Analysis and recommendations for organizational and legal mechanisms for the regulation of international trade

Abstract

This study is devoted to a comprehensive theoretical and empirical analysis of the organizational and legal mechanisms for regulating international trade in a globalized economy. Particular attention is paid to determining the role of key international institutions, such as the World Trade Organization (WTO), the United Nations Conference on Trade and Development (UNCTAD), the International Chamber of Commerce (ICC), as well as regional integration associations that form the modern architecture of the world trade system. Their impact on the unification of rules, harmonization of national legislative bases and reduction of trade barriers is analyzed. Additionally, the national legislation of individual states and its compliance with international standards are considered. The study assesses the main economic factors that determine Azerbaijan's foreign trade: import volumes, GDP dynamics, exchange rate fluctuations, foreign direct investment (FDI) inflows, changes in world oil prices and the level of customs tariffs. To verify the relationships between these factors, an empirical model based on panel data for 2010–2024 was used. The panel regression method with fixed effects was chosen, the adequacy of which was confirmed by the Hausman test. The results showed that imports are the strongest factor influencing foreign trade turnover: a 1% increase in imports leads to an increase in trade volume by 0.87%. Gross domestic product and foreign direct investment have a positive and statistically significant effect, which indicates their key role in stimulating international trade relations. At the same time, the exchange rate and customs tariffs have a negative impact, reducing export competitiveness and complicating access to foreign markets. In addition, it was found that a favorable trade policy, reflected in the form of a dummy variable, significantly increases trade turnover. World oil prices, taking into account the energy dependence of the Azerbaijani economy, also showed a statistically significant impact. The obtained value of the coefficient of determination R²=0.78 confirms the high explanatory power of the model, which allows us to consider it suitable for predicting future trends in the field of foreign trade. As a result, the study proves that the combination of liberal trade policy, deep customs reforms and maintaining macroeconomic stability creates favorable conditions for the effective integration of Azerbaijan into the international trade system. The results can be used both in scientific research and in the practice of state regulation, in particular for improving foreign economic policy strategies, optimizing the legislative framework and forming a more flexible model of cooperation with international economic institutions.