dent for denying citizens their rights to judicial review with regard to other customs matters? We are told that this particular provision of the agreement is so integral that it cannot be divorced from the agreement without losing the entire agreement. It is hard for us to believe that this is so important to the Canadians that they would give up all the economic benefits, which we understand the agreement has, if they were asked to agree to the withdrawal of the dispute settlement provisions. There have already been indications of Canadian agreement to "renegotiate the agreement" per letter to Senator Bentsen from the Canadian Apparel Fur Sectoral Advisory Group on International Trade, reported in "Inside U.S. Trade", April 15, 1988. As we understand it, Canada basically asked to be exempted from the provisions of the countervailing duty and antidumping law statutes, or at least not be subject to the administrative procedures of the International Trade Administration and the International Trade Commission. We also understand that we gave no response to Canada on this request for some 19 months, until near the end of the negotiations. Then we proposed as a substitute for what the Canadians asked for that there should be established this binational dispute settlement panel for the next five or seven years, while there is to be discussion as to whether an agreement can be reached for a change in the treatment of subsidies and dumping between Canada and the United States. Given the fact that Canadian cases really represent a relatively small number of litigation in this area, and the fact that the Canadians are not really complaining about the treatment they have received at the hands of our trade courts, one is left with the concern as to whether this proposal has been put forth by the administrative agencies who have never liked judicial review for the purpose of establishing a precedent. Let me quote briefly from an article written by then General Counsel and Deputy General Counsel for the U.S. Trade Representative Alan F. Holmer and Judith Hippler Bello, from the fall, 1987 issue of "The International Lawyer", writing on the “ The U.S.-Canadian lumber agreement; past as prologue:" "The litigation spawned by the 1983 Commerce decisions on natural resources demonstrates the importance and effectiveness of the substantially increased judicial review provisions enacted by the Congress in 1979. Congress intended to provide more opportunities for judicial review, in large part as a check on the executive branch discretion in administering the countervailing duty and antidumping laws. Recently the courts have played a significant role in shaping the course of the CVD law. At least theoretically, this should reduce the pressure that disappointed U.S. petitioners attempted to apply to the Congress to amend the law whenever Commerce makes any determination adverse to their interests." There is no reason in policy why a binational panel should be created. The countervailing duty and antidumping statutes contained in Title VII of the Tariff Act of 1930, as amended, already contain provisions for the settlement of disputes by agreement or undertakings. If the Canadian Government and the United States executive branch are interested in settling these matters in a rational, political manner, rather than in engaging in full adminis trative proceedings and court review, it is these provisions which should be expanded. They could be used to suspend or end any dumping or countervailing duty cases. If during the progress of the matter at the administrative level the Governments can work out an agreement, then the matter will end administratively. An example of where this happened just this past January was in the antidumping investigation on potassium chloride from Canada, where the Federal Register of January 19, 1988 notes the entering into an agreement between the Department of Commerce and Canada, the effect of which is to suspend the antidumping investigation. If these provisions need revamping to facilitate their utilization, then that is what the Administration should work at. Further, if the Canadian Government and U.S. executive branch are of the opinion that certain programs carried on by either should not give rise to countervailing duty measures, they may undertake separate bargaining on those programs under exceptions to the GATT providing for regional agreements. If they can reach such an agreement, it would be perfectly permissible for the Executive to approach Congress with a measure enacting that such Canadian programs as were determined should not be deemed to confer bounties or grants and not be subject to petitions for the imposition of countervailing duties at the administrative level. Congress would, of course, want to know what U.S. programs the Canadian Government had recognized in return. In this manner, Congress could be assured of a real quid pro quo in this area, weigh the competing national interests, and not leave the executive branch free, through a binational panel, to resolve these questions on an ad" hoc basis. The foregoing demonstrates, we believe, why congressional acquiescence to the binational dispute settlement provision of the Free Trade Agreement would be bad national policy, even without consideration of the constitutional issues involved. Foreign trade negotiators should not presume that they have the authority to bargain away the jurisdiction of courts of the United States when negotiating trade agreements. I will now treat rather briefly the constitutional objections which undergird our opposition to the dispute settlement provisions of the FTA as they are more extensively set forth in our statement submitted to the committee, which I understand will be made a part of the record. One, the binational panel would violate Article III of the Constitution in that it is an attempt to give to the binational panel powers belonging properly to the courts of the United States. The question raised in customs litigation, including dumping and countervailing duty cases, which can result in the eventual assessment of additional duties, are judicial in nature and their resolution by a nonjudicial, non-United States body not only violates the tripartite nature of our governmental system, but denies the importer citizen the protection afforded by an impartial and independent judiciary. As drafted, the dispute settlement provision effectively divests all courts of the United States of jurisdiction over dumping and countervailing duty cases involving Canadian merchandise, as the decisions of the binational panel are not subject to review by any court in the United States. Some commentators have suggested that the Supreme Court at least be vested with the jurisdiction to consider constitutional questions. We do not believe that that alone would overcome the objections, as we believe it is essential that an importer have the right to have the correctness of his duty assessments, and the decisions a part thereof, reviewed in a court of law which is ultimately subject to review by the Supreme Court. The absence of such safeguards available to our citizens from the beginning of this republic, and under the common law of England, we submit results in the taking of an importer's property without due process of law in violation of the Constitution. I would also comment, Mr. Chairman, in regard to the suggestion that judges be appointed to the panel. Apart from the other questions that would arise, that really misses the point. That would not make the binational panel a court. That would also not permit review of the decisions of that binational panel by a court of the United States. When the CIT decides a case and someone is unhappy with it, they have review to the CAFC and from there the possibility of a writ. So permitting judges to sit on the panels will not take care of the denial of due process and denial of judicial review. That doesn't take care of that issue. e also submit that adoption of the binational disputes resolution panel would result in unequal protection of the laws. We have spelled out in our statement the unequal protection which importers from Canada would receive from our laws as regards competitors who import from other countries and have access to the courts. We have also pointed out the problems which occur where a product is imported from more than one country and a final determination as to injury will be based on cumulation, with apparently the binational panel getting the aspect of the case involving Canada and the courts the remaining portions of the case. Let me point out one other problem. How is an American petitioner going to feel when he takes the matter to the binational panel? An importer loses and takes it to the binational panel, and he knows his Government is going to be against him and it's going to support the decision of the ITA or the ITC. But the Canadians will support him. Who is going to support the American petitioner? Not his Government, who is going to be interested in upholding the decision of the ITA and the ITC, and not the Canadian Government, who certainly doesn't want the petitioner to prevail. What sense of equality or fair treatment is the American petitioner going to have in such a circumstance. We know of no precedent for a binational panel depriving a citizen of the United States of a suit against the United States in the application of domestic legislation. The precedents cited by proponents of Article 19 of the FTA deal with settlement of boundary disputes between nations or claims of our citizens against foreign governments. Those do not support this proposal, whereby the United States would statutorily agree to force its citizens or those entitled to protection of its laws to go to a binational panel to construe United States laws and Federal agencies' actions with the ultimate determination of those rights or obligations under United States statutes in that binational panel. In summary, we believe this right to judicial review, which so easily and unnecessarily was bargained away, is so essential a right that Congress should make it clear that its approval of the FTA is conditioned on the elimination of Chapter 19. Finally, I would ask that the committee include in its record a statement in opposition to this section that will be forthcoming from the Federal Circuit Bar Association, adopted at its board of directors meeting within the past month. It is being sent to the appropriate committees of the House. Thank you, Mr. Chairman. [The statement of Andrew P. Vance, with attachment, follows:] STATEMENT BEFORE THE HOUSE JUDICIARY SUBCOMMITTEE ON I AM ANDREW P. VANCE, CHAIRMAN OF THE TRIAL AND APPELLATE PRACTICE COMMITTEE OF THE CUSTOMS AND INTERNATIONAL TRADE BAR ASSOCIATION, CITBA. CITBA IS A NATIONAL PROFESSIONAL ASSOCIATION OF LAWYERS WHO PRACTICE BEFORE THE UNITED STATES COURT OF INTERNATIONAL TRADE (CIT) AND THE COURT OF APPEALS FOR THE FEDERAL CIRCUIT (CAFC). CITBA CURRENTLY HAS OVER 300 MEMBERS FROM 19 STATES AND THE DISTRICT OF COLUMBIA. IT IS THE SUCCESSOR TO THE ASSOCIATION OF THE CUSTOMS BAR, WHICH WAS FOUNDED IN THE LATE 1920S. CITBA AND ITS PREDECESSOR HAVE OFFERED OPINIONS TO CONGRESS, PARTICULARLY TO THIS COMMITTEE, ON MEASURES EFFECTING THE UNITED STATES CUSTOMS COURT, THE UNITED STATES COURT OF CUSTOMS AND PATENT APPEALS, AND THEIR SUCCESSORS, THE CIT AND THE CAFC, AND ON CERTAIN TRADE MEASURES FOR OVER A HALF-CENTURY. CITBA IS NOT OPPOSED TO A FREE TRADE AREA AGREEMENT WITH CANADA. HOWEVER, IT VIGOROUSLY OPPOSES THE DISPUTE SETTLEMENT PROVISIONS OF THE PROPOSED FREE TRADE AGREEMENT IN THAT IT WITHDRAWS JUDICIAL REVIEW IN COUNTERVAILING AND ANTIDUMPING MATTERS FROM THE UNITED STATES COURTS AND VESTS IT IN A FIVE MEMBER BINATIONAL PANEL CREATED ON AN AD HOC SITUATION. WHILE WE BELIEVE THAT THE DENIAL OF JUDICIAL REVIEW TO U.S. CITIZENS OF DECISIONS THAT EFFECTIVELY DETERMINE THE AMOUNT OF DUTIES WHICH THEY WILL PAY TO THE UNITED STATES IS A VIOLATION OF THEIR CONSTITUTIONAL RIGHTS, AS I WILL DEVELOP LATER, THERE IS THE UNDERLYING QUESTION OF |