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SEPTEMBER 2014
did not provide the necessary evidence for this allegation and declared China’s duties on US luxury cars and SUVs being illegal and in violation of its principles.
Do you think these tariffs are necessary?
Tariffs and duties levied on imported goods are contradictory to the principle of worldwide free trade. However, as long as the manufacturing conditions, especially production cost, are so diverse in many parts of the world, free trade areas can only be established between countries or geographical areas which already have comparable standards, both regarding the quality of their products and the level of cost of production. Within the European Union, all tariffs and duties have been abolished because we are living in a (at least theoretically) homogeneous trade area.
Which do you find most effective between multilateral and bilateral trade agreements?
From the German perspective, the European Union is the free trade area par excellence as all of its member countries have been able to raise their wealth and standard of living over the past 30 to 50 years, despite some backlash during the financial crisis. But, of course, the world is much bigger and free trade should be the rule between all areas of the world which have comparable levels in terms of production standards.
What, in your opinion, are the most challenging aspects concerning International Trade?
Currently, the European Union is in close negotiations with the United States on the Transatlantic Free Trade Zone (Transatlantic Trade and Investment Partnership, or TTIP). If this Free Trade Zone will be in force one day, a large part of the trade will be exempt of such tariffs and duties which will considerably enhance trade an business on both sides of the Atlantic. According to estimations of the European Commission, TTIP has the potential to increase the economies of the European Union by € 120 billion, of the US by € 90 billion and of the rest of the world by € 100 billion.
TTIP strives to reducing trade barriers which by far do not only come along as customs and tariffs but to a much larger degree are contained in
regulations which aim at protecting people from risks to their health, safety, environment and financial security. And these laws differ many times considerably on both sides of the Atlantic. In order to reduce these barriers, one approach is to find out where regulations in the EU and the US, although on the face of it seem to be different, can be considered as equivalent and be mutually recognized so to avoid the unnecessary duplication of product testing on the other side of the Atlantic. Where each other’s regulations cannot easily be compared, the lawmakers can try to set harmonized standards for the future. And a third option consists in aligning procedures for approving or registering new products.
The negotiations on TTIP shall be completed by end of 2015.
Do you feel there need for new legislation in regards to international trade law?
Unfortunately, existing international trade laws which really tend to harmonize cross- border trade, have not been well accepted in the past. I am referring namely to the United Nations Convention on the International Sale of Goods, or CISG, which has been adopted as being directly applicable (unless waived by the contractual parties) by more than 80 countries of the world but until to date, is only applied by a small minority of companies. In Germany we see – and this is my personal experience which has been confirmed by many of my peers – CISG is being explicitly waived by between 90 to 95 percent of all internationally or even globally acting trade companies. And the worst thing is that most of them even do not know it. Thus, from my perspective, one of the challenges we face is to promote existing features of this kind rather than creating new ones …. LM
Contact:
Dr. Thomas Rinne - Senior Partner v. Einem & Partner, Rechtsanwälte Abogados, Goethestraße 7, 60313 Frankfurt/Main
Tel.:+49 (0) 69 920 34 79-0 l Fax: +49 (0) 69 920 34 79-15 Email: rinne@fra.einem.de l Website: www.einem.de
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