Modern International Trade and the Significance of the CISG


Today, unifying of business laws on a transnational level has become an essential necessity rather than a mere objective when due regard is given to the immense growth in the international business transactions, with players spread all around the world. Just to illustrate the enormity of the increase in the volume of international dealings; one may take Turkey as an example where the statistics reveal that the volume of foreign trade has grown significantly over the last decades. Such that, the amount of foreign trade which was only around $ 137.5 Million USD in 1923 has grown into almost $ 11 Billion USD in 1980. Said number had continued to vastly escalate; adding up to around $ 35 Billion USD in 1990 and to almost $ 400 Billion USD in 2014.The numbers expose the truth: the world of business has never been as rapidly-growing and international as it is today. Hence, it was questionable, whether or not; the laws have been able to catch up with that speed and internationalism. 

Indeed in the 19th century, the present conflict of laws methods were inadequate to tackle complex issues born out of international sale of goods contracts. Additionally, large number of national systems, at that time, presented obsoleteness, incompleteness and inadequacy to address international business dealings, as they were designed to govern pre-industrial economy and not the “new emerging economy and commercial traffic based on the sale of complex manufactured industrial goods that needed to be transported to distant places, that resort to also to ancillary transactions such as financing payment arrangements, insurance, transport contracts and guarantees

When the dramatic change between the business yesterday and the business today is taken into consideration, it is clearly seen that each step taken towards achieving a unified codification on the international business law is of paramount importance in terms of providing parties a neutral, familiar and most importantly efficient legal infrastructure where they can safely carry out their transactions. In such a legal environment, business people can find the opportunity to focus on the business itself, instead of losing unnecessary amount of time trying to find an effective legal framework according to which both parties can feel confident to do business. Exactly this goal in mind, the CISG was put in action.  

Today the CISG enjoys a significant amount of recognition and success. According to the World Trade Organization (hereinafter “WTO”) statistics, the world’s top six merchandise trader countries; USA, China, Germany, Japan, France and Netherlands, are all Signatories to the CISG; together with 77 other nations including Turkey; which embodies over two thirds of international trade in goods, representing a significant economic, geographic and cultural diversity.