NEW YORK UNIVERSITY A private university in the public service School of Law 40 WASHINGTON SQUARE SOUTH NEW YORK NY 10012 654 TELEPHONE (212) 998-6208 Andreas F. Lowenfeld Charles L Denison Professor of Law May 23, 1988 Senator Joseph R. Biden, Jr. Chairman Committee on the Judiciary United States Senate 224 Dirksen Senate Office Building Washington, D.C. 20510 Dear Mr. Chairman: I write in response to a list of questions submitted to me at the close of the hearing of May 20, 1988 on the binational dispute mechanism contained in the proposed U.S.-Canada Free Trade Agreement. He I. Sen. De Concini questions my suggestion that the binational panel would reduce the political aspect of trade disputes. assumes that I refer to the current judicial review as the political arena. With respect, that is a misunderstanding of my testimony. First, at pages 21-22 of my prepared statement and particularly at footnote 22, I was referring to debates about legislative proposals in which opponents and proponents of particular amendments assert that they are "GATT-illegal" or "GATT-legal," and not infrequently tailor their legal arguments to fit the position advocated on policy grounds. The panels functioning under Article 1903, i.e., in the advisory or declaratory function, would, in my view be able to give unbiased, judicial opinions on the conformity of legislative proposals with the FTA, the GATT, or the Anti-Dumping or Subsidy Code. - - at least I Second, and more generally, I believe the procedure in antidumping and particularly in anti-subsidy cases important ones is rarely confined to a legal, non political arena. I was not, of course, suggesting that Article III judges, or indeed other judges, are "political," or lack independence. was suggesting that a wholly unilateral procedure does not prevent another country from raising the issues at political level. Witness the massive antidumping and subsidy cases brought against the steel producers from the European Community in 198182, which ended up in high level negotiations and a series of agreements between the United States and the Community.1 Or witness the antidumping actions brought by U.S. semi-conductor companies against Japanese firms in 1985-86, which, again, ended up not in final adjudication by the Court of International Trade on appeal from decisions of U.S. administrative agencies but in a politically negotiated agreement which in turn has had its ups 1 For a description of this episode, see my book A. Lowenfeld, Public Controls on International Trade pp. 420-49 and Documents Supplement DS-633-646, (2d. ed. 1983). and downs. 2 The suggestion is that with a binational dispute settlement procedure, such disputes can be confined to legal issues more easily than decisions by the administrative and judicial organs of only one nation. To repeat, I am not suggesting that a binational panel would be more independent than U.S. Article III judges; I am suggesting that the decisions of a binational panel also independent - could be expected to win more acceptance in a foreign country, and thus to put an end to legal disputes before they give rise to political controversy. II. Senator Hatch asks two questions: How can the "judicial power" of the United States can be assigned to a binational panel that lacks some of the security that attaches to Article III judges? I do not regard the function of the panel as exercising the judicial power of the United States. As I have discussed in my prepared statement (pp. 19-21), it would be a mistake, in my judgment, to attempt to fit the panel into a category of "officers of the United States." The panel would be an international body, created pursuant to an international agreement. As to the implication in the question that independence and the ability to grant due process depend on the criteria by which 2 See, e.g., Pres. Reagan's statements, 22 Weekly Comp. Pres. Docs. 1020 (Aug. 4, 1986); 25 Int'l Leg. Mats. 1409-28 (1986). Article III judges are defined, I would point out that more than half the judges of State courts in the United States (including, I believe, Senator Heflin when he was Chief Justice of Alabama) are elected; it has not been suggested that they cannot grant due process, or indeed decide matters of federal law. 2. Would the FTA conflict with the Seventh Amendment quaranty of the right to trial by jury? With all respects, I do not understand this question. The binational panels are assigned an appellate review function, not a trial function, so that the issue of jury trial does not arise. Moreover, antidumping and countervailing duty proceedings, being special duty cases, are far from the suits at common law to which the Seventh Amendment is addressed, and of course they are not tried to juries today. The whole of administrative law would have to be revised if it were ever concluded that litigants challenging all governmental action were entitled to trial by jury. III. Senator Heflin asks three questions. 1. What are the implications of the position of the Office of Legal Counsel on the relation of international obligations to domestic law? As I stated at the hearing, I found Mr. McGinnis' testimony on behalf of the Justice Department astonishing, and quite unsound. There is of course a distinction between obligations of the United States at international law and requirements of U.S. law. Thus if Congress passes a law that cannot be reconciled with a prior international obligation, the subsequent law will be given effect, even if it is expressly recognized as contrary to international law. See, e.g., Diggs v. Shultz, 470 F.2d 461 (D.C. Cir. 1972), cert. denied, 411 U.S. 931 (1973), upholding the effectiveness of the so-called Byrd Amendment that required the United States to import chrome and related products from Rhodesia, notwithstanding comprehensive sanctions against Rhodesia required by a binding resolution of the United Nations Security Council pursuant to the U.N. Charter. See also Restatement (Third) of the Foreign Relations Law of the United States $115 (1987). But that is wholly different from saying Congress cannot by statute require the President to carry out.an international obligation. There has been much writing and much confusion about selfexecuting or non-self-executing treaties, the difference being that the latter require for certain purposes that Congress enact implementing legislation. When an international agreement is concluded as a Congressional-executive agreement, as the FTA will be, the legislative approval is the implementing legislation. Thus both the agreement and the implementing legislation are the law of the land, and the idea that the Commerce Department or the International Trade Commission or the President cannot by such legislation be required to take specified action is just plain wrong. There are simply hundreds of tax treaties, FCN treaties, consular conventions, arbitration conventions, etc., etc., which |