question which must be addressed and resolved in the implementation of the FTA. Finally, there could be a risk that a separate body of jurisprudence would arise, evolving from the determinations of the binational panels applying the two distinct bodies of U.S. and Canadian domestic law. The panels' determinations might give rise to decisions perhaps in conflict with the judicial pronouncements of the two nations' trade courts. This risk might be minimized by assignment of present or former U.S. judges of the Court of International Trade as members of the binational panels, but other ways should be sought to reinforce the FTA's requirement that the two nations' existing laws be applied unless and until there are further agreements on substantive changes. v. Conclusion The New York State Bar Association's Section of International Law and Practice applauds the efforts of the negotiators of the FTA and looks forward to further discussion of ways in which concerns with its dispute resolution mechanisms might be addressed. March 18, 1988 THE UNITED STATES/CANADA FREE TRADE AGREEMENT: BINATIONAL REVIEW PROCEDURES FOR ANTIDUMPING AND COUNTERVAILING DUTY CASES A Report By the Committee on International Trade, The Association of the Bar of The City of New York April 25, 1988 EXECUTIVE SUMMARY The U.S.-Canada Free Trade Agreement initialed on December 10, 1987 ("FTA") covers a wide range of tradeliberalizing measures, including the elimination of all tariffs between the two countries over a ten-year period. This report deals with the FTA provision that antidumping ("AD") and countervailing duty ("CVD") decisions involving U.S.-Canada trade are to be reviewed by binational arbitral panels rather than by national courts. (For some time, AD and CVD review in the U.S. has been within the exclusive jurisdiction of Article III courts, the Court of International Trade ("CIT") and its appellate body, the Court of Appeals for the Federal Circuit, with certiorari to the Supreme Court.) The Committee's conclusions are that the FTA binational review provisions are imperfect, makeshift and designed to be temporary; that the implementing legislation should seek to smooth some of the rough spots; that the constitutional challenges to the review provisions that have been raised will not be sustained (though a minority believes the review provisions to be invalid); and that this review procedure should not, for now, serve as a model for other trade agreements. The Committee assumes that the right to test the constitutionality of the procedures will be left with Article III courts to the extent that such review may be required. The Committee's views may be summarized as follows: (a) The constitutional issues and other legal questions posed by the panel review provisions of the FTA should not dissuade Congress from approving the FTA; (b) Congress should provide a procedure for prompt and complete judicial determination of the constitutionality of the panel provisions, preferably by vesting jurisdiction in one federal court, with direct expedited appeal to the Supreme Court; and (၁) The implementing legislation should carefully integrate the FTA with existing AD and CVD procedures, dealing in particular with the complex issues posed by the cumulation of imports in injury determinations. 1 INTRODUCTION The United States/Canada Free Trade Agreement ("FTA") provides that antidumping ("AD") and countervailing duty ("CVD") decisions by the competent administrative agencies of the two countries, in cases involving imports from one country to the other, will be subject to review by binational panels. A new panel is to be constituted for each case and is to consist of two members designated by each government and a fifth member named by these four. In the United States, this provision would result in panel review of decisions of the International Trade Administration ("ITA"), a division of the Department of Commerce, and of the International Trade Commission ("ITC"), an independent administrative agency. It would supplant existing provisions for initial judicial review of such administrative decisions by the Court of International Trade ("CIT"), with appellate review by the Court of Appeals for the Federal Circuit ("CAFC"), and from that court by the right to petition the Supreme Court for a writ of certiorari. This binational provision is novel in two respects: firstly, it provides for binational review of the application of national law by national agencies and, secondly, apparently in response to earlier objections, it provides for access to the binational panels by private parties. Private litigants would appear before the panels through their own counsel, together with representatives of their governments. As might be expected, the proposal for what amounts to compulsory international arbitration has generated some controversy. We are informed that the panel review provision was included in the FTA as a result of a dramatic compromise between the Secretary of the Treasury of the United States and the Canadian Minister of Finance as a midnight deadline approached one Saturday last October. The Canadian negotiators had sought changes in the substantive AD/CVD law to shield Canadian exports from what was perceived to be American protectionism in the administration of the AD/CVD laws. When substantive changes proved unattainable and were relegated to future bilateral negotiations, the Canadian negotiators insisted upon procedural protections in the enforcement of the existing AD/CVD rules as a sine qua non to an agreement. For this reason, most of the members of this committee believe it is unrealistic to contemplate renegotiating the panel review provisions at the present time. In the United States, the FTA takes the form of an executive agreement, negotiated pursuant to the so-called |