The Role of International Economic Soft Law
in the North-South Economic Relations
Niu, Huei-Chih
Introduction
With respect to the rights and obligations of states in international society, one of the
principal characteristics of the sources of international law is their binding power. 1
According to traditional international law it is questionable whether non-binding legal
norms can address international affairs effectively. The adoption of soft law instruments
thus presents a challenge to the traditional theories and normative structure of
international law. 2 Many different interpretations and forms of soft law exist 3 and
publicists debate its appropriate definition.4 Some publicists even insist that such a oft’

legal form does not actually exist.5 Nevertheless, broadly applied international economic
soft law can be regarded as the best evidence for the substantial existence of such legal
non-binding norms.
This raises an important question: why has the field of international economic law,
rather than any other branch of international law, lent itself to the development of soft
law? One possible answer is that the strong conflicts of national interest between the
North-South countries in international economic affairs led to this development.6 The
opposing attitudes to various economic issues held by these countries, and difficulties in
creating binding international economic law to deal promptly with these issues led to the
1
R. Jenning and A. Watts (ed.) Oppenheim’s International Law, Ninth ed., Longman Group UK Limited
and Mrs Tomoko Huson, 1992, Vol. 1, p. 4.
2
The distinction between hard law and soft law can be explained that the term hard law refers to rules of
binding power while soft law refers to the rules which are not binding per se.
3
One of the obstacles to uniform approach to the soft law instruments is their strong variety in form,
language, subject matter, participants, addresses, purposed, follow-up and monitoring procedures. In S.A.
Voitovich, International Economic Organisation in the International Legal Process, Martinus Nijhoff,
1994. p. 91.
4
T. Gruchalla-Wesierski, A Framework for Understanding Soft Law”, Michigan Journal of International
Law, Vol. 30, 1984, p. 44.
5
P. Weil, “Towards Relative Normativity in International Law”, Amercian Journal of International Law,
Vol. 77, 1983, p. 414.
6
The Concept of North-South countries was first proposed by O. Frank in 1959. Because most of the
developing countries located in the South Hemisphere, such as Asia, Afria and Latin America. Whereas the
industrialised countries are mostly in the North Hemisphere.
2
use of soft law instruments as substitutes. The main purpose of this essay is to examine
the correctness of this supposition. However, the subject is too vast to be addressed
without being narrowed down. 7
This essay will therefore focus on the role of
international economic soft law in the development of international economic law in the
past decades and, more specifically, on its legal effect in dealing with the North-South
relations. Chapter one briefly examines two vital elements of international economic soft
law which stimulate its increased use: firstly its vagueness and secondly its reliance on
the legitimate expectation that it will be followed. Chapter two highlights the primary
reasons for adopting soft law into the legal structure of the international economic
system. Finally, Chapter three looks at the achievements of international economic soft
law, such as the adoption of the New International Economic Order (NIEO) and the
implementation of the Generalised System of Preferences (GSP).
7
For instance, in Chapter 3, the legal effect of international economic soft law, the the contributions of soft
law to exchange arrangements of IMF will not be addressed.
3
Chapter 1
The Basic Concept of International Economic Soft Law
The term international economic soft law was first proposed by Seidl-Hohenveldern
in 1979.8 The concept of soft law, however, had already been familiar to international
lawyers for several years before that, and certain distinctive opinions as to its definition
existed.9 Two types of non-binding legal rules are generally regarded as soft law:10 they
are described as legal and non-legal soft law.11 The norms of legal soft law are usually
created by treaties12 but are vague with respect to their contents or weak with respect to
the obligations they impose.13 The norms of non-legal soft law include non-binding or
voluntary resolutions; codes of conduct formulated and accepted by international and
regional organisations; and statements prepared by individuals in a non-governmental
capacity. Although they have no juridical effect, they purport to lay down international
principles.14 On the grounds that the latter form of soft law has played a more significant
role than the former, the following discussion will mainly focus on non-legal soft law.
1.1 Vagueness and Flexibility
The vagueness of soft law can be seen by examining the language of such
instruments;15 for instance use of terms like hould” to convey a suggestion rather than

8
J. Gold, “Strengthening the Soft International Law of Exchange Arrangements”, American Journal of
International Law, Vol. 77, 1983, p 443. See also I. Seidl - Hohenveldern, “International economic soft
law”, Recueil Des Cours, Vol. II, 1979, pp. 173-247.
9
For instance according to Gruchalla’s statement that “ some include both legal and non-legal norms in the
definition (of soft law), others restrict the term only to legal norms.” Gruchalla, supra, p. 44.
10
Please see C.M. Chinkin, ‘The Challenge of Soft Law: Development and Change in International Law’,
International and Comparative Law Quarterly, Vol. 38, 1989, p. 851.
11
In fact, such a category could be highly arguable, on the grounds that soft law is not real law but simply a
phenomenon or a pre-law stage, whereas the so called legal norm soft law is real law with soft
characteristic.
12
Chinkin, supra, p 851.
13
R.J. Dupuy, “Declamatory Law and Progammatory Law: Form Revolutionary Custom to ‘Soft Law’” in
R.J. Akkermen (ed.) Declarations on Principles, a Guest for Universal Peace, A.W. Sijthoff-Leyden, 1977,
p. 252.
14
Chinkin, supra, p. 851.
15
However, not all the words applied in soft law instruments are vague and flexible. One significant
example is using the word “shall” rather than “should” to identify the obligations of the parties at para 4,5,7
of the UNGA Resolution 1514(XV).(UN GAOR Supp. at 66, UN Doc. A/ 4684, 1960) The other instance
can be found in Resolution 3281(XXIX), that the title, “The Charter of Economic Rights and Duties of
States”, implicates an intention to bind.
4
impose a legal obligation.16 Such use of vague language, combined with the fact that most
international economic soft law is merely recommendatory,17 leaves a great deal of room
for interpretation. This makes international soft law very flexible, which is another of its
vital characteristics.
Since many states are cautious to accept binding rules, the
vagueness and flexibility of non-binding rules can be regarded as a consideration which
attracts states to accept them without undue concern. As a rule, states are only prepared
to accept a legal commitment if, in the view of the relevant decision-makers, they will be
reasonably able to comply. If their future ability to comply does not seem certain, states
tend to refrain from entering into legal obligations.18 It seems, however, that states do not
need to exercise the same caution when they consider accepting soft law rulings, given
the advantages of vagueness and flexibility which they possess. As one author eloquently
puts it:
It has always been difficult for states to agree widely or to agree on universally acceptable rules; it
has become even more so in our multicultural world....It can only do this by adopting a flexible
approach that respects state sovereignty whilst binding it with transparent and elastic threads.19
Vagueness and flexibility provide at least a sense of safety which makes soft law
easier for states to accept. In the present international climate states are willing to deal
with problems collectively, but, ironically, they often seek to reduce the limitations and
obligations to which they themselves are subjected. 20 To achieve the goals of acting
collectively on one hand and limiting constraints on themselves on the other, states use
soft law. They use two main techniques in the pursuit of these apparently conflicting
16
“The new international economic order should be founded on full respect for the following Principles”
Para. 4 of the UNGA Res. 3201 (S-VI), “Declaration on the Establishment of a New International
Economic Order”., 28, Year Book of United Nations., 1974, p. 324.
17
Take the resolutions of UNGA as an instance, according to the Article 10, 11, 12, 13 and 14 of the
Charter of the United Nations, the contents of these provisions, “The General Assembly... may make
recommendations...”, despite of the word ‘resolution’ does not appear in the Charter of the UN, such
recommendations should commonly be referred as resolution.
18
M. Bothe, “Legal and Non-legal Norms - A Meaning Distinction in International Relations?”,
Netherlands Yearbook of International Law, Vol. 11, 1980, p. 90.
19
P.W. Birnie, “Legal Techniques of Settling Disputes: The ‘Soft Settlement’ Approach”, in W.E. Butler
(ed.), Perestorika and International Law, Martinus Nijhoff, 1990. p. 184.
20
The adoption of the Final Act of the Helsinki Conference in 1975 may be regarded as one of the
evidences that international commitments raise questions about the nature and effect of international
agreements which are entered into by states but are not intended to be legally binding on the parties.
Therefore , Prime Minister Wilson called the Final Act of the Conference a “moral commitment”, not an
international treaty. On the one hand, the declarations of many participating governments clearly stated that
the document was not intended to be binding as such under international law. Whereas on the other , it
appears clearly that the parties are determined to base their conduct on the provisions of the document, and
expect the same behaviour from the other parties. Bothe, supra, p. 73.
5
goals.
Firstly, states exercise their own discretion to define the obligations they
undertake. 21 Secondly, they avoid accepting legally binding obligations. 22 Sometimes
they use a combination of both these methods. In either case, the adoption of soft law
explicitly reflects the rule that states will only undertake legal obligations when they
expect to be able to comply with them.23
Since soft law is non-binding per se, it is characterised by the relatively wide degree
of discretion it gives to states, as mentioned above. According to Bothe, the vagueness of
soft law is one of the factors making it attractive to states that wish to avoid immediate
legal obligations, but intend to abide by whatever obligations they agree to undertake,24
confirming that its advantage over legal obligations is greater flexibility.
1.2 Legitimate Expectation
As Birnie 25 pointed out,
on-legal manifestations are most diverse and generally
formulated under the auspices of an international organisation. They raise high
expectations of conformity in conduct and uniformity in interpretation (even of vague
obligations to o-operate”) leading to consistency and thus orderly relations”. Since

international economic soft law can be adopted more easily than binding rules, the
adoption of soft law illustrates the intention26 of some states to create legal obligations
21
One example is the principle of non-reciprocal preferential treatment of developing countries, which is
found in the Resolution 3281(XXIX), “Chapter of Economic Rights and Duties of States”. Developed
countries support the aim of this principle and will agree to it in non-legal agreements, but will legally bind
themselves to it only in specific agreements. Developing countries want the principle to be legally binding
on all developed countries. Indeed, developed countries generally disagree with much of the content of the
Chapter, while developing countries assert the Chapter is already international law. in Gruchalla, supra, p.
41.
22
Such cases are not only applied by the developed countries, for instance, the developing countries
adamantly maintain economic sovereignty, but against any legal obligation in international economic
relations necessarily limits economic sovereignty. in O.M. Garibalai, “The Legal Status of Generally
Assembly Resolutions: Some Conceptual Observations”, Proceedings of the American Society of
International Law, Vol. 73, 1979, p. 340.
23
Gruchalla, supra, p. 40.
24
Bothe, supra, p. 86.
25
Birnie, supra, p. 189.
26
As Bothe stated, “Documents which do not create legal obligations nevertheless formulate community or
shared expectations of state behaviour.”, and “Resolutions also give rise to expectations, they trigger a
certain pressure for compliance which is often, as has been shown, effective in long run. Thus, these
resolutions are a non-legal step on the way to legal change”. Bothe, supra, p. 85. See also M.E. Ellis, ‘ The
New International Economic Order and General Assembly Resolutions: The Debate Over the Legal Effects
of General Assembly Resolutions revisited’, in Vol. 15, California Western International Law Journal,
1985, pp. 698-700.
6
(usually upon other states), but avoid the procedural difficulties in making law through
international organisations.
Such intentions fall into two categories. States may intend to comply with the nonbinding agreements they suggest and base their conduct on the provisions of soft law
instruments, while expecting the same behaviour from other parties.27 More importantly,
states may assume that soft law instruments can be transformed into hard law, or be
hardened, through further steps.28 This takes two main forms:29
1) soft law instruments contains rules which are expected to be transformed into
norms of international or municipal law under favourable conditions.
2) soft law instruments are used as pre-legal regulation in the relationship between
member states of international organisations, before the establishment of adequate legal
instruments. In this case soft law may be considered as re-law’.

The reliability of legitimate expectation is highly dependent on the form of soft law
itself. For instance, the level of obligation formulated in a particular document, and thus
the expectation that it will be followed, depends on the precise wording. 30 If an
agreement is expressly called entative”, the expectation of compliance will be rather

low, and there is little chance that such an agreement will be put into legal form. 31
However, the impasse between states with different interests and opposing ideologies,
and the unwillingness of states to accept legal obligations is an obstacle to the
establishment of legal norms under the traditional law-making process. States which
intend to create new legal norms, therefore, develop soft law on the grounds that it is
better than nothing.32
27
Bothe, supra, p. 73.
As Bothe’s words, “Resolutions (soft law) influence practice, and practice influences law. Thus, these
resolutions are a non-legal step on the way to legal change. Ibid., pp. 90-92.
29
Voitovich, supra, pp. 93,94.
30
Bothe, supra, p. 86.
31
Ibid., p. 86.
32
Voitovich, supra, p. 94.
28
7
Chapter 2
The Reasons for International Economic Soft Law
2.1 Structural Changes in International Economic Society
The global move towards decolonization during the late 1940s and 1950s was one of
the principal factors encouraging the establishment of international economic soft law.
Decolonization resulted from the disintegration of the various colonial empires in the
years after World War II and which led to a rapid increase in the number of newly
independent states.33 The majority of these new countries were poor and small since they
had been colonised for a long period of time, and could not afford to support their own
economic development.
Consequently these new states were in great need of
industrialised goods and funds, and they asked for assistance from the industrialised
countries - the post colonial empires.34 The fact that many of these new states could not
survive without outside help, however, is only one side of the coin. The industrialised
countries themselves could not manufacture products without relying on raw materials
imported from these new countries.
In effect, decolonization had deprived the
industrialised states of a direct, reliable hold over many raw materials indispensable to
their industries.35 Therefore, decolonisation not only undermined the political hegemony
of the industrialised countries, but also stimulated North-South economic co-operation.
Moreover, since they possessed numerical superiority, developing countries were able
to use collective action36 in international economic organisations and the UN37 to control
the agenda and voting pattern on international economic matters under their jurisdiction.38
33
The increase is amply illustrated by the number of the UN members in 1945 compared to the number in
1960. During that period, the number of states in the UN rose from 51 original members to over 80
members. The “rising tide of decolonization” led to the admission of 17 newly decolonized states to the
UN in 1960. By 1984 the total number of states in the UN had risen to over 160. D. Kay, "The New
Nations in the UN: 1960-1967" Ellis, supra, n.17, at p. 651.
34
After decolonization, developing countries tried to improve their economic position in the world
economy by: 1) the formula of non-reciprocal preferential treatment for developing countries; 2) a
redistribution of resources and income in favour of developing countries at the expense of the
industrialised countries. N. Horn supra, pp. 339, 340.
35
Seidl-Hohenveldern, supra, pp. 174, 175.
36
For instance the so called Group 77 (G77).
37
The most significant instance was the establishment of the UNCTAD in 1964, under pressure
from developing countries.
38
Such organs include the General Assembly, UNCTAD and the United Nations Economic and Social
Council etc..
8
As a result, the developing countries seriously threatened the traditional dominance of the
industrialised countries and altered the power structure in international organisations.
With respect to international economic relations, international economic organisations
were forced 39 to focus on addressing the economic disparity or
ap” between

industrialised and developing countries by constructing an adequate international
economic system.
This clearly required the formulation of a large number of new
international economic laws. However, due to factors which this chapter will discuss,
this requirement could not be immediately and successfully met using traditional lawmaking procedures.
Therefore, international economic soft law instruments were
evaluated and then applied.
2.1.1 Conflicts of National Interest between the Countries of the North and South
The above-mentioned account of global decolonization suggested that independence
should have promoted harmonious economic co-operation between the North-South
countries to the benefit of both sides. However, a co-operative approach was not as
firmly implemented as developing countries had expected due to the conflicts of national
interest which emerged between the developing south and the industrialised north.
Despite these opposing interests, states still had urgent needs for either economic
assistance or resources from the other side. The developing countries claimed that the
post-colonial powers were responsible for their predicament and must support their
development.40 To achieve this, they aimed to make development assistance a universally
applicable and binding obligation.41
The industrialised countries were obviously unwilling to accept any binding
obligation and asserted that such economic assistance should be given on a voluntary
basis.
Moreover, because of their need for raw materials, they continued to drain
resources from developing countries by employing the networks they had established
39
I have used the word “forced” because the industrialised countries would probably not have voluntarily
co-operated with developing countries if they had not possessed numerical superiority.
40
Immediately after independence, Third World countries sought an alternative to Western economic
ideology which was perceived as imperialist and colonialist. They thought they had found it in Marxist
analysis which had the advantage of making the West responsible for their underdevelopment and
promoting the idea that those responsible should pay. M. Flory, “New GATT and New International
Economic Order” in T. Oppermann (ed.) A New GATT for the Nineties and Europe, Nomos Verlagsgesell
Schaft, 1991, p. 387.
41
Seidl-Hohenveldern, supra, p. 175.
9
during the colonial era. 42
Maintenance of their vested interests, thus gave the
industrialised countries a very strong incentive to avoid any new binding rules and
substantial changes which would realise the intention of the countries of the South to
replace existing economic networks with a ocialist’ structure.43

It is quite understandable that both sides wished to propose solutions which would
give them the greatest advantages, or at least entail the smallest sacrifices.44 However, it
is difficult to achieve any agreement, let alone create a legal obligation or new legal
structure in international society without common interests.45 Soft law instruments are a
possible alternative to overcome economic and political deadlocks: they are concluded by
states because they allow them to combine collective regulation and restraint in economic
dealings with a flexibility and freedom to manoeuvre where events or changing
circumstances so require.46 They were thus increasingly adopted to deal with the conflicts
in North-South economic relations.47
2.1.2 The Claims of Developing Countries
Developing countries realised that two main obstacles needed to be urgently
addressed before they could construct domestic economic systems by manufacturing
products in sufficient quantity and of sufficient value to earn money from their
exportation. The first obstacle was internal economic difficulties such as lack of funds,
knowledge and technology. The second obstacle was the unfairness of the existing
42
Such cases can be found in the declaration of Algeria’s President Boumedienne, a spokesman for the
developing countries, who speaks before the General Assembly in 1974,
“In fact, the colonialist and imperialist powers accepted the principle of the right of peoples to selfdetermination only when they had already succeeded in setting up the institutions and machinery that would
perpetuate the system of pillage established in the colonial era....[T]hey have been able to proceed at will in
fixing the prices services with which they furnish those countries. Consequently, they are in a position to
drain the resources of the Third World through a multiplicity of channels to their own advantage.” (UN
GAOR, 6th Spec. Sess., prov. verbatim rec. A/PV.2208(Apr. 10, 1974) at 2), quoted in Ellis, supra, n.23, at
p. 652.
43
One of their tactics was to change the nature of the decision-making process in international organisations.
See section 2.3.3.
44
Ibid., p. 175.
45
For instance, one of the disadvantages developing countries suffer is that the classical terms of trade are
unfavourable to them. This could be better compensated by more direct aid. If both North and South
possessed common interests then such additional aid was forthcoming. However, since such a common
outlook is lacking, the prospects for such additional aid appears uncertain.
46
Chinkin, supra, p. 852.
47
The adoption of soft law norms of international economic law as a method of overcoming deadlocks in the
conflict over the establishment of a new international economic order has received increased attention in
recent years. J. Gold, supra, p. 444.
10
international economic legal system, which was established by the dominant
industrialised countries during the colonial era.
With regard to the first obstacle, developing countries asserted their state sovereignty
while claiming the right to development. They sought to compel industrialised countries
to provide various forms of economic assistance to fit their requirements by using both
political pressure48 and moral accusation.49 To deal with the inequality of the international
economic legal system, developing countries suggested its reform to create a system
which would permit them to obtain economic assistance and provide more equal
opportunities in competition for trade.50
The industrialised countries did not want to concede these changes on a hard law
basis. Since they still had substantial control over most of the international economic
organisations, the industrialised countries mitigated these claims by addressing them on a
soft law basis, thus, technically avoiding legal obligations.51
2.1.2.1 Sovereign Equality and Rights to Development
In order to achieve their final aim - the improvement of their economic situations developing countries claimed a right to development, and relied upon sovereign equity to
reinforce their independent status.52 They interpreted this ight to development” as a

right to be assisted forthwith to reach a stage of development comparable to that of the
North countries, such assistance was to be given either as outright aid or by the grant of
preferential treatment.53 In essence, the developing countries favoured the imposition of
binding rules, making economic assistance an enforceable legal obligation.
48
This pressure is caused by the majority membership of the developing countries in most of the
international economic organisations.
49
They claimed that the industrialised countries were responsible for their economic embarrassments due to
the colonisation and should pay for that.
50
The phrase “more equal opportunities” means, from the perspective of developing countries, preferential
treatment in international trade to give them a better change to compete. See Section 3.2, GSP.
51
In reality, international economic relations are controlled by very few countries, e.g., the US, Germany,
the UK, Japan and France - who represent half of the world’s total trade. Ten nations, those listed above as
well as Italy, the Netherlands, Canada, Belgium and Switzerland comprise seventy per cent of world trade.
It is these few countries which have the power to determine the international economic structure. F.
Roessler, supra, p. 52. Another noteworthy fact is that during the Uruguay Round negotiations, only a few
industrialised countries, e.g. the USA, Japan, EU , are competent to influence the final decisions.
52
Chinkin, supra, p. 853.
53
Seidl-Hohenveldern, International Economic Law. 2nd Rev. ed., Martinus Nijhoff, 1992, p. 6.
11
No-one would deny that a sovereign state has a right to develop as it sees fit, if such
development is to be achieved by its own efforts and without impairing the existing rights
of other states.54 According to the interpretation of developing countries, this right to
development should be subject to legal principle. Industrialised countries, on the other
hand, although they might be willing to help developing countries in some circumstances,
insist that they have never admitted the existence of such a general right, and, moreover,
try to ensure that assistance is offered on a voluntary basis.55
On the one hand developing countries insisted that all international law must respect
state sovereignty which must be based on strict reciprocity. On the other hand they
disregarded the sovereignty of industrialised countries by seeking to secure compulsory
non-reciprocal and preferential treatment from the industrialised countries in the
economic sphere. It is fair to say that the attitude of the developing countries was
determined by their economic needs alone, leading to logical contradictions.56 Thus their
proposition to impose legal obligations on industrialised countries through international
economic law was difficult to justify and achieve, especially without the agreement of the
industrialised countries.
2.1.2.2 A New International Economic Legal System
Developing countries were aware that under the existing terms of free-market trade
they would be unable to reap profits large enough to enable them to carry out their
ambitious development plans in the foreseeable future.57 They also believed that political
colonialism had merely been replaced by a new economic colonialism.58 They therefore
54
Ibid..
One instance is their attitude to granting aid to developing countries. In so far as they recognised a legal as distinct from a moral - duty to grant such aid, they did so only to the extent that they entered into specific
commitments to that effect. The ICJ has held that the giving of aid “is more of a unilateral and voluntary
nature”, and the cessation of aid cannot be regarded as a breach of the customary law principle of nonintervention. Ibid..
56
Seidl-Hohenveldern, supra, 1979, p. 177.
57
For instance, despite the rapid national economic growth and impact on the world economy of the
Organisation of Petroleum Exporting Countries (OPEC) during the 1970s, there is little evidence to suggest
that most Third-World countries have any real chance to control world markets or to impose terms of trade.
Multinationals at Work: an Inside Assessment, 1983, Y.B. World Aff, 191-192 (1983). Ellis, supra, n.25,
at p. 652.
58
Ibid., p. 653.
55
12
regarded existed systems and the traditional principles of international public law as tools
created solely for the advantage of industrialised countries.
Developing countries
categorised any system or rule that failed to either take their interests into account or
provide adequate measures to address the economic disparity between the North and
South as inherently inequitable and actually inimical to the development interests and
goals of developing countries.59 They therefore proposed that such systems and principles
should be replaced by a new economic order.
As their numerical superiority in the UN and other international economic
organisations grew, developing countries instituted a deliberate campaign to change the
existing international economic structure and the law which supported it.60 However, as
long as trade remained subject to the classical rules of the market economy, their efforts
could only mitigate and not overcome the inequalities in the system61
In reality, the industrialised countries were not unaware of the needs of the Third
World and were willing to help. However, they were also afraid that their own free
market economy system could not function in a world-wide planned economy.
Industrialised states, therefore, preferred to remedy the remaining inequalities by the
granting of aid rather than by reconstructing the international economic legal system.62
Political issues and the dissatisfaction of developing countries, however, led the
industrialised countries to compromise between voluntary assistance and hard legal
commitments by adopting soft law instruments.63
2.2 The Diversity of International Economic Affairs
59
For instance, the adoption of principles of non-discrimination and reciprocity in GATT provisions (e.g.
Article I, the Most Favoured Nation (MFN), and Article III, National Treatment (NT)) illustrate the
inequitable treatment of the developing countries. Because all the contracting parties have to trade on an
“equal” basis without regarding the inferior position of developing countries. Therefore, such an “equal”
basis will push developing countries into an even worse position and is not real equality.
60
For example, the Third World used the General Assembly of the UN to sponsor several resolutions
favourable to their political and economic interests. Such as Res. 1514(XV) on the Granting of
Independence to Colonial Countries and People (at 66, UN Doc. A/4684 (1960)); Res. 1803(XVIII) on
Permanent Sovereignty Over Natural Resources (at 15, UN. Doc. A/5217 (1962)). See Ellis, supra, p. 656.
61
Seidl-Hohenveldern, supra, 1979, p. 177.
62
Ibid..
63
Such political issues usually connect with their national interests rather than the concerns of developing
countries.
13
Another reason for recourse to international economic soft law is the diversity of the
international economic matters. The rapid change in the international economic relations
between the North and South and their requirements make it difficult to form an
international economic legal system able to cope with all foreseeable and unforeseeable
circumstances. One beneficial effect of using soft law instruments is that they can help to
establish some general guidance in the legal practice of international economic relations
to create common standards to address complicated international economic matters.
Moreover, as Seidl-Hohenveldern64 asserted,
conomic relations are not always best
served by the strict application of the law”, economic plans tend to have to leave room for
changes and adoptions, hence, o planner, be he ever so brilliant, is a prophet to foresee

the future with certainty,” either on the international or domestic level. Therefore, soft
law instruments with their flexibility and vagueness, seem competent to temporarily deal
with the various issues arising in international economic relations.
2.3 Difficulties Involved in Creating Hard Law
International economic law is mostly treaty-based,65 and this tendency has increased
during the past decades. At the same time, as Schwarzenberger66 and Fox67 point out, the
role of custom is also important in international economic law. The limitations of such
rules and the difficulties involved in the process of their creation, however, is another
vital reason for adopting international economic soft law instead. 68 Their limitations
mainly come from inherent drawbacks in these legal norms themselves. The difficulties
in law-making derive partly from the use of consensus in the decision-making process,
and partly from the opposing national interests of the North-South countries, which
64
Seidl-Hohenveldern, supra, 1992, p. 43.
Such assertions can be confirmed by the relative success of agreements establishing international
economic organisations or agreements such as the IMF, the GATT, the World Bank, and others. Thus
Zamora assumed that international economic law is treaty-based (i.e. embodied in formal international
agreement), although it is also recognised that the decisions and practices of these same organisation also
create international economic rules. S. Zamora, “Is There Customary International Economic Law?”, Vol.
32, German Yearbook of International Law, 1989, p. 10.
66
G. Schwarzenberger, “The Principles and Standards of International Economic Law” in Vol. 117, Recueil
des Cours, Hague Academy of International Law, 1966-I, p. 14.
67
Fox states that the sources of international economic law are based on the sources of public international
law. H. Fox, “The Definition and Sources of International Economic Law”, in Fox (ed.) International
Economic Law and Development States. British Institute of International and Comparative Law, 1992, p.
20.
68
Bothe, supra, pp. 90-92.
65
14
prevent developing countries from persuading the rest of the world to accept their
maximum demands, either as international customary law or as a treaty.
2.3.1 The Limitations in Forming and Employing Conventional Law
Generally speaking, the basic shortcomings of multilateral treaties are that they are
slow to be concluded, slower still to come into force, and bind only the parties which
subscribe to them.69 There is also growing concern that there are now simply too many
instruments and states cannot effectively implement them all.70
As Horn has pointed out, there will thus be a long time lag while a convention or
treaty is negotiated, consented to by all concerned, and then formally accepted.71 Such a
time lag may restrict the development of international economic law as new North-South
requirements emerge. Furthermore, due to the structural changes in the world economy
brought about by heightened interdependency, the stakes at such multilateral conferences
are considerably higher than those of earlier decades: because economic power is
dispersed among many powerful competitors, it is becoming harder to achieve agreement
on new multilateral treaties, amendments to existing treaties, or new economic codes.72
Consequently, the increasing use of soft law forms reflects the insufficiency of treaty law
to deal successfully with the urgent and diverse demands of international economic
matters.
Nevertheless, the multilateral treaty is still the preferred instrument where formal
rights and obligations need to be specified.73 Soft law is well suited to specifying interests
and values, but it does not provide the required precision for such matters as the passing
of title or of risk. Moreover, as Chinkin stated, there is a continuing process of treatymaking in the formation of international economic relations which runs parallel to and
supplements the developments in soft law. The deliberate choices made between hard
69
Chinkin, supra, p. 860.
Ibid., n. 30, at p. 856.
71
N. Horn, supra, p. 348.
72
Zamora, supra, p. 10.
73
Although it is the substantive claims of the newly independent states that challenge the international legal
order, those states often favour the use of traditional sources to bestow the required legality upon their
claims. However, a soft law form is preferable to either no outcome at all to negotiations, or to a treaty with
diluted and vague provisions. Chinkin, supra, p. 861.
70
15
law and soft law forms reinforces the view that they are not intended to be used for the
same purposes.74
2.3.2 The Limitations in Forming International Customary Law
Two criteria must be taken into consideration to form international customary law: the
actual practice of states and their opinio juris sive necessitates (opinio juris for short),
which, according to Starke 75 and Ellis 76 , can be explained as the psychological aspect
involved in the formation of customary rules and the feeling and belief that a state is
legally obligated under international law to act in a particular manner. To prove the
existence of the former criterion, the passage of time provides evidence of generality and
consistency, even though the International Court does not stress the time element as such
in its practice.77 As for the psychological element, it is necessary to examine not only
what states do, but also why they do it.78 It is, however, difficult to ascertain these two
elements in a short period of time in order to establish a new customary international
law.79 In most circumstances international customary law is therefore unable to address
the issues of international economic relations promptly.
The other problem that limits the use of international customary law in dealing with
economic issues is the rule about persistent objectors. Generally, no rule of international
customary law can be developed to bind persistent objectors to that rule. 80 Since the
industrialised countries lost their majority in the General Assembly they have been
persistent objectors to at least the more extreme demands of the Third World, whether
these demands have been presented as proposals or in the guise of resolutions adopted by
the majority of the United Nations General Assembly.81 Some of the demands embodied
in such resolutions could be enforced only if these persistent objectors had co-operated.82
Similarly, a customary rule which is adopted only by a group of developing countries, for
74
Ibid., pp. 861, 862.
J.G. Starke, Introduction to International Law, Butterworth International Editions, 10th ed., 1989, p. 38.
76
Ellis, supra, p. 688.
77
I. Brownlie, The Principle of Public International Law, Oxford, 4th ed., 1991, p. 5.
78
M. Akehurst, A Modern Introduction to International Law. Routledge, 6th ed., 1991, p. 29.
79
B. Cheng, “United Nations Resolution on Outer Space: ‘Instant’ International Customary Law?” Indian
Journal of International Law, Vol. 5, 1965, p. 23.
80
Seidl-Hohenveldern, supra, 1992, p. 38.
81
Seidl-Hohenveldern, supra, 1979, p. 191.
82
E.g. the prohibition against adopting economic and political measures in reaction to the powers of the
organisations of primary commodity producers so as to limit their power; or GSP.
75
16
instance the South, will not be able to bind the other countries which are persistent
objectors, the North for instance. Consequently, the existence of persistent objectors and
their unwillingness to co-operate means that international customary law cannot be
expected to solve conflicts, especially in various international economic affairs, let alone
improve effective economic co-operation.
2.3.3 The Change in Decision-Making Procedure in International Organisations
The change in decision-making procedure between the 1940s and 1960s is another
principal reason for the adoption of international economic soft law. During the last years
of World War II, the concept of majority rule in various forms dominated global
international economic organisations and the conference which established the post-war
UN family of organisations.83 Under the dominance of the industrialised countries and for
their benefit, majority rule became the standard for decision-making in universal
international organisations and conferences. However, the structural changes caused by
decolonization meant that industrialised countries could no longer benefit from this rule.
Thus a new decision-making technique was introduced to these organisations in the
1960s, the technique of consensus.84
83
These include the Founding Conference of the FAO in Hot Springs (1943), the United Nations Monetary
and Financial Conference of Bretton Woods (1944) which created the IMF and IBRD, and the Civil
Aviation Conference of Chicago (1944) which set up the ICAO. K. Zemanek, supra, pp. 859, 860.
84
While discussing the historical development of consensus, Zemanek states, “It seems that consensus as a
decision-making process appeared first in the context of law-making on outer space. On 1 December 1961,
Ambassador Matsch, the Austrian Chairman of the UN Committee on the peaceful Uses of Outer Space, a
subsidiary organ of the General Assembly, read the following understanding for the record: ‘It has been
agreed among the members of the Committee that it will be the aim of all members of the Committee and its
Sub-Committee to reach agreement in its work without need for voting.’ ” . Zemanek, “Majority Rule and
Consensus Technique in Law-Making Diplomacy” in R. MacDonald, (ed.) The Structure and Process of
International Law, Martnus Nijhoff, p. 862. In addition, the follow statement of Voitovich can provides
evidence that consensus has been employed in some international economic institution during 1960s.“The
trend to strive for consensus can be observed in the OECD, the EFTA, the OPEC...The council of GATT
has taken decisions by consensus since its establishment in 1960. Although, formally, consensus is not
provided by the General Agreement. Many decisions of the IMF are also taken by consensus.” Voitovich,
supra, p.74. Moreover, a new instance is the WTO decision making procedure, Article IX: 1 of the Charter
specifies that the GATT practice of decision making by consensus is to be continued the WTO Ministerial
Conference (MC) and General Council (GC), but when consensus cannot be achieved, decisions will be
made on the basis of the majority of votes cast, with each member having one vote, unless otherwise
provided. John Jackson, Legal Problems of International Economic Relations, 3rd ed., West Publishing
Co, 1995, p. 312.
17
It may be unfair to highlight the fact that recourse to consensus was advantageous to
the industrialised countries, but it was probably the most important reason for its
adoption. Voitovich mentions that the factors supporting this procedural change were
respect for the will of the minority, protection of their interests and concern about
effective implementation. 85
One important point should be raised here.
While
industrialised countries held the majority in those organisations, they supported majority
rule without taking into account the interests of the minority, whereas, when they found
themselves in the minority, they immediately proclaimed the drawbacks of majority rule
and introduced consensus to protect themselves. Theoretically speaking, Voitovich

opinion seems acceptable, because in theory majority rule ignores the rights of the
minority, and consensus aims to deal with this weakness. However, further consideration
reveals that the development of a decision-making procedure based on consensus leaves
decision-making under the industrialised countries’ control no matter whether they are in
the majority or minority and mainly serves their interests. 86 Thus, the emphasis on
consensus as protecting the interests of the minority is only one side of the coin, as in
reality the use of consensus serves as an excuse for the industrialised countries to avoid
any disadvantage.
Up until now, neither legal writers nor the representatives of states who have
commented on consensus, have offered a definition going beyond a mere description of
the process.87 However the general concept of consensus according to Zemanek is that:
It should be adopted by the largest possible number of states. Instead of seeking the decision
through a vote, which might produce an uncooperative minority, efforts are made to bring it on
through a process of negotiations and mediation involving all interested parties, making it thus
possible for all to identify with the result as a whole even if dissent is registered on details.88
Based on this definition, consensus can be regarded as a better method of generating
mutually beneficial rules of conduct. However, the effect of acts passed by consensus
85
“(These countries) realised that decisions taken against the minority’s will could cause problems of proper
implementation. It is quite understandable that only mutually beneficial agreements can produce effective
rules of conduct. As a potential tool of protection of the minority’s interests, consensus become a
counterweight to majoritism in decision-making to keep the balance of interests and opportunities of the
IEO’s member states.” Voitovich, supra, p. 75.
86
The process of rule-making has been considerably expanded and accelerated, and has become subject to
direct political influence. N. Horn, supra, p. 346.
87
One typical instance is when Justice Potter Stewart admitted during an obscenity case that he could not
define ‘hard-core pornography’ but added, ‘I know it when I see it’. K. Zemanek, supra, p 873-874.
88
Ibid..
18
may be weakened by the reservations of any member state. 89 In addition, bargaining
power is one of the principal elements in negotiations. As the reality is that many
developing countries have very little bargaining power in world markets and international
relations, they can only pursue their interests with difficulty, and may have to suffer cost,
e.g. concessions, to achieve consensus.
The interests of developing countries, therefore, appear to be better served by nonmandatory language which avoids the difficulty of achieving consensus,90 even though
the cost of achieving a consensus based on vague soft law notions is a lack of
predictability as to how these rules should be applied.91 Accordingly, it can be concluded
that another reason for recourse to soft law when trying to regulate economic relations on
a world-wide level is the discrepancy of bargaining power between member states in most
international organisations.
2.4 Avoiding the Obstacles in National Legislative Procedure
Another reasons for using soft law norms is to avoid the time-consuming process of
decision-making t home”. In the OECD decisions only become enforceable after they

 constitution.
have met with the requirements of each member state
92
Member states
may, however, possess extremely distinctive national decision-making processes. Hence,
it is difficult to foresee how long it will take to make decisions enforceable or what will
happen to such decisions on the national level, especially in important industrialised
countries such as the United States. The failure to establish the International Trade
Organisation (ITO) in 194893 can be regarded as one such case. As Bothe rightly pointed
out, his leads to one of the most important (and problematic) reasons for the non-legal

approach (soft law): avoidance of problems in the sphere of national procedures,
especially from the legislative branch".
Thus, in the field of international trade
regulations and GATT in particular, soft law instruments have been used.94
89
S.A.Voitivich, supra, p. 76.
Seidl-Hohenveldern, supra, 1992, p. 44.
91
S. Zamora, supra, p. 35.
92
Pursuant to Art. 6.3 of the OECD Convention, “no decision shall be binding on any member until it has
complied with the requirements of its own constitutional procedures.” Voitovich, supra, p. 83.
93
The Havana Conference of 1948 completed the draft ITO charter, but the ITO never came into being.
The principal reason for this was the failure of the United States Congress to approve it. J. Johnson, The
World Trading System, 1986, p. 34.
94
Bothe, supra, pp. 90-92.
90
19
20
Chapter 3
The Legal Effect of International Economic Soft Law
3.1 Soft Law and the New International Economic Order (NIEO)
In the late 1960s the developing countries started to insist on the importance of a new
international economic system in order to improve their poor economic position. In 1974
their main proposals were adopted as two resolutions at the Sixth Special Session of the
eclaration on the
United Nations General Assembly. They were entitled the

Establishment of a New International Economic Order” (Resolution 3201(S-VI)) and the
rogramme of Action on the Establishment of a New International Economic Order”

(Resolution 3202(S-VI)).95 The concepts set out in the NIEO Declaration and Programme
of Action were supplemented and codified later in 1974 by the harter of Economic

Rights and Duties of States” (Resolution 3281(XXIX)).
3.1.1 The Reasons for Using Soft Law Norms
Horn remarked that,
n NIEO rule-making process, two contradictory tendencies can
be observed. One is to avoid formal law-making procedures, the other is to make rules
and establish regulations which have the effects and binding force of law”.96 This raises
the question: Why did these countries avoid using formal law-making procedures and
create the NIEO on a soft law basis?
The NIEO resolutions have been recognised as the
 entrepieces” of developing
countries’ concerted effort over the last twenty years to change existing international
economic relations. 97 The approach to issues encompassed in the development of the
NIEO is, however, contrary to traditional principles of international law such as sovereign
equality, 98 non-preferential and reciprocal treatment, and non-discrimination. 99 The
95
UNGA, Res. 3202(S-VI), 29 UN GAOR (No. 1) at UN Doc. A/ 9559(1974).
Horn, supra, p. 347.
97
Ellis, supra, pp. 647, 648.
98
N.Horn, supra, p. 344. NIEO implies, however, at least three modifications of the traditional concept of
sovereignty:
1)economic independence;
2)international economic bureaucracies and redistribution mechanisms;
3)whether sovereignty understood within the NIEO concept implies the idea that states should have reduced
duties and obligations under international law in their international economic relations.
96
21
struggle between the countries of the North and South economic blocs in the formation of
the NIEO therefore deserve special attention because it offers an answer to the question of
why the NIEO has been developed using soft law.
The basic ideas in the NIEO also represent the developing countries’ intention to
restructure the international economic system.100 Surely, such a new order could not be
achieved simply through treaties, through the development of customs, or through the
recognition of general principles by all states. 101
Developing countries therefore
apparently rejected the traditional sources of international law, and chose a soft law norm
- the General Assembly resolutions, instead.
This does not mean that developing
countries had no intention of establishing NIEO principles as legally binding rules, in
fact, they maintained102 that General Assembly resolutions could constitute a source of
international law.103 In the wake of this claim, they have systematically drafted various
instruments, previously put forward in resolution form, 104 with the intention of giving
legal effect to specific precepts of the NIEO.105
The central aim of the new economic order, however, is to create certain norms
pertaining to international economic matters which will particularly benefit developing
countries. Thus, industrialised countries fear that such new rules do not take sufficient
account of their interests. As a result, they have tried to prevent the establishment of new
rules disadvantageous to themselves.
The establishment of the above mentioned
resolutions, therefore, cannot be regarded as a sign that the industrialised countries have
99
These contrary approaches can be examined in the GSP. Please see section 3.2.
N. Norn, supra, p. 338.
101
Chinkin, supra, p. 860.
102
See generally Sohn, “The Shaping of International Law”, Vol. 8, Georgetown Journal of International
Law, 1978, pp. 1, 13. Also see Youof, “The Impact on International Law and Relations of the ‘Legislative
Activity by the General Assembly’” Vol. 1 Singapore Law Report, 1969, p. 216. “At several sessions of the
Sixth Committee of the General Assembly,...representatives from Africa, Asia, South America...suggested
that the resolutions of the international organisations did in various ways contribute to [the] creation and
operation of international law.”
103
Chinkin p. 860. “...perhaps the success of the development of human rights law from the Universal
Declaration on Human Right was an encouraging model to adopt.”
104
As Bothe’s words, “The whole arsenal of pressure available in the UN has been mobilised in order to
promote changes in the existing international economic system in favour of the underdeveloped countries.
For this purpose, resolutions of a programmatic character, e.g. the International Development Strategy for
the Second United Nations Development Decade (2626(XXV)) and resolutions purporting to state existing
law, e.g., those concerning permanent sovereignty over natural resources (Res. 1803(XVII), 2158(XXI),
3171(XXVIII), have both been adopted. Two resolutions are of particular importance in this struggle for a
NIEO: 3201 and 3281”. Bothe, supra, p. 80.
105
Ellis, supra, pp. 649, 650.
100
22
identified themselves with the goals of developing countries. On the contrary, their
strong unwillingness appears clearly, not only in the voting record of Resolution
3281(XXIX),106 which they voted against or abstained from, but also in their insistence
that the resolutions of the UN General Assembly are merely recommendatory, and that
the principles of the NIEO should be non-binding.107
Since soft law instruments are very varied, they are able to establish an overall
political framework for the proposed new economic order in general language. Soft law
instruments, therefore, are functional in comprising generalised policies and
programmatic statements to balance the interests of both sides, as well as more detailed
attempts at regulation in various precise fields. 108 Although the establishment of the
NIEO on a soft law basis makes it more like a statement of ethical values and political
norms than a real law, it has been made with the intention that it will become legally
effective sooner or later.109
3.1.2 The Fight for Resolution 3281(XXIX)
Resolution 3201(S-VI) was adopted by a consensus, yet many industrialised countries
held serious reservations towards it.110 Resolution 3281(XXIX) was adopted by a roll-call
vote of 120 in favour; 6 against; and 10 abstentions. It was the industrialised countries
which voted against the resolution or abstained. 111 As the records shows, the latter
resolution has not been entirely accepted, either as a reflection of existing law or even as
a political guideline. 112 However, if the industrialised countries’ assertion that the
resolutions of the UN General Assembly are solely recommendatory and non-binding per
se is true, why did they still decide to oppose the adoption of the NIEO resolutions?
106
For further details, please see section 3.1.2.
M. Mendelson, “The Legal Charter of General Assembly Resolutions: Some Considerations of
Principle”, in K. Hossain, (ed.), Legal Aspects of the New International Economic Order, New York,
London, pp. 95-107, 1980.
108
Chinkin, supra, p. 852.
109
Horn, supra, p. 348.
110
Bothe, supra, n. 83, at p. 80.
111
Except for Australia, none of the developed states cast a vote in favour of the resolution. S.K.Chatterjee,
“The Charter of Economic Rights and Duties of States: An Evaluation after 15 years”, Vol. 40,
International and Comparative Law Quarterly, 1991, n. 26,27, at p. 672.
112
Bothe, supra, p. 80.
107
23
As a rule, countries vote against a resolution may simply because they disagree with
it. However, this rule may be insufficient to answer why did industrialised countries
change their attitude to vote against resolution 3281(XXIX) right after they accepted
resolution 3021(S-VI). It can be said that resolution 3281(XXIX) was adopted at the
peak of the effort to establish the NIEO as a real law. 113 The purpose of resolution
3021(S-VI) was to deal with approximately the same issues using more declarative and
less legal language.
114
The industrialised countries recognised that resolution
3281(XXIX) intended to do more than reflect their position, thus, in order to avoid later
use of the voting record as evidence of state practice or opinio juris, they voted against it.
The following points indicate the aim of using resolution 3281(XXIX) to as a set of
legally binding rules:
1) The title,
harter of the Economic Rights and Duties of States”, expressly states

the expectation that the resolution will create legal rights and obligations, rather than
merely make recommendations.
2) At the end of part I , the phrases,
 ssembled the elements required for the
completion and adoption of the Charter...” and,  dopts and solemnly proclaims...”,
illustrate the intention that the resolution should be binding on all parties, making the
resolution more like a treaty.
3) The Charter uses phrases such as
 hall”,
 as/have the rights” to
highlight that economic rights are inherent rights, and to imply that they are enforceable.
4) The Charters uses the phrases, t is the duty of states” and as/have the duty or
115
and
116
responsibility”117 to impose inherent duties or responsibilities upon all states.118
With such strong intention, the Charter
 aims expressly challenge the traditional
international economic structure which mainly functioned for the benefit of industrialised
113
Bothe supra, p. 80.
Second paragraph of the foreword, “Solemnly proclaim our united determination to work urgently for the
establishment of a new international economic order...” illustrates that this Declaration is aimed to
proclaim to establish NIEO, rather than identify what is NIEO, namely, this Declaration is more politicised.
The other instance can be examined in Para 4, using the language that “The NIEO should be founded
on ...” rather than “The NIEO is...”, shows its intention that not to create a legal binding instrument.
115
For instance, Article 2, para. 1, “Every state has and shall ...”.
116
Instances are Article 2 para. 2, “Each state has the right...”, Article 4, 5,12, etc.
117
For example, Article 6 “It is the duty of states...”, Article 7, “Every state has the primary responsibility
to ...”, Article 14, “Every states has the duty to...” and Article 15, 16 etc.
118
Chatterjee, supra, p 680. Three particular phrases have been used repeatedly in the Charter:
a) inherent rights (have the right);
b) inherent duties or responsibilities (have the duty or responsibility);
c) non-obligatory duties(should).
114
24
nlightened self-interest” the industrialised countries, of course,
would like to remain the twisted old order. As Seidl-Hohenveldern says, hus, the fight
for the NIEO in reality, is not a fight against a classical ld order’, but against an order
countries. Prompted by
itself already some distance from it”.119
3.1.3 The Evaluation of the Soft Law Based NIEO
Although the concept of NIEO was adopted on a soft law basis, and its practical
impact has not reached initial expectations, to conclude that the NIEO charter has failed is
inappropriate. At the very least, the NIEO charter challenged classical legal theory and
legal policy more than it had ever been challenged before. The challenge it presented can
be divided into three main parts:
1) The NIEO formulated in detail the normative contents of the principles of
international economic law and may be used for their interpretation;
2) It constitutes evidence of some basic customary rules of international economic
law,120 although, this evidence is weakened by the negative votes and abstentions of the
industrialised countries;
3) It suggests authoritative recommendations on the development of existing
international economic law, and the formulation of new norms;121
Furthermore, the emergence of the so called newly industrialising countries (NICs)122
is evidence that the concept of NIEO has successfully promoted economic development
in some developing countries, and has improved the integration of national economies
into a coherent world economy.
3.2 The Generalised System of Preferences (GSP) - a Remarkable Soft
Law Based System
3.2.1 The Development of GSP
119
The “old”, classical international economic order was in perfect harmony with the doctrine of sovereignty
prevailing of the industrialised countries at that time. I. Seidl-Hohenveldern, supra, 1992, p. 4.
120
For instance, the right to nationalise foreign property, the principle of economic non-discrimination, etc.
121
Such as the rules concerning regulation and supervision of the activities of transnational corporations;
transfer of technology, tariff preferences to developing countries, non-use of economic coercion.
122
These countries include Taiwan, South Korea, Mexico, etc..
25
The Generalised System of Preferences (GSP) is one of the principal soft law based
achievement 123 that have contributed significantly to the development of North-South
economic co-operation. The concept of the GSP can be defined as a system composed of
individual national schemes each based on common goals and principles and aiming to
provide developing countries with broadly equivalent opportunities for expanded export
growth. 124 It was developed from the idea of preferential treatment, demanded by
developing countries since 1950s. In 1964 , this concept was proposed in Principle Eight
of the UNCTAD I, which stated the principle of referential treatment of developing

countries in international trade relations”.125 However this objective was not realised as
industrialised countries either voted against it's adoption or abstained.126 One vital reason
for their opposition was that the principle was based on non-reciprocity, which conflicted
with the MFN clause of the GATT agreement. Four years later, industrialised countries
had recognised that equal tariff treatment, on the basis of MFN clause, did not permit
developing countries to advance as rapidly as desired, 127 and that temporary tariff
advantages for all developing countries was one way of dealing with the issue.128 As a
result, resolution 21(II), in UNCTAD II, was adopted, recognising,
nanimous

agreement in favour of the early establishment of a mutually acceptable system of
generalised, non-reciprocal and non-discriminatory preferences”.129
The principles underlying the preferential treatment in resolution 21 (II) were
incompatible with the obligations stated in the MFN clause in GATT, therefore,
preferential treatment could not be inserted into the GATT system directly. The legal
basis of this preferential system was not successfully established until the Contracting
Parties approved a waiver to the MFN on 25 May 1971. This waiver, however, was only
123
“GSP was explicitly agreed that the granting of a preference does not constitute a legally binding
commitment.” F. Roessler, supra, p29. See also A. Yusuf, supra, p. 77.
124
J. Jackson, supra, 1995, p. 1128.
125
Principle Eight, in short, “Developed countries should grant concessions to all developing countries and
extend to developing countries all concessions they grant to one another and should not, in granting these or
other concessions, require any concessions from developing countries”, in addition, “New preferential
concessions, both tariff and non-tariff, should be made to developing countries as a whole and such
preferences should not be extended to developed countries”.
126
13 of them voted against, 23 abstained, including some developing countries, e.g. Republic of Vietnam.
UNCTAD I, Proceedings, Final Act and Report, Vol.I, 1964, p. 20.
127
One consequence is the new creation of Part IV of GATT in 1965. Article XXXVI, para. 8 “The
developed countries parties do not except reciprocity for commitments made by them in trade negotiations
to reduce or remove tariffs and other barriers to the trade of less-developed contracting parties.”
128
A. Yusuf, supra, p. 82.
129
UNCTAD II, Proceedings, Second Session, Vol. I, Report, 1968, p. 38.
26
granted to industrialised contracting parties for a period of ten years, 130 which surely
undermined developing countries expectations of building a permanent legal basis for
GSP. In the harter of Economic Rights and Duties” the concept of GSP was again

brought up, “...developed countries should grant generalised preferential, non-reciprocal
and non-discriminatory treatment to developing countries..." 131 , illustrating the urgent
requirement of developing countries to create a preferential trade system.
After developing countries made a series of efforts at the Tokyo Round of Multilateral
Trade Negotiations in 1979, an enabling clause was finally adopted by consensus. 132
Significantly, this enabling clause provided a permanent legal framework for the
differential and more favourable treatment of developing countries in international trade
relations, notwithstanding the provisions of Article 1(1) of GATT.133 Through this clause,
the GSP was granted a permanent legal basis within the legal structure of GATT.
3.2.2 The Practical Significance of GSP
After having been implemented by 25 industrialised countries134 over more than two
decades, the GSP has effectively provided substantial benefits to both developing
countries and industrialised countries. On one hand, certain developing countries135 have
successfully promoted their domestic economic growth, and some of them, e.g. the NICs,
have gradually raduated” from the list of developing countries. On the other hand,

industrialised countries have also gained remarkable advantages.
For instance, by
granting tariff preferences, they have been able to stabilise their national economies and
avoid inflation. Moreover, by extending trade relations they can easily obtain cheap
materials to reduce the cost of manufacture and discover new export markets in
developing countries. Consequently, a high degree of economic interdependence has
130
“That without prejudice to any other Article of the General Agreement, the provisions of the Article I
shall be waived for a period of ten years to the extent necessary to permit developed contracting parties, ...”
Basic Instruments and Selected Documents, 18th Supplement, pp. 24,25.
131
Article 19 of resolution 3281(XXIX).
132
GATT, Doc. MTN/17 of 8 Nov. 1976, para. 1. in A. Yusuf, supra, n.46, p. 90.
133
Ibid..
134
J. Jackson, Legal Problems of International Economic Relations, West Publishers Co., 1986, 2nd. ed. p
1156. During these years, some countries have renewed their GSP scheme, e.g. EC renewed the 1971’s
scheme in 1980; the Us used “The Trade and Tariff Act of 1984” to replace the Title V of the Trade Act of
1974, (19 USCA (2461-2466), and renewed 1984 Act in 1993,1994 and 1995. J. Jackson, supra, 1995, p.
1131.
135
To be a beneficiary country, a developing country is required to have some basic trade abilities, and the
stronger the competitive capability they have, the more advantages will they be granted. Thus hardly can
some less developed countries share benefits from this system.
27
become a new feature of North-South economic relations since the implementation of the
GSP.
It should be said, however, that developing countries with weaker economies rely
more on the GSP than industrialised countries. Such dependence can present unexpected
dangers to vulnerable developing countries. One such danger is the remarkable uy-

Back” clause136 in the US GSP scheme, the Trade and Tariff Act of 1984. In order to
convince industrialised countries to implement the GSP, developing countries were urged
to concede the principle of self-election, authorising industrialised countries to select
eligible beneficiary developing countries with respect to the principle of generalisation.137
The GSP was finally adopted on a soft law basis, making it a voluntary undertaking on
the part of industrialised countries, not a duty. The principle of self-election therefore
gave industrialised countries an excuse to limit the scope of their obligation to grant
preferences and ask for epayment” from beneficiary countries, and the uy-Back”


clause is one of the consequences.
Under the US GSP scheme, a product may lose GSP benefits either by automatic
withdrawal of benefits according to the statutory ompetitive need” limits,138 or by the

 discretionary power to graduate an article.
President
139
These provisions are aimed to
deny GSP treatment to an eligible product when it come from a beneficiary country that is
deemed to be sufficiently competitive in the US market with respect to that particular
product to no longer need preferential treatment.140 By these withdrawal provisions GSP
benefits can be more equitably distributed to products imported from other less
competitive beneficiary countries.
According to the
 uy-Back” clause, however, the President may waive these
provisions: (1) if he receives advice from the International Trade Commission on whether
any industry in the US is likely to be adversely affected by such a waiver; (2) if he
determines that such a waiver is in the national economic interest; and (3) if he publicises
the determination described in clause (ii) in the Federal Register.
One of the
consequences of this provision is that the US President can use GSP benefits as leverage
during negotiations with beneficiary developing countries to open their markets to US
136
1984 Act ( 505(c)(3)(A)), 19 USC (2464(c)(3)(A)).
It was made in a special commission of OECD in 1969.
138
1984 Act ( 505(c)(2)(B)), 19 USC ( 2464(c)(2)(B)).
139
1984 Act ( 505(f)(2)(A)(i)&(ii)), 19 USC ( 2464(f)(2)(A)(i)&(ii)).
140
J. Jackson, supra, 1995, p. 1132.
137
28
products.
V.J. Pellegrini argued against such a negative evaluation, stating,
 his
leverage is not stated overtly as a purpose of the new criteria because the GSP is intended
merely to be a benefit, not a quid pro quo".141 Nonetheless, this implicit intention does
violate the principle of non-reciprocity. Under the buy-back clause, GSP benefits can be
granted to countries which should not receive them, if they are willing to pay for it. The
US can thus gain advantageous replacements by granting GSP benefits to unqualified
countries. These replacements sacrifice the GSP benefits that the less competitive
countries should be granted and thus destroy the benefits to developing countries of

ompetitive need” limits.
Similarly, the EC GSP scheme unilaterally use the intellectual property issue to be a
consideration of granting of GSP.142 In 1987, the Community suspend the Republic of
Korea from the list of the beneficiary countries from GSP as a retaliation against the
discriminatory treatment Community industry faces in comparison with American
industry in the field of industrial property protection. In the preamble the suspension is
justified as follows:143
Whereas the Republic of Korea does not treat the Community on an equal footing with other trade
partners and whereas it has taken discriminatory measures in respect of the Community in the
sphere of the protection of intellectual property; whereas, therefore, it is inappropriate that the
Republic of Korea should benefit from the scheme of generalised tariff preferences as long as this
situation continues.
This is clear that what have been taken into account to suspend the granting of GSP is
not the competitive ability of the Republic of Korea, but a measure of the EC commercial
policy, which is aimed at safeguarding intellectual property protection aboard.144
It can be argued that both the clauses derive from the principle of self-election: its
success lies in developing countries high degree of dependence upon GSP benefits. This
reflects the fact that the GSP scheme of either US or EC is not solely a legal system, but
also a system of political leverage. The use of GSP benefits to force trade concessions
from developing countries should be condemned as precisely the type of political
141
V. J. Pellegrini, “GSP: A System of Preferences, Not a Bargaining Lever”, Vol. 17, Law and Policy in
International Business, p. 889.
142
Case 45/86, Commission v. Council, [1987] ECR 1493.
143
Council Regualtion EEC No. 4257/88 of 19 December 1988 (O.J. 1988, L 375/1).
144
I. Govaere, “Intellectual Property Protection and Commercial Policy”, in M. Maresceau (ed.) The
European Community’s Commercial Policy after 1992: The Legal Dimension, Martnus Nijhoff, 1992, p.
203.
29
behaviour which should be forbidden by GATT, because it hampers the free-flow of
international trade.
However, since the GSP is based on soft law, the voluntary
industrialised countries may not simply take such a condemnation into account.
3.3 The Effort to Harden International Economic Soft Law
Another controversial issue relevant to the legal effect of international economic soft
law, which also reflects the opposing attitudes of North and South countries, is how to
harden soft law towards becoming a binding obligation. The issue of formulating strict
and binding rules from soft law in international economic relations is however highly
debated. 145 Scholars who oppose the concept, argue that soft law instruments are
recommendatory only. Scholars who agree with the transformation assert that there are
cases where the adoption of soft law may represent a first step towards the possible
adoption of hard law, or law in general.146 According to them, there are two approaches:
the first involves a movement from the original customary process to a formulation using
a declarative approach, while the second begins with resolutions, whose juridical scope
derives from an agreement contained in them, which then become diluted to oft law”

147
which is more programmatic than normative. In the record, these resolutions may look
like recommendations, or even a mere
oeu’, but it must be remembered that

propaganda can create pressure, that pressure can create practice and that practice can
create law.148 Since such an argument may cause a revolutionary change in the structure
of international law, it must be treated with caution both in theory and practice.149
3.3.1 Practical Development
3.3.1.1 In Domestic Courts
The attitudes of domestic courts to the above issue can be illustrated by the following
cases which show that international soft law has consequences in domestic as well as
145
Seidl-Hohenveldern, supra, 1979, n.49, 51, p. 182.
Voitovich, supra, n.191, p. 91.
147
R-J Dupuy, supra, 1977, p. 248.
148
F. Ressler, supra, n. 110, at p. 59.
149
The claim is that there has been a change in the criteria for validity in international law and its acceptance
would necessitate a reworking of the sources of international law. Chinkin, supra, p. 856.
146
30
international arenas.150 For instance, US Federal Courts have shown a surprisingly liberal
attitude towards recognising the law-making power of General Assembly resolutions.151
This was demonstrated in the case, Filartiga v. Pena-Irala.152 The second Circuit Court
he General Assembly has declared that the Charter precepts
of Appeals stated,

embodied in the Universal Declaration of Human Rights constitute basic principles of
international law”. 153 The court went on to note that,
he Universal Declaration of

Human Rights....is rather an authoritative statement of international community.”154 The
court thus demonstrated its willingness to rely on General Assembly resolutions as a
source of international law. 155 Similarly, in The Banco National de Cuba v. Chase
Manhattan Bank,156 both the Federal District Court and the Court of Appeals sought to
use resolutions as a general source of international law.157 The conclusions of these cases
and successive cases 158 may perhaps be force to motivate and stimulate world-wide
acceptance that General Assembly resolutions may contain, or be transformed into,
binding rules of international law.
3.3.1.2 In International Courts and Arbitration
In arbitration between Texaco and the Libyan Arab republic,159 Libya relied on several
UN General Assembly resolutions and contended that the resolutions had created
international law governing nationalisation.160 In analysing Libya reliance on General

150
These consequences cover both legal and non-legal norm soft law. One instance of legal soft law can be
evidenced in The Commonwealth v. Tasmania, 46, American Law Report, 1983, p. 625.
151
Ellis, supra, n. 218, at p 681. “[T]he opinions of these courts thus indicate a trend towards considerable
liberality in the use of multilateral treaties and resolutions as sources of customary international law. Even if
non-binding and contradicted by practice, these instruments may be held to generate customary rules of
law”.
152
630 F.2d 876 (2d Cir. 1980)
153
Ibid. at p. 882.
154
Ibid. at p. 883.
155
Ellis, supra, p 682. Judge Kaufman’s opinion goes on the suggest that where a resolution, “creates an
expectation of adherence and insofar as the expectation is gradually justified by State practice a declaration
may by custom become recognised as laying down rules binding upon States.”
156
505 F. Supp. 412 (S.D.N.Y. 1980).
157
See 505 F. Supp. at 431-32, 658 F. 2d at 887-888. Ellis, n. 224, at p. 682. The Court recognised that
resolutions could be controlling when it partly adopted the standard set out in one of the NIEO resolutions.
158
Ellis, n. 230, at 683. Other cases which support this view are: Fernandez v. Wilkinson, 505 F. Supp.
787(D. Kan. 1980); Lareau v. Manson, 507 F. Supp. 1177 (D. Conn. 1980); Int’l Ass’n of Machininist &
Aeropace Workers v. OPEC, 447 F. Supp. 553 (C.D. Cal 1979).
159
Texaco Overseas Petroleum Co. and California Asiatic Oil Co. v. the Government on the Libra Arab
Republic, reprinted in 17, International Legal Materials, 1978, p. 1.
160
The Libyans relied on the following resolutions: (1) Declaration on Permanent Sovereignty of 1962,
(G.A. Res. 1803); (2) Declaration on Permanent Sovereignty of 1973, (G.A. Res. 3171, 28 UN GAPR
31
Assembly resolutions, the arbitrator, R-J. Dupuy, concluded that certain General
Assembly resolutions do indeed have legal effect. He declared:
Refusal to recognise any legal validity of UN Resolutions must, however, be qualified according to
the various texts enacted by the UN. These are very different and have varying legal value, but it is
impossible to deny that the UN activities have had a significant influence on the content of
contemporary international law. 161

Likewise, Judge Jessup in the Southwest Africa Cases 162 found that repeated
condemnation of apartheid in General Assembly resolutions was of ecisive practical

and juridical value”, and expressed his opinion that General Assembly resolutions
established conclusive presumptions with regard to international law when constantly recited.163 Judge Tanaka agreed, although he concluded that a single resolution was only
verwhelming
recommendatory, while the repeated condemnation of apartheid by

majorities” established international law.164
The intention of international courts to accept soft law instruments as the opinio juris
of states was particularly clear in the decision of the International Court of Justice in the
Nicaragua case. 165 The Court held that the opinio juris of states with respect to the
prohibition against the use of force could be deduced from their attitude towards the
relevant resolutions of the General Assembly.166 Without any further evidence of states
alleged opinio juris than their acceptance of such resolutions, the Court determined that
an established principle of customary international law indeed existed.167 This conclusion
was reached despite many examples of state practice inconsistent with such resolutions
which the Court ruled were illegal breaches of the rule, rather than an indication that the
rule did not exist. As Chinkin pointed out, the Court's decision appears to indicate its
willingness to accept the transformation of soft law principles into hard law through the
Supp. (No. 30) at 52, 52 UN Doc. A/9411(1973));(3) Res. 3201(S-VI);(4) Res. 3281(XXIX). Ellis, no. 232,
at p. 683.
161
Ibid., Texaco case, p. 27.
162
1966, ICJ Report, p. 291.
163
Ibid., pp. 291-294.
164
Ibid., pp. 432-435.
165
Military and Paramilitary Activities in and Against Nicaragua (Nicaragua v. United States) (Merits)
1986, ICJ Report, p. 14.
166
Notably General Assembly resolution 2625(XXV), Declaration on Principles of International Law
Concerning Friendly Relations and Co-operation among States in accordance with the Charter of the UN,
adopted without a vote by the General Assembly, 24 Oct. 1970.
167
Nicaragua case, at para.188-194, 202-209.
32
greater recognition that General Assembly resolutions constitute a source of international
law, a move which redefines those very sources.168
3.3.2 The Theoretical Debate
From observing practice, Bothe proposes that the formation of international
obligations using soft law instruments falls into three categories:169
a) Statement of existing principles;170
b) Creation of new rules of international law;171
c) Promotion of specific programmes.172
However, his categories do not conform to the opinion of the majority of scholars. In
arguing with these categories, especially with the last two ones, scholars have made tried
to assess their theoretical inadequacy.
One of the central debates is whether soft law, and particularly the resolutions of the
UN General Assembly, can be taken as indicating the opinio juris of member states and
their intention and expectation that such resolutions will be legally binding. In arguing
against the legal effect of the General Assembly voting record as indication of opinio
juris, some scholars have claimed that since resolutions reflect political and non-legal
considerations, states who vote for them may not actually agree with them.173 In other
words, national interest and political considerations, may mean that a state
voting

performance does not reflect its real intentions. Therefore, it is unacceptable to use the
voting record as evidence of opinio juris.
168
Chinkin, p858, n. 42, for dissenting opinion see D. Amato, “Trashing Customary International Law” Vol.
81, American Journal of International Law, p. 101.
169
M. Bothe, supra, p. 77.
170
Instances are Declaration on Principles of International Law Concerning Friendly Relations and Cooperation among States,( Res. No. 2625(XXV)), Declaration on the Strengthening of International Security
(No. 2734 (XXV)) Resolution on the Question of Chemical and Biological Weapons (No.2603 (XXIV)),
and The Declaration on the Prohibition of the Use of Unclear and Thermo-Unclear Weapons (No.
1653(XVI)) M. Bothe, pp. 75,76.
171
e.g. Declaration of Legal Principles Governing the Activities of State in the Exploration and Use of Outer
Space(No. 1962(XVIII)), and Declaration of Principle Governing the Sea-Bed and the Ocean Floor , and
the Subsoil thereof , beyond the Limits of National Jurisdiction(No 2749(XXV)). ibid..
172
e.g. The Universal Declaration of Human Right (No. 217(III)) and The Declaration on the Granting of
Independence to Colonial Countries and Peoples (No. 1514(XV)) , ibid..
173
Ellis, supra, pp. 671,672. Also see I. Macgibbon, “Means for the Identification of International Law General Assembly Resolutions: Custom, Practice and Mistaken Identity”, in B. Cheng (ed.), International
Law Teaching and Practicing, Stevens, 1982, p. 10.
33
This argument in turn raises a question: can the motives of a state voting for a
resolution be used as an excuse to release it from the legal obligation established in that
vote? M. Akehurst presents two examples to resolve this issue. Firstly, state A may
think that state B action is contrary to international law but may refrain from protesting

because it does not want to jeopardise the conclusion of a trade agreement with state B.
Secondly state A may vote for a draft resolution tabled by state B in the General
Assembly asserting that something is a rule of international law, not because state A
agrees with the statement in the resolution but because it wishes to curry favour with state
B. Akehurst considers that in such cases state A must be treated as if it shared state B

views on the legal issue involved. What counts is what state A says or refrains from
saying in public, not what state A secretly believes. Thus the motives of states are
irrelevant.174
Customary international law is not created by inertia, but by evidence of the actual
belief of the state concerned that a certain action is required by international law. Such
evidence is lacking when a state fails to vote in favour of the resolution concerned.175 It is
further argued that the binding character of customary law should result from the general
consensus of states. 176 However, whether the intentions of resolutions are implied,
expressed by their wording, and recognised by great number of states, the above
mentioned limitation means that theoretically such resolutions cannot be imposed on a
persistent objector.177
However, this limitation is not upheld in practice. The judgement in the North Sea
Continental Shelf case178 stated that state practice hould show a general recognition that

a rule of law or legal obligations is involved”, indicating that the opinio juris has to be
generally held, but does not need to be held by every state.179 Furthermore, Resolution
1653 (XVI), the esolution on Prohibition of the Use of Nuclear Weapons for War

Purpose”, which was adopted by 55 votes to 20 with 26 abstentions, is already regarded
Thus the existence of objectors does not
as an important aw-making’ resolution.
180
174
Akehurst, supra, p. 39.
I. Seidl-Hohenveldern , supra, 1979, p. 191.
176
M.E. Villiger, Customary International Law and Treaties, Martinus Nijhoff, 1985, p. 27.
177
I. Seidl-Hohenveldern, supra, 1979, p. 191.
178
ICJ Reports, 1969, 43, para 74.
179
Villiger, supra, pp. 26, 27.
180
Brownlie, supra, p. 14.
175
34
always effectively prevent resolutions from being considered as manifestations of the
opinio juris of states.
Opponents continue to assert that resolutions can only be considered as the opinio
juris of states who agreed to them.181 It seems quite reasonable that the legal effect of
resolutions cannot be applied to non-parties who did not give their consent to such
resolutions. However, according to the statements made in the North Sea Continental
Shelf case mentioned above, it should be concluded that the existence of non-parties to a
resolution is insufficient to convince that the legal effect of resolutions could not be
referred to as opinio juris of the parties.
The final dispute focuses on the binding power of resolutions on new states. Scholars
observe that those who tend to purport resolutions as opinio juris may rely heavily on the
voluntarist theory that states are bound by resolutions if they want to be bound or if they
express their wish to be bound.182 This theory, therefore, should not be applied to new
states since they cannot express their willingness promptly. However, with regard to
traditional theory in international law, new states are bound automatically by all rules of
customary law in existence at the time when they become independence, and the
international community does not seek to reform existed rules whenever a new state is
established. Moreover, in voluntarist theory, states can
pt out’ of a rule of customary

law by dissenting only before the rule is well established, but not afterwards.183 In order
to maintain the stability of the international legal system, new states should not resist
existed customary law, unless such legal rules may damage or have damaged their rights.
This discussion makes it quite clear that there is not yet a theory on the law-making
effect of international economic soft law that is broadly acceptable to all scholars. The
issue, therefore, deserves further investigation.
181
T. Gruchalla-Wesierski, supra, p. 54.
Mendelson, supra, p. 100.
183
Unfortunately for new states, most rules of customary were well established before the states concerned
become independent; independence came too late for them to dissent. Akehurst, ibid., pp. 27-28.
182
35
General Conclusion
It can be concluded that the use of international economic soft law has stimulated the
development of international economic law to address various issues in North-South
economic relations, which may not be achieved only by traditional international lawmaking process. Accordingly, the existence of soft law also urges us to re-evaluate the
general international law-making process and, in doing so, illuminates the difficulty of
explaining this phenomenon by referring solely to the classical theory of formal sources
of public international law.184 However, on the grounds of the economic gaps between the
countries of the North and South are gradually bridged, it is likely to say that international
economic soft law will be the subject of less attention.
Nevertheless, the broad
application of soft law instruments in the fields of other branches of international law,
inter alia, international environmental law185 in recent years not only confirms the legal
effect of soft law to address the highly conflicting issues in various subjects, but also
illustrates that the significance of soft law to promote the further development of
international legal system will increasingly evolve and deserve further observation.
In addition, according to no theory has as yet created a model to successfully harden
soft law, and binding rules are increasingly required in new subjects areas, the matter to
harden soft law instruments must continue to be debated and in the future a theory based
on both theoretical and practical developments in relevant areas may emerge. However,
bearing in mind Mendelson warning,186 f every act a state performed created a legal


obligation it would act at its peril, which would be somewhat inconsistent with the notion
of state sovereignty and would inhibit states from making concessions to other states
through fear of creating binding legal obligations for the future,”187 it is clear that not all
kinds of soft law instruments can be hardened, and, moreover, it must be hardened only in
limited circumstances and with caution.
184
P.M.Dupuy, “Soft Law and the International Law of the Environment”, Vol. 12, Michigan Journal of
International Law, 1991, p. 435.
185
For further information, please see generally, P. Sands, Principles of International Environmental Law,
Manchester University Press, 1995; and P. W. Birnie, A. E. Boyle, Internatioanal Law and the
Environment, Clarendon Press, Oxford, 1992, pp. 26-30. and P.M. Dupuy, ibid..
186
Mendelson supra, p.101.
187
Similar approach can be seen in D’Amato’s words, “If voting for a UN resolution means investing it with
opinio juris,...one may simply apply the UN resolution as it is and mislabel it customary law”. D’Amato, ,
supra, p. 101.
36
The final obstacle to making international economic soft law legally effective are the
political concerns derived from the conflict of national interests between the North and
South countries. Some soft law instruments have been devaluated, more or less, by such
political concerns which transformed them into political leverage in the hands of some
countries. It is therefore unlikely that the legal effect of international economic soft law
will be maximised unless both sides agree to a considerable reduction of their present
maximum demands.