are applied as United States law, and do not involve the President, let alone engage his discretion. I cannot imagine that the Department of Justice would regard all of these agreements as non-binding under United States law; surely United States courts would not so rule. - I see no reason why the analysis is different depending or whether the obligation is a precise one e.g., certain kinds of income is to be taxed at a specified rate, or a contingent one e.g., a dumping finding is to be reconsidered in light of a panel opinion. Nor can I follow the reasoning according to which the members of a binational panel would be converted into "officers of the United States" depending on whether the U.S. government was required to carry out the decision of a panel or the President's discretion was interposed. 2. Should there be fast track review for constitutional questions challenging the binational review procedure itself? I think the sooner the doubt about the constitutionality of the panel procedure is removed, the better for the Free Trade Agreement and for all persons involved in trade between Canada and the United States. I do not believe, however, that a special challenge procedure needs to be built into the implementing legislation. As I indicated in my testimony, I think a simple way to test the constitutionality of Article Nineteen of the FTA would be an attempt by a party dissatisfied with a decision of the International Trade Commission or the Commerce Department to seek review of that decision in the Court of International Trade. If that Court dismissed the petition in reliance on the FTA, the dismissal could be reviewed by the Court of Appeals and (before or after decision by that court) by the Supreme Court. That was the procedure followed in Dames & Moore v. Regan, 453 U.S. 654 (1981), concerning the Iran-U.S. Claims Tribunal, and the entire procedure took less than 6 months. I do not believe a special procedure is necessary, and therefore I do not think it is desirable. I would suggest that the report of the Committee simply contain a sentence making clear that there is no intention of foreclosing judicial review of constitutional issues, citing Johnson v. Robison, 415 U.S. 361 (1974). - such as While I do think the questions concerning compatibility of the Agreement with Article II and Article III of the Constitution deserve a prompt answer, I see no reason to encourage challenges thereafter. Special provisions are not made for constitutional challenges of other kinds of decision making administrative proceedings or arbitral awards, and I think the invitation to disappointed litigants to dress their losing cause up as due process claims would be ill-advised. In the unlikely event a panel created under the FTA goes seriously wrong, the special challenge procedure is available under Annex 1904.13. think that reserve provision, plus the establishment of the working group (See Article 1907 (1)(c)) reduce the risk of arbitrariness of the panel procedure to close to nil. I 3. Is Senate confirmation of panel members required? I believe that Senate confirmation of panel members is not required, and indeed would be highly undesirable. (Here I disagree with the representatives of the American Bar Association). I think it is clear that member of panels would not be "officers of the United States," but would be members of an international organ created pursuant to an international agreement. Any effort to clothe the members of the roster, or indeed of individual panels, with the trappings of Presidential appointment plus Senate confirmation would just confuse the issue. The basis for selection of U.S. citizen members of the roster is the foreign affairs power of the President, confirmed in this case by approval of the Agreement. procedure for selecting the panel members say by a - Any reasonable - subcommittee of the Trade Policy Committee is satisfactory. Membership on the roster should not be seen as a political plum or reward, and need not be a Presidential appointment, even without confirmation. I hope these answers are helpful, and I thank the Committee for giving me the opportunity to testify. Sincerely, Andreas F. Lowenfeld THE AMERICAN UNIVERSITY May 21, 1988 Hon. Howell Heflin Committee on the Judiciary Dear Senator Heflin: Thank you for your attentive consideration of my testimony to the Committee yesterday. Here are my responses to the written questions provided by you and your colleagues at the close of the hearing. Because a number of the questions concern closely related subject matter, I have taken the liberty of rearranging and combining them somewhat in the interest of clarity. 1. Would the Free Trade Agreement's creation of a binational arbitral panel to replace domestic judicial review violate the Appointments Clause of the Constitution? Is the Office of Legal Counsel of the Department of Justice correct that the Appointments Clause requires presidential endorsement of decisions of the panel before they may take effect in the United States? What are the implications of OLC's position for international law and the negotiation of international agreements? Appointments Clause concerns stem from some broad language used by the Supreme Court in Buckley v. Valeo, 424 U.S. 1 (1976), in which the Court for bade Congress to appoint members of the Federal Election Commission. The Court said that all "significant authority" pursuant to federal statutes must be performed by persons appointed in conformity with the clause. Since the FTA's panels would have the power to reverse and remand decisions of the Department of Commerce and the International Trade Commission, it is arguable that the panels would be interpreting and applying United States law, and that only "Officers of the United States" may perform such functions. The Office of Legal Counsel would respond to this concern by authorizing the President to direct the agencies to implement the decisions of FTA panels. The OLC position attempts to serve important values of the separation of powers and the preservation of presidential prerogative that we all share. I believe, however, that the effect of the OLC position is to undermine both values. The reasons why this is so explain why the current version of the FTA meets Appointments Clause concerns, and why OLC's amendment would prove seriously counterproductive. Washington College of Law Letter to Hon. Howard Heflin As a number of the written statements furnished your Committee detail, from the beginning of our Republic Presidents have entered international agreements providing for arbitration of claims whose existence had disrupted relations between the signatory nations. When these agreements have been entered by treaty or by Congressional-Executive agreements such as the FTA, Congress has participated. There has been no practice of making all members of the international bodies Officers of the United States, ΟΙ of reserving a condition of subsequent presidential endorsement of results of the arbitration. It is easy to see why this is so. The whole purpose of sending disputed claims to international arbitration is to obtain a neutral, international forum in which both party nations have confidence. The OLC position would deprive the President and the nation of the vital power to settle international claims. How can we expect another nation to enter a settlement agreement if we reserve the power to disapprove the results of particular arbitral decisions with which the President may disagree? Consider the executive agreements that resolved the Iranian hostage crisis. The arrangements that led to the release of our citizens were very complex. They included the creation of an international claims tribunal for the final arbitration of various claims of our citizens against Iran and vice versa. The negotiations leading to the settlement were extremely delicate, and were conducted through the mediation of Algeria. If we had insisted that the President retain a power of approval over particular arbitral awards, how could the agreement have been concluded? At the time, the Department of Justice comprehensively reviewed the settlement, and approved its constitutionality. The Supreme Court later upheld it in Dames & Moore v. Regan, 453 U.S. 654 (1981). Neither the Department nor the Court suggested that Buckley posed any obstacles. In short, Buckley needs to be understood in context. It stands for the proposition that ordinary execution of statutes must be vested in those appointed in conformity with the Appointments Clause. International agreements present somewhat different considerations. Since they become part of our law through operation of the Supremacy Clause, they must be concluded in conformity with the Constitution. But that means that they must follow the requisites for a valid treaty or other international agreement. One of those requisites is that they be entered by an Officer of the United States-- the President himself, or one of his principal subordinates. If that condition is met, it has always been understood that the President may decide to settle international claims by sending them to a binding international forum. See generally L. Henkin, Foreign Affairs and the Consti |