SUBJECT: December 16, 1987 ALD Constitutional Questions In Re Canada-U.S. Trade Pact In response to your inquiry we forward a report addressing the constitutional questions raised by the recent agreement with Canada for a free trade zone. (221) ralees Keller Johnny H? Killian Senior Specialist & American Constitutional Law Possible Constitutional Objections Canada-United States Trade Agreement Canada and the United States have entered into a binational trade agreement which Congress will presently be called upon to implement. One aspect of the agreement calls for final determination of antidumping and countervailing duty complaints by ad hoc bilateral panels composed of nationals of both countries. Adoption of this dispute resolution device implicates several provisions of the United States Constitution and has raised questions whether the procedures agreed upon may permissibly be implemented and followed. It is the purpose of this report to evaluate the three critical constitutional questions that are raised. The conclusion of the report is that under established interpretations of constitutional provisions and doctrinal understandings no constitutional barriers appear to stand in the way of implementing the agreement. The Agreement Under existing United States law, the laws relating to antidumping, that is, international price discrimination, and countervailing duties, that is, subsidization of exporting industries, are administered through a complex system under which both the Department of Commerce and the International Trade Commission play integral roles. Review of final antidumping duty orders and final countervailing duty orders may be had first in the Court of International Trade, an Article I tribunal, and then appeals from this court may be carried to the Court of Appeals for the Federal Circuit, with review of CRS-2 the latter court's decision possible in the Supreme Court upon petitions of certiorari. The binational agreement would substitute for judicial review in the present system a review by panels composed of five members, two appointed by each party from an agreed roster of panelists in consultation with the other party. The fifth panelist would be chosen by the parties, by the four panelists, or by lot from the roster, in that order of resolution. At either party's request, the panel would review final orders under antidumping or countervailing duty laws to determine if the administrative process of either party had reached a decision not in accordance with its laws. The panel decision would be binding on the parties and enforceable under their laws. In reaching its determination, the panel is to apply the appropriate standard of judicial review applicable under the domestic law of the party being reviewed. The Constitutional Arguments Three constitutional objections appear to be facially arguable. (1) It may be contended that the arrangement would violate the appointments clause of the Constitution. This provision gives the President the power to appoint "Officers of the United States" by and with the advice and consent of the Senate when the offices to be filled have been established by law and the appointments to them have not otherwise been provided for in the Constitution; Congress is given the discretion by law to vest the appointment of "inferior Officers," i.e., those established by law rather than by the Constitution in the President alone, in the courts, or in the heads of departments. Officers of the United States are those who exercise significant authority pursuant to the laws of the United States and they may be appointed to office only in accordance with the CRS-3 appointments clause. Buckley v. Valeo, 424 U.S. 1, 109-143 (1976). While the clause applies to Supreme Court Justices and to the lower federal court judges, who must thus be appointed in accordance with the clause, it is with respect to officers who "execute" the laws of the United States that a corpus of precedent has been built up. Inasmuch as the binational panelists are not Article III judges, the argument would be that since the panelists purport to interpret and to apply United States law, they must be in the Executive Branch of the United States Government and subject to appointment either by the President or by one of the alternative means set out in the clause. Bowsher v. Synar, 106 S. Ct. 3181 (1986); Myers v. United States, 272 U.S. 52 (1926). That is, the separation of powers and checks and balances doctrines undergirding the division of authority in the Constitution have been construed to mean the power of executing the laws of the United States rests solely in the President, because of the vesting of the "executive power" in him by Article II, sec. 1, cl. 1, and the imposition of the obligation upon him to "take Care that the Laws be faithfully executed." Article II, sec. 3. Thus, Congress may not exercise the power of appointing persons who execute or share in the execution of the laws, Buckley v. Valeo, supra, nor may it vest executive authority in an officer who, though appointed by the President, is subject to removal by action of Congress, Bowsher v. Synar, supra, nor may it restrict the power of the President to remove officers who exercise purely executive functions. Myers v. United States, supra. See Humphrey's Executor v. United States, 295 U.S. 602 (1935) (Congress may limit removal of FTC commissioner who exercises "quasi" legislative and judicial functions as well as executive). The panelists are not appointed in accordance with the appointments |