Emerald | Journal of International Trade Law and Policy | Table of Contents

Towards Restructuring the Legal Framework for Payment System in International Islamic Trade Finance

literatinetwork@emeraldinsight.com (Umar A. Oseni) — Thu, 09 May 2013 00:00:00 +0100

Abstract

Purpose - The purpose of this paper is to examine the current legal framework for payment system in international Islamic trade finance vis-à-vis the new regime introduced by the Uniform Customs and Practice for Documentary Credits (UCP) 600 as well as the Shari'ah Standard on Documentary Credits issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Shari'ah Resolutions of selected Shari'ah Boards of Islamic financial institutions. Design/methodology/approach - A partial comparison of both the UCP 600 and the Shari'ah framework for documentary credit is given through the content analysis of relevant sources. Findings - The AAOIFI Shari'ah Standard on Documentary Credits as well as other applicable Shari'ah resolutions of Islamic financial institutions does provide a good framework for a Shari'ah-compliant documentary credit system, which is unique to trade in Islamic finance products, but there is scope for further improvement taking into consideration the two possibilities proposed in the available literature on the subject – harmonization or bifurcation of rules. The UCP 600 also allows for the exclusion or modification of the rules to suit the specific needs of the Islamic finance industry.Research limitations/implications - This study focuses only on UCP 600 and the Shari'ah framework on Documentary Credits though bearing mind that there are other frameworks for documentary credit system such as the International Standby Practices (ISP98) and letters of credit issued under Article 5 of the New York Uniform Commercial Code. Practical implications - Islamic financial institutions should implement the provisions of the AAOIFI Shari'ah standard on documentary credits but may require a different framework for international trade financing involving both Islamic banks and conventional banks.Originality/value - Though few studies have been conducted on Shari'ah issues regarding the application of the documentary credits, this seems to be the first time where a more proactive step is taken to propose two different frameworks for transactions involving Shari'ah compliant financing.

HAVE BITs DRIVEN FDI BETWEEN ECOWAS COUNTRIES AND EU ?

literatinetwork@emeraldinsight.com (Adeolu Olusegun Adewuyi, Abiodun S Bankole) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - Given the inconclusive evidence in the literature on the impact of BITs on FDI flows as well as dearth of literature on this subject matter as regard West Africa and EU, this paper investigates the extent to which BITs and PTIAs triggered foreign investment flows particularly between ECOWAS countries and EU. Design/methodology/approach - Trend analysis was used to trace the link between FDI and BITs, while panel regression models were used to investigate the impact of BITs on FDI during 1980-2010. Findings - Econometric results indicate that, as in most previous studies, BITs have strong positive impact on FDI in West Africa, with this impact significant at a higher level (1%) for FDI flow than stock (5%). The impact of BITs on FDI is significant even with the state of internal factors (such as capital account liberalisation, trade openness, high inflation rate and poor governance) in West African countries. The findings suggest that in the absence of BITs, West African countries would have suffered adversely from poor FDI inflows given their poor macroeconomic stability and governance. On the contrary, the PTIAs did not have significant impact on both FDI flows and stock. The results also show that FDI inflow to West Africa is both market and resources seeking. Research limitations/implications - Our sensitivity analysis may not have been sufficient. For instance, we did not test the impact of the signalling effect of BIT, as well as other vertical FDI such as those from the US. Practical implications - The implication of our findings is that West Africa countries need to design policies and programmes that will enable them maximise the technological spill-over from FDI in order not to be perpetual suppliers of primary products and purchasers of manufactured goods. Further, they have to maintain macroeconomic stability and good governance. They need to understand the type of provisions in the BITs that constituent states signed and compare with the provisions of the PTIAs with a view to discerning what is responsible for the superior response of FDI to BITs. Originality/value - Given the absence of literature on the impact of BITs on FDI flows between West Africa and EU, it becomes imperative to investigate this issue with a view to motivating the investment component of the EPA as investment is one of the Singapore issues that were removed from WTO’s Doha Round.

THE EFFECT OF TRADE AND INSTITUTIONS ON POLLUTION IN THE ARAB COUNTRIES

literatinetwork@emeraldinsight.com (Azmat Gani) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - This paper investigates the effects of trade and institutional quality on pollution in the Arab countries.Design/methodology/approach - The analysis is based in fixed estimation procedure. It utilises cross-country data for thirteen Arab countries into a reduced form equation. Findings - The empirical findings provide strong evidence that across the Arab countries, trade, industrial activity and income have a positive effect on pollution. The test of the Environmental Kuznets Curve (EKC) is found to be negative, providing strong support for the EKC hypothesis. The results also provide strong evidence that regulatory quality has a significant negative effect on pollution.Originality/value - This paper makes a new contribution on the effect of trade and institutional quality on emission levels in the Arab countries.

Exclusivism, Inclusivism and Pluralism in the UK Bribery Act 2010: A UK-Taiwan Anti-corporate Bribery Perspective

literatinetwork@emeraldinsight.com (Joseph Lee) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - This article identifies mechanisms by which an international obligation to prevent or punish corporate bribery can be enforced by a national law through trade relations. Design/methodology/approach - The UK Bribery Act 2010 is an example of national law which enforces OECD anti-bribery norms with a view to effecting an institutional change in the law and morality of other countries. Taiwan is used as a case study to look at how the UK Act may achieve its intended purposes.Findings - Three modes of governance are identified in the enforcement of the Act: legal exclusivism, legal inclusivism, and legal pluralism. In the mode of legal exclusivism, the Act disregards the morality of Taiwan so as to enforce the principle of transparency in trade. In the mode of legal inclusivism, the Act allows UK multinational companies to make their own ‘laws’ so that anti-bribery norms can be more efficiently and effectively diffused. But in the mode of legal pluralism, the Act is forced to acknowledge the law and morality of other countries (e.g. Taiwan), especially when mutual legal assistance is crucial for cross-border investigation and prosecution.Practical implications - Although this article is based on an analysis of how the Act will interact with the law and morality of Taiwan, the model developed provides a lens through which one can show how an international norm enforced by a national law can function in a way that brings about institutional change in other countries. Originality/value - This provides a new insight into how legal norms can be diffused through trade.

An Empirical Analysis of CO¬2 Emission in Pakistan using EKC Hypothesis

literatinetwork@emeraldinsight.com (Khalid Ahmed, Wei Long) — Fri, 14 Jun 2013 00:00:00 +0100

Abstract

Purpose - The purpose of this study is to asses the Carbon emission in Pakistan with four major determinants i.e, Growth, Energy consumption, Trade openness and Population Density, using Environmental Kuznets Curve (EKC) Hypothesis. It is projected that this study would contribute to design road map in formulating the effective energy and mitigation policies in future. Design/methodology/approach - This study investigates the relationship between CO2 emission, economic growth, energy consumption, trade liberalization and population density by using environmental Kuznets curve (EKC) hypothesis for country Pakistan. The cointegration analysis using Auto Regressive Distributed Lag (ARDL) bound testing approach is employed over time series data ranging from 1971 to 2008. Moreover, in the end the stability of variables in estimated model is also checked. Findings - The empirical results supported the hypothesis both in short-run and long-run and inverted U-shaped relationship is confirmed between CO2 emission and growth. The major explanatory variables which contribute to environmental pollution in Pakistan are energy consumption and growth. Interestingly, further we found that in Pakistan Trade liberalization has positive (only in short-run) and population density has negative impact on environmental qualityOriginality/value - This work original and is first of its kind in sense that four major determinants of carbon emission i.e, economic growth, energy consumption, trade liberalization and population density are used at the same time and time series data is composed of 38 years. It is also a surprising finding of this study that population density also contribute to environmental degradation in Pakistan.