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International and US Trade Law: National Lawmaking and the Regulation of U.S. Trade

International and US Trade Law: National Lawmaking and the Regulation of U.S. Trade. Chapter 8. © 2005 West Legal Studies in Business/Thomson Learning. What is the connection between trade law and foreign policy?.

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International and US Trade Law: National Lawmaking and the Regulation of U.S. Trade

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  1. International and US Trade Law: National Lawmaking and the Regulation of U.S. Trade Chapter 8 © 2005 West Legal Studies in Business/Thomson Learning

  2. What is the connection between trade law and foreign policy? • Trade law governs trade relations with foreign countries including export and import laws • Trade law reflects not only economic policy but foreign policy as well • Should trade be used to advance the aims of foreign policy? • Examples: Cuba, Soviet Grain embargo, China

  3. B-West Imports v. U.S. • Does the revocation of the exemption for China and Pres. Clinton’s ban of import of munitions and arms from China constitute a violation of the due process and takings clause of the 5th Amendment to the U.S. Constitution? • No, under the AECA, the President has great latitude to prohibit the import of controlled items

  4. Congress to regulate commerce with foreign nations and among states (Art.1, sec. 8) Power to pass laws, declare war, collect taxes, advise and consent to treaties President (Art. 2) Treaty power, inherent executive powers, act as commander in chief, powers delegated by congress Regulation of US Trade: sharing of power

  5. President's Power • Treaty • Power to appoint ambassadors • Commander in chief • Inherent executive • Powers delegated by Congress

  6. What conflicts might arise when the President wants Congress to delegate power to him? • Example: President Clinton’ s interest in authority to negotiate an extension of NAFTA. Congress would not give him that power.

  7. When is an agreement not a treaty? • Dole v. Carter • Facts: President Carter made an agreement to return regalia to Hungary. • Issue: Did the President exceed his Constitutionally granted authority by entering into a treaty with Hungary without the advice and consent of the Senate?

  8. When is an agreement not a treaty? • Holding: No. This was not a treaty but an executive agreement made pursuant to the President’s Constitutional inherent executive authority.

  9. Treaties • Self-executing • Non-self-executing or executory • Treaties of Friendship, Commerce and Navigation (FCN)

  10. McNamara v. Korean Airlines • Does the FCN Treaty between Korea and the U.S. which states that each country will be able to employ “…specialists of their choice” protect Korean Airlines from a discrimination action? • Holding: Reversed and remanded for trial to determine whether discriminatory treatment was intentional.

  11. Equal Dignity Rule • An act of Congress can override an inconsistent prior treaty • A treaty will override an inconsistent prior act of Congress • Statutes and treaties are of equal dignity

  12. Trade agreements are classic examples of delegated power to the President to negotiate • Star-Kist v. United States • But if President acts in contravention of Congress?

  13. Examples • GATT • Trade Promotion Authority • Emergency powers • Trading with the Enemy Act • International Emergency Economic Powers Act (IEEPA) 1977- basis of economic sanctions

  14. Fast Track Negotiating Authority: now Trade Promotion Authority • (Trade Reform Act of 1974) renewed in Trade Act 2002 • President notifies Congress; Congress authorizes President to conduct negotiations; agreement submitted to Congress within specified time; Congress must vote to accept or reject within a specified time period (usually 60 or 90 days)

  15. Made in USA Foundation v. U.S. • Did the NAFTA agreement passed by 234 to 200 in the House and 61 to 38 in the Senate in accord with the Fast Track provisions (majority required) violate the Treaty clause (Art. II, sec. 2) of the U.S. Constitution requiring 2/3 Senate vote?

  16. Made in USA Foundation v. U.S. • No, the President had “the authority to negotiate and conclude NAFTA pursuant to his executive authority and pursuant to the statutory authority granted to him by Congress.”

  17. Chas. Main v. Khuzestan • President Carter, as part of a deal to free hostages in Iran, issued an Executive Order under IEEPA suspending claims against Iran in U.S. court. All claims were to be filed with the Iran- U.S. Claims Tribunal.

  18. Chas. Main v. Khuzestan • Issue: Did the President have the power under IEEPA to deprive an individual litigant of his day in U.S. court? • Yes. The President has the authority under IEEPA to transfer blocked Iranian assets to the Tribunal.

  19. USA Patriot Act (2001) • When passed? • Why? • What are important provisions? • Why is it controversial?

  20. Historical Issues: Trade law in Politics • Clinton, Bush & Perot- 1992 • Clinton & Dole- 1996 • Gore, Bush & Nader- 2000 • Bush and Kerry- 2004

  21. U.S. v. Lindh • Issue: Did the Executive Orders under IEEPA that prohibited transactions with terrorists groups including Al Qaeda apply to the American who was caught in Afghanistan with the Taliban fighters after 9/11? • Holding: The Court upheld the validity of the order and the application to Lindh. He then pleaded guilty and was sentenced to 20 years.

  22. Federal - State Relations • Supremacy clause • Import Export clause • Federal preemption • Commerce clause

  23. Myanmar, Human Rights and Preemption • 1996 MA. Sought to ban business with Myanmar by law • 1997, Federal Executive order placing restrictions on investing in Myanmar • Crosby v. National Foreign Trade Council: U.S. Supreme Court struck down Mass. law on basis of preemption (2000)

  24. Commerce Clause and Taxation • Japan Line v. County of Los Angeles ruled that an ad valorem property tax applied to cargo containers used exclusively in foreign commerce violates the Commerce Clause because it results in multiple taxation of instrumentalities of foreign commerce.

  25. Federal Agencies Involved in Trade • Dept. Of Commerce (includes control of exports as well as International Trade Administration or ITA, Bureau of Industry and Security • Dept. of Homeland Security) • Dept. Of Treasury • USTR

  26. Federal Agencies Involved in Trade • International Trade Commission or ITC- bipartisan, investigate trade disputes • Sec. of State • U.S. Court of International Trade

  27. Court of International Trade • Trade and tariff law cases • Actions against the U.S. involving revenue from imports, tariffs, embargoes or quantitative restriction (except for health and safety) and enforcement of customs laws.

  28. Trade Law as a Political Battleground • Separation of powers and checks and balances leaves the President having to work with Congress • What if they aren’t cooperating? • Consequences? • What is the alternative? • Role of business in this process?

  29. Current Issues • Extension of NAFTA? • Cooperation with Republicans and Democrats? Importance? • Trade policy in election year? • Trade sanctions? Are they effective? Helms-Burton Act and Cuba

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