UNCITRAL: Why This Little Known Commission Really Matters

Written by Christi Hayes and Fact Checked by The Law Dictionary Staff  

If you asked most people to name a major organization that deals with international trade issues, then the most common answer you are likely to receive is the World Trade Organization (WTO). However, the WTO is not the only major organization when it comes to international trade regulation. The United Nations Commission on International Trade Law (UNCITRAL) has a huge influence on how global trade is conducted. Let's take a look at what UNCITRAL is and why it matters in today's global economy.

UNCITRAL helps harmonize and unify international trade law

UNCITRAL is a subsidiary body within the United Nations that is mandated with finding ways of harmonizing and unifying international trade law. Each country has its own set of laws governing how that country's citizens and businesses trade with people and businesses in countries all over the world. Because international trade laws can vary so much from one country to the next, private parties involved in international trade can find themselves having to deal with a complex network of legal issues. A lack of harmonization can make international trade difficult to carry out, which in turn leads to a loss of business opportunities for individuals and businesses.

How does harmonization happen?

To help countries harmonize their international trade laws with one another, UNCITRAL has a number of tools at its disposal. It can, for example, draft model laws that provide a sort of framework or template upon which individual countries can then model their own domestic laws. By providing such model laws, UNCITRAL helps countries adapt laws that are more likely to reflect global norms. UNCITRAL also publishes conventions, legal guides, practice notes, and rules that also serve similar functions as model laws do.

What's the difference between the WTO and UNCITRAL?

Actually, aside from the fact that the WTO and UNCITRAL both deal with issues relating to international trade, there is not a lot in common between these two organizations. The WTO deals with trade issues that arise between states, such as trade tariffs, reducing trade barriers, and eliminating unfair trade practices. In contrast, UNCITRAL deals with the laws that actually affect people and businesses within states in how they trade with parties all over the world.

Since the 1960s, UNCITRAL has played an integral role in helping people and companies trade with private parties throughout the world. As global trade becomes even more integrated, UNCITRAL is expected to play an expanding role in helping businesses sell and purchase products and services without worrying too much about how laws may differ from one state to the next.

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