On Conflict Of Laws In China Foreign Trade Agency System

Conflict of laws is general, but conflict of laws on China foreign trade agency system is unique during the period of economic transformation. The study with cost-benefit approach based on Economics Analysis of Law will promote growth of China's foreign trade system. Economics Analysis of Law, based on scarcity assumption, rational person assumption, economic maximum assumption, regards efficiency as basic value and appraisal standard and declares that legislation, enforcement and judicature should contribute to efficient distribution of social resource, increase social wealth and reduce social cost. Agency system, originated from the west, has many economic functions: specializing divisions, promoting dimension efficiency, reducing transaction cost. However, the conflicts reduce the value of foreign trade agency system. The major conflicts of laws in China Foreign Trade Agency system are as follows: the conflict between General Rules of Civil Law (hereinafter as GRCL)and Interim Provisions for the Foreign Trade Agency System (hereinafter as Interim Provisions); that between GRCL and Foreign Trade Law (1994); that between Contract Law and Interim Provisions and that between GRCL and Contract Law. The followings should be responsible for the conflicts: different legislative subjects and ideas; defect of legislative technology; absence of effective inspective system; interleaving of different systems. The conflicts have passive effects, such as breaking down the uniform of legal system; declining functions of laws; increasing transaction costs; providing the possibility of corruption; leading to opportunism acts, hindering the spread of agency system. The positive effects of the conflicts are as followings: They are causes of legal transformation; source of right protection; chance of source redistribution. Our aim is to get rid of the unnecessary conflicts, to set up a solution system. So after the conflicts of laws in foreign trade agency system, the reasons and the effects have been disclosed, the following countermeasures are provided .1.In the application of law, authentic levels principle should be obeyed. According to the principle, GRCL and Contract Law are prior to Interim Provisions; GRCL is prior to both Contract Law and Foreign Trade Law. The judge should put the individual into a whole background, approaching a prior distribution of resource, as abided by rule of law. Then we can regard Contract Law prior to GPCL, because Contract Law is more reasonable by accepting unnamed principal agency and undisclosed principal agency. 2. Solutions will be necessary to get ride of the conflicts.All these will be helpful such as to repeal the foreign trade agency approval system; to perfect legislation of foreign trade agency and to accede to Convention on Agency in the International Sale of Goods. Under Foreign Trade Law(1994), farmers and tiny enterprises which produce agricultural products have to make transaction by agent because they have no qualification to engage in foreign trade. This leads to segregation between domestic trade and international trade. Under the monopoly system, grain enterprises make transactions countering the market by seeking maximum benefit themselves, which lead to the failure of government's foreign trade control. All these have proved a fact that the foreign trade agency approval system is unfair and inefficient. With the approaching foreign trade qualification registration, farmers have the freedom to choose direct deal, indirect deal and foreign trade agency to import their products. In fact the farmers have no enough ability to make direct deal by the restrain of institution and scale, so foreign trade agency fits for the agricultural products trade. The spoiled benefit leads agent's anti-named-principal-agency, as it is difficult to keep the transaction information secret under named principal agency. On the other hand, agency can produce cost itself, the fact that farmers will choose agency or not is determined by cost-profit analysis. So the...