NEW YORK UNIVERSITY A private university in the public service School of Law 40 WASHINGTON SQUARE SOUTH NEW YORK, NY 10012 U.S.A. TELEPHONE: (212) 998-6208 Andreas F. Lowenfeld Charles L. Denison Professor of Law Hon. Robert W. Kastenmeier Chairman Subcommittee on Courts, Civil Liberties and Re: April 11, 1988 Canada-United States Free Trade Agreement Dear Mr. Chairman: I write in response to your invitation to give you my views on the constitutionality of Articles 1901-1911 of the proposed Canada-United States Free Trade Agreement, which provide for review by a bi-national commission of decisions by departments or agencies of each party in certain unfair trade cases. I have had the opportunity to read some of the comments on this question from persons with expertise in United States constitutional law, federal jurisdiction, customs law and practice, and administrative law. My own perspective is primarily that of about and taught in the field of international trade law for many years. I have also had occasion to address the constitutional aspects of participation by the someone who has written Hon. Robert W. -2 April 11, 1988 United States in the international economy, both as a member of the Office of Legal Adviser in the U.S. Department of State (1961-66), and more recently as an Associate Reporter for the forthcoming Restatement (Third) of the Foreign Relations Law of the United States. use of a My overall conclusion is that there is no constitutional impediment to adoption through the legislative process of the Canada-United States Free Trade Agreement, and in particular Chapter Nineteen thereof. Replying directly to the questions raised in your letter, I believe that decisions of the Department of Commerce or the U.S. International Trade Commission in antidumping and countervailing duty cases need not be subject to judicial review by a United States court established under Article III of the Constitution; I believe that the binational panel to review decisions of the Department of Commerce or the International Trade Commission does not violate the Appointments Clause, Article II, $2, cl. 2 of the Constitution; I believe that the use of a binational panel in the circumstances provided does not represent an unconstitutional delegation of legislative power; and I believe that the Agreement does not contravene constitutional principles of separation of powers. While some aspects of the Agreement are unique, I believe that overall it fits within the traditions of the foreign relations law of the United States, both with respect to disputes settlement and with respect to legislation concerning Hon. Robert W. -3 April 11, 1988 I. Chapter Nineteen of the Agreement Chapter Nineteen of the Agreement, entitled "Binational Panel Dispute Settlement in Antidumping and Countervailing Duty Cases," is not easy to understand, and it may be useful to set out my understanding of the principal provisions. 1. Effect on Internal Law The Agreement requires no change in either party's internal law (other than in regard to judicial review) concerning imports of goods alleged to be dumped or to be beneficiaries of subsidies.1 (Article 1902). While each country is a party to the International Anti-Dumping Code2 and the Agreement on Subsidies and Countervailing Duties, 3 both negotiated in the Tokyo Round of Multilateral Trade Negotiations (MTN), the law and practice of the two countries differ in detail. Evidently the effort to harmonize the laws of the two states was abandoned or postponed in the course of negotiating the Free Trade Agreement (see Articles 1906-07), in favor of the unique procedural provisions contained in Chapter Nineteen of the Agreement. 2. Effect on Existing Procedures 1 Canada: Special Import Measures Act, Stat. Can. 1984, c. 25; United States: Tariff Act of 1930 as amended, §§701-707; 731740; 751; 771-778; 19 U.S.C. §§1671-1671f; 1673-16731; 1675, 1677-1677g. 2 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, 31 U.S.T. 4919; TIAS 9650 (1979). 3 Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade, Hon. Robert W. Kastenmeier April 11, 1988 The assumption underlying the Agreement is that each country will maintain its existing procedures for administering its antidumping and countervailing duty laws, which for both countries are divided between an agency of the executive branch and an independent regulatory agency. However, for imports from one country to the other subjected to antidumping or countervailing duty proceedings, any legal challenge to final determinations of these bodies (Department of Commerce and the Trade Commission for the United States, Revenue Canada (technically the Deputy Minister of National Revenue for Customs and Excise) and the Canadian Import Tribunal for Canada) is to be addressed not to the respective country's courts, but to an ad hoc panel of five persons selected from a previously created roster of 50 persons familiar with international trade law. Article 1904. (See Annex 1901.2 for the procedures for selecting members of the panel). U.S. International 3. Effect on Changes in Existing Law independent While each country reserves the right to amend its antidumping or countervailing duty law, if an amendment would apply to goods from the other country, the country contemplating the amendment must give advance notification to the other country and on request must consult with the other country prior to enactment of the amending statute. If the other country maintains that the proposed amendment would be inconsistent with prior decisions of a panel convened under the Agreement, or that the amendment would contravene the GATT, the Anti-Dumping Code, |