Islamic Economics Institute

Wednesday Academic Dialogue (9)

Chair of Ethics and Financial Norms
Université Paris 1 Panthéon Sorbonne – King Abdulaziz University

 

3rd Seminar : The New Dark Side of International Trade
Wednesday 04 November, 2015 (22 Moharram, 1436)


Full Text 

Mehdi El Harrak

Ph D Candidate, Sorbonne Law School

Ecole de Droit de la Sorbonne

 

Abstract

Countertrade and Offset agreements are a growing phenomenon in international trade. It is a way to develop national industries, to encourage scientific development. It consists to force foreign companies to invest in the national economy to be allowed to sign a public procurement. The investment consists of technology transfer, local content, training, job creation... Unknown but decisive on obtaining large contracts, are they the new dark side in international trade? These contracts are signed between a purchasing country and a foreign supplier. As a condition for the sale of goods or services, the foreign firm is required to provide additional economic benefits to the purchasing government's economy. If the foreign company does not accept these requirements, the government will not award the public procurement. Indeed, public money, even if it is used to buy foreign goods or services, must serve an aim of general interest.

What is the true extent of these offset agreements? How are they related to more general trade treaties and to the WTO rules? Don’t they pose some legal challenges? Do they really help meeting development objectives? The presentation will offer some insights on a research in progress and share some open questions.

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