverage that can cover both the goods
from transit to final sale and mitigate any damages caused in the
event of non-payment by the buyer.
Pros and Cons of Consignment

International Labour Organization (ILO), specialized
agency of the United Nations (UN) dedicated to
improving labour conditions and living standards
throughout the world. Established in 1919 by the
Treaty of Versailles as an affiliated agency of the
League of Nations, the ILO became the first
affiliated specialized agency of the United
Nations in 1946. In recognition of its activities, the
ILO was awarded the Nobel Prize for Peace in
1969.
International Labour Organization and International
Labour Laws

The following are the principles which gave birth to
the I.L.O and these following principles were
incorporated in Part-XIII of the Treaty Versailles.
(1)Universal peace can be established only if it is
based on social justice and social justice implies the
working of the equitable conditions of labour.
(2) Regulation of labour conditions must be
accomplished internationally because “the failure
of any nation to adopt human conditions for
labour is an obstacle in the way of the other
nations which desire to improve the conditions of
labour in their own countries.

(3) Examples of methods for improving conditions of
labour are indicated as below :-
a. Establishment of maximum working days and week;
b. Prevention of unemployment;
c. Provision of adequate living wage;
d. Protection of labour against sickness, disease and
injury
arising out of his employment;
e. Protection of children women and young persons;
f. Provision for odd-age.

To achieve above mentioned objectives and to
implement these principles, the Peace Treaty
prescribed that a permanent organisation
should be established and thus, the I.L.O came
into existence in the year 1919. Article 1 of the
I.L.O Constitution therefore stipulated that “A
permanent organisation is hereby established
for the promotion of the objectives set forth in
the preamble to this constitution”.

The objectives are as follows
(a)Full employment and the revising of standards of living,
(b) The employment of workers in the occupation in
which they can have the satisfaction of giving the
fullest measure of their skill and make their contribution
to the common well being,
(c)The provision, as means to the attainment of this end,
and under adequate guarantees for all concerned, of
facilities for training and the transfer of labour, including
migration for employment and settlement.
OBJECTIVES OF THE I.L.O

(d) Policies in regard to wages and earning forms
and other conditions of work. Calculate to ensure
a just share of the fruits of progress to all, and a
minimum living wage to all employed and in need
of protection.
(e)The effective recognition of the right of collective
bargaining, the co-operation of management
and labour in the continuous improvement of
productive efficiency and the collaboration
ofworkers and employers in social and economic
measures,

(f) The extension of social security measures to
provide a basic income to all in need of such
protection and comprehensive medical care,
(g)Adequate protection for the life and health of
workers in all occupations,
(h) Provision for child welfare and maternity
protection.

Core Conventions of the ILO: - The eight Core Conventions of the ILO
(also called fundamental/human rights conventions) are:
o Forced Labour Convention (No. 29)
o Abolition of Forced Labour Convention (No.105)
o Equal Remuneration Convention (No.100)
o Discrimination (Employment Occupation) Convention (No.111)
(The above four have been ratified by India)
o Freedom of Association and Protection of Right to Organised
Convention (No.87)
o Right to Organise and Collective Bargaining Convention (No.98)
o Minimum Age Convention (No.138)
o Worst forms of Child Labour Convention (No.182)
(These four have not been ratified by India)

Consequent to the World Summit for Social Development in
1995, the above-mentioned Conventions (Sl.No. 1 to 7)
were categorised as the Fundamental Human Rights
Conventions or Core Conventions by the ILO. Later on,
Convention No.182 (Sl.No.8) was added to the list.
Overall, 135 member States have ratified all eight
fundamental conventions. Unfortunately, 48 member
states (out of 183 member States), including member
states with the highest populations, have yet to
complete ratification of all eight conventions.

The eight conventions, taken together, are more relevant
today in the face of global economic and other
challenges impinging on the welfare and livelihood of
workers in all regions.
 Indeed, they are part and parcel of the overarching
architecture for the universality of human rights,
offering protection to all, and responding closely to
the quest for social justice in a globalized setting.
 They are catalytic to the UN system, the international
community and local communities as a whole.

 India is a founding member of the ILO and it has been a permanent
member of the ILO Governing Body since 1922.
 In India, the first ILO Office was started in 1928. The decades of
productive partnership between the ILO and its constituents has mutual
trust and respect as underlying principles and is grounded in building
sustained institutional capacities and strengthening capacities of partners.
 India has ratified six out of the eight-core/fundamental ILO conventions.
These conventions are:
▸ Forced Labour Convention (No. 29)
▸ Abolition of Forced Labour Convention (No.105)
▸ Equal Remuneration Convention (No.100)
▸ Discrimination (Employment Occupation) Convention (No.111)
▸ Minimum Age Convention (No.138)
▸ Worst forms of Child Labour Convention (No.182)
India and ILO

India has not ratified the two core/fundamental conventions,
namely Freedom of Association and Protection of the Right to
Organise Convention, 1948 (No. 87) and Right to Organise and
Collective Bargaining Convention, 1949 (No. 98).
 The main reason for non-ratification of ILO conventions No.87
& 98 is due to certain restrictions imposed on the government
servants.
 The ratification of these conventions would involve granting
of certain rights that are prohibited under the statutory rules,
for the government employees, namely, the right to strike, to
openly criticize government policies, to freely accept a
financial contribution, to freely join foreign organizations etc.

○ The formation of an ILO Global Commission on the Future
of Work marks the second stage in the ILO Future of Work
Initiative.
▸ It was co-chaired by South African President Cyril
Ramaphosa and Swedish Prime Minister, Stefan Löfven.
○ The commission outlines a vision for a human-centred
agenda that is based on investing in people’s capabilities,
institutions of work and decent and sustainable work.
○ Its has undertaken an in-depth examination of the future of
work that can provide the analytical basis for the delivery
of social justice in the 21st century.
ILO’s Global Commission on the Future of Work

○ It outlines the challenges caused by new technology,
climate change and demography and calls for a
collective global response to the disruptions they are
causing in the world of work.
▸ Artificial intelligence, automation and robotics will
lead to job losses, as skills become obsolete.

○ The key recommendations are:
▸ A universal labour guarantee that protects the fundamental rights of
workers’, an adequate living wage, limits on hours of work and safe and
healthy workplaces.
▸ Guaranteed social protection from birth to old age that supports
people’s needs over the life cycle.
▸ A universal entitlement to lifelong learning that enables people to skill,
reskill and upskill.
▸ Managing technological change to boost decent work, including an
international governance system for digital labour platforms.
▸ Greater investments in the care, green and rural economies.
▸ A transformative and measurable agenda for gender equality.
▸ Reshaping business incentives to encourage long-term investments.

208 - Geopolitics & World Economic Systems Unit3B

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208 - Geopolitics & World Economic Systems Unit3B