2. The act provides authority for the general trade rules in GATT as well as the individual tariff concessions.

3. The act provides authority for the administrative provisions in GATT. II. Congress may constitutionally recommend United States participation in OTC by H. R. 5550.

A. American participation in OTC would violate no provision of the Constitution.

1. Neither GATT nor the OTC Agreement gives to international bodies or foreign nations any of the constitutional power of Congress "To regulate commerce with foreign nations" or any other power of Congress.

2. All the powers given OTC and the contracting parties of GATT have ample precedent in international organizations already entered into by the United States and are less extensive than many of the powers possessed by some of these organizations.

B. There is ample precedent for congressional recommendation of United States participation in an international organization by majority vote of both Houses.

ARGUMENT

POINT THE PRESIDENT HAD THE NECESSARY AUTHORITY TO AGREE TO UNITED STATES ADHERENCE TO AND PARTICIPATION IN GATT UNDER THE AUTHORITY DELEGATED TO HIM IN THE RECIPROCAL TRADE AGREEMENTS ACT

H. R. 5550 is a bill authorizing American participation in the Organization for Trade Cooperation. It makes no direct reference to GATT. It might be thought, therefore, that constitutional questions about H. R. 5550 could be completely resolved by consideration of the OTC agreement alone. While this may be technically correct, a thorough study of the constitutional problem must be wider in scope. The primary function of OTC is to administer GATT. It would make no sense for Congress to authorize American participation in OTC if GATT itself were not a valid international obligation of the United States. An inquiry into the constitutionality of present American adherence to GATT is, therefore, a prerequisite to considering the constitutional authority of Congress to approve OTC.11

American adherence to and participation in GATT was effected by the executive department of the United States Government without specific congressional approval. This has been described by some cri.ics as an unconstitucional usurpation of congressional power. They point to the fact that the Constitution gives to Congress the power "To lay and collect taxes, duties, imposts, and excises" (including tariffs) and "To regulate commerce with foreign nations." 12 In reply to charges of unconstitutionality, the executive department maintains that Congress, in the Reciprocal Trade Agreements Act of 1934, made a delegation to the Executive of its power to make tariffs and to regulate commerce with foreign nations, and that this delegation provided ample authority for the Executive to undertake American participation in GATT.

A. The Reciprocal Trade Agreements Act is a constitutional delegation of congressional power

The first question to be decided is whether the Reciprocal Trade Agreements Act is a constitutional delegation of congressional power. No court has yet had an opportunity to pass directly upon this question.13 Nevertheless, the constitutionality of the act rests on a solid foundation of judicial authority.

It is well established that Congress may delegate its constitutional powers to the Executive when it lays down an "intelligible principle" to guide the Executive in the exercise of such powers. In the domestic field, Congress has made numerous delegations to administrative agencies of its power to regulate inter

11 Since we must first consider the validity of the original United States adherence to GATT, all references in the following section (unless otherwise specified) will be to that agreement in its original, prerevision form. 12 Art. I, sec. 8, cl. 1 and cl. 3.

13 Until recently there has been no generally available procedure by which domestic producers affected by tariff reductions and other changes in import restrictions made by the Executive could challenge the constitutionality of the Reciprocal Trade Agreements Act. In 1951, however, Congress provided such a procedure. Trade Agreements Extension Act, June 16, 1951, ch. 141, sec. 9 (a), 65 Stat. 72, 75.

Two cases are now pending in which the constitutional question has been raised. Morgantown Glassware Guild, Inc. v. Humphrey, Secretary of the Treasury, Civil No. 876-55, D. D. C., Aug. 29, 1955 (mem. op.), on appeal, No. 13033, D. C. Cir. (petition for declaratory judgment that act is unconstitutional and GATT adherence ultra vires; dismissed for want of jurisdiction); Star Kist Foods, Inc. v. United S'ates (Bruno Scheidt, Inc., party in interest), Protest No. 258737-K, Customs Ct. (attack on constitutionality of act as authority for tariff reduction accomplished by bilateral trade agreement with Iceland; not yet at issue). 14 Hampton & Co. v. United States, 276 U. S. 394 (1928).

state commerce.

The courts have upheld the constitutionality of such delegations even where the administrative agencies were left free to operate within principles as broad and indefinite as "public interest" 15 and "public convenience, interest, or necessity."

"" 16

In the tariff and foreign trade field, two leading cases establish the constitutional validity of delegations of congressional power. In Field v. Clark," the Supreme Court upheld a section of the Tariff Act of 1890 which authorized the President to suspend the duty-free status of certain foreign products whenever he found that the countries exporting those products maintained "reciprocally unequal and unreasonable" duties on American products. In Hampton & Company v. United States,18 the Supreme Court upheld a section of the Tariff Act of 1922 which authorized the President to vary American tariff rates in order to "equalize the differences in the costs of production" of domestic and foreign articles. In both these cases the quoted statutory provisions were held to set standards definite enough to constitute a valid delegation of congressional power. The Reciprocal Trade Agreements Act 19 authorizes the President to enter into "foreign-trade agreements with foreign governments" and to proclaim modifications of existing United States tariffs and other import restrictions in accordance with those agreements. In exercising his authority under this legislation, the President must find

(1) That "existing duties or other import restrictions of the United States or any foreign country are unduly burdening and restricting the foreign trade of the United States" and

(2) That the exercise of his authority will promote the purpose of the legislation, i. e., that of "expanding foreign markets for the products of the United States." 20 The principle laid down here is certainly no less "intelligible" than the principles upheld in the Field and Hampton decisions. As Senator George declared during the original congressional debates on the Reciprocal Trade Agreements Act: "No fair-minded person can say that the principle of bargaining to open lanes of distribution and markets of consumption by the Chief Executive in aid of the domestic producer is not as intelligible and practicable a principle within the rule announced in the Hampton case as that of equalizing the costs of production the world over as compared with prevailing costs in the United States." "1 The constitutionality of the Reciprocal Trade Agreements Act becomes particularly clear when attention is focused on the area of the governmental activity that is here involved. We have already noted that the courts have upheld extremely broad delegations by Congress of its constitutional power in the domestic field. They have been even more willing to sanction such delegations when the legislative powers overlapped as they do here-existing executive powers in the field of foreign affairs. As the Supreme Court declared in United States v. Curtiss-Wright Export Corporation:

"It is important to bear in mind that we are here dealing not alone with an authority vested in the President by an exertion of legislative power, but with such an authority plus the very delicate plenary and exclusive power of the President as the sole organ of the Federal Government in the field of international relations a power which does not require as a basis for its exercise an act of Congress, but which, of course, like every other governmental power, must be exercised in subordination to the applicable provisions of the Constitution. It is quite apparent that if, in the maintenance of our international relations, embarrassment-perhaps serious embarrassment-is to be avoided and success for our aims achieved, Congressional legislation which is to be made effective through negotiation and inquiry within the international field must often accord to the President a degree of discretion and freedom from statutory restriction which would not be admissible were domestic affairs alone involved." 22 [Italics supplied.]

The constitutionality of the delegation of congressional power contained in the Reciprocal Trade Agreements Act was fully and carefully considered by the Congress itself when the act was first enacted. The House Ways and Means Committee gave "particular attention to the question of constitutionality" of the legislation. It concluded that "the proposed bill goes no further than many

18 New York Continental Securities Corp. v. United States, 287 U. S. 12, 24 (1932).

16 Federal Ridio Commission v. Nelson Brothers Bond & Storage Co., 289 U. S. 266, 285 (1933).

17 143 U. S. 649 (1892).

18 276 U. S. 394 (1928).

1969 Stat. 162, 19 U. S. C. A. § 1351 (Supp. 1955). This is the latest extension of the authority granted the President in the Reciprocal Trade Agreements Act of 1934, ch. 474, 48 Stat. 943.

20 U. S. C. A. § 1351 (a).

21 78 Congressional Record 10077 (1934).

22 299 U. S. 304, 319-320 (1936).

previous enactments of the Congress; in fact, it follows the current of legislation enacted from the early days of our history." 23 The same committee in later years supported not only a renewal but a broadening of the delegated powers and reaffirmed its conclusion that "the Trade Agreements Act involves no improper delegation of legislative power.' 11 24 Representative Fred Vinson, later Chief Justice of the United States, was particularly vehement in asserting that the constitutionality of the act was beyond question:

"For the life of me, I cannot understand how this defense would be set up at this time. *** The matter is really not debatable. The placing of this discretion in the Chief Executive of the United States is not an unconstitutional delegation of power." "" 25

As a concluding point, it should be noted that Congress has extended the authority delegated to the President by the Reciprocal Trade Agreements Act nine times since the act was first passed in 1934. There could scarcely be more impressive evidence that Congress regards the act as a constitutional delegation of its own power.

B. The Reciprocal Trade Agreements Act provides authority for United States participation in GATT

The case against the constitutionality of American participation in GATT is not based solely on the charge that the Reciprocal Trade Agreements Act is unconstitutional. It rests also on the alternative charge that the Reciprocal Trade Agreements Act, even if constitutional, does not authorize American participation in GATT. Three arguments have been advanced to support this latter assertion: 1. The act authorizes the President to make bilateral trade agreements, but not a multilateral trade agreement like GATT;

2. The act authorizes the President to make agreements embodying tariff concessions but not embodying the general trade rules contained in GATT; and 3. The act does not authorize the President to make agreements embodying the administrative provisions contained in GATT.

Each of these arguments must be examined in turn.

1. The Reciprocal Trade Agreements Act authorizes the President to conclude multilateral as well as bilateral agreements.

The Reciprocal Trade Agreements Act authorizes the President to enter into "foreign trade agreements" with other governments for the purpose of "expanding foreign markets for the products of the United States." Special note should be made of the phrase "foreign trade agreements." The legislation does not specify bilateral agreements only. There is no evidence in the legislative history of the act to indicate that the Congress wished to confine the executive in this way. It must be considered, therefore, that the Congress wished to leave the executive free to conclude either bilateral or multilateral agreements, whichever would best promote, in the given circumstances, the purposes for which the Act was passed.26

That the purposes of the Reciprocal Trade Agreements Act would be promoted by multilateral rather than bilateral agreements was clearly demonstrated in the first decade of the act's history. In that period the President exercised his authority by negotiating bilateral agreements with 29 countries. Under these agreements the United States made reductions in its tariffs in return for reductions in the tariffs of its various trading partners. The agreements also provided limitations on the use of trade restrictions other than tariffs (such as quantitative restrictions and internal taxes) which might be used to nullify the effect of the tariff reductions.

"H. R. Rep. No. 1000, 73d Cong., 2d sess. 7 (1934). See also S. Rep. No. 871, 73d Cong., 2d sess. 10 (1934). H. R. Rep. No. 594, 79th Cong., 1st sess. 10-11 (1945).

81 Congressional Record 1028 (1937). For authoritative analyses leading to the same conclusion, see Francis B. Sayre, Constitutionality of the Trade Agreements Act, 39 Columbia Law Review 751 (1939); Comment, The Trade Agreements Act of 1934, 46 Yale Law Journal 647 (1937); Green H. Hackworth, Legal Aspects of the Trade Agreements Act of 1934, 21 American Bar Association Journal 570 (1935).

Reference may be made by way of analogy to United States Constitution art. II, sec. 2, cl. 2, which gives the President the power, with the advice and consent of the Senate, "to make treaties." This has never been interpreted to confine the President to the making of bilateral treaties.

Reference may also be made to the fact that the United States has entered into numerous multilateral postal agreements under a statutory authorization to the executive that said nothing about multilateral postal agreements. On the very day the President signed the Reciprocal Trade Agreements Act of 1934 he also signed an Act providing that "the Postmaster General, by and with the advice and consent of the President, may negotiate and conclude postal treaties and conventions". Act of June 12, 1934, cl. 473, 48: Stat. 943. This act amended earlier legislation containing the same language, which, as Congress knew, had been used as authority for entering into multilateral postal conventions. Apparently the 73d Congress did not consider it necessary to specify that multilateral as well as bilateral agreements were within the ambit of authority granted to the executive either in the postal or in the trade agreements field.

This syetm of bilateral trade agreements revealed serious limitations. The agreements naturally provided for unconditional most favored nation treatmenta principle of commercial policy adopted by the United States and most other countries as a necessary basis for nondiscriminatory and friendly trade relations. This provision meant that the concessions made by the parties to each agreement were granted generally to the trade of other countries. In the system of bilateral agreements, the most favored nation clause produced a certain amount of difficulty. Parties to a particular bilateral agreement were inhibiting in granting tariff concessions to one another by the fear that countries not parties to the agree ment would obtain benefits from those concessions without giving any concessions of their own in return. Parties to a bilateral agreement were also reluctant to agree to general trade obligations in the absence of assurance that other countries would assume the same obligations themselves.

Accordingly, in planning for international trade cooperation after the Second World War, it was decided to abandon the bilateral method of tariff bargaining in favor of a multilateral approach. Under the new system the world's trading nations would all meet simultaneously to conclude their various sets of tariff bargains. They would thus be able to make substantial concessions with the assurance of knowing just what would be the sum total of concessions afforded by all the other nations in return. They would also be able to agree upon a common set of trade rules to protect and supplement those tariff concessions.

The General Agreement on Tariffs and Trade was nothing more than the name for the agreement which embodied this new approach. Considering both the unqualified authorization of the Reciprocal Trade Agreements Act to make "foreign trade agreements" and the proven shortcomings of the bilateral approach as a means of achieving the act's objective, it is only reasonable to conclude that the authorization included the making of a multilateral agreement.

2. The Reciprocal Trade Agreements Act provides authority for GATT's General Trade Rules.

GATT contains a number of general trade rules as well as individual tariff concessions. These rules cover such subjects as unconditional most favorednation treatment, internal taxation, customs administration, and quantitative restrictions.27 There can be no doubt but that the President has the authority to conclude a trade agreement embodying such rules. The Reciprocal Trade Agreements Act provides the general authorization to the executive to “enter into foreign trade agreements" for the "purpose of expanding foreign markets for the products of the United States." The purpose of the act could not be achieved unless the President were empowered to deal in his negotiations with the whole range of restrictions which effectively impede American exports. This factor was specifically recognized in the act when it authorized the President to proclaim modifications of "other import restrictions" 28 as well as tariffs.

On numerous occasions before the passage of the Reciprocal Trade Agreements Act in 1934 the President-in some cases even without congressional authority to make agreements on tariff matters-entered into trade agreements embodying general rules of trade policy.29

27 The following is a complete list of the articles of GATT containing general princirles of trade policy: art. I (general most-favored-nation treatment); arts. III and IV (national treatment on internal taxation and regulation); art. V (freedom of transit); art. VI (antidumping and countervailing duties); art. VII (valuation for customs purposes); art. VIII (fees and formalities connected with importation and exportation); art. IX (marks of origin); art. X (publication and administration of trade regulations); art. XI (general elimination of quantitative restrictions); art. XII (restrictions to safeguard the balance of payments); art. XIII (nondiscriminatory administration of quantitative restrictions); art. XIV (exceptions to the rule of nondiscrimination); art. XV (exchange arrangements); art. XVI (subsidies); art. XVII (State trading enterprises); art. XVIII (Governmental assistance to economic development); art. XIX (emergency action on imports of particular products); art. XX (general exceptions); art. XXI (security exceptions); art. XXIV (territorial application-frontier traffic-customs unions and free-trade areas).

28 69 Stat. 162, 163, 19 U. S. C. A. sec. 1351 (a) (1) (supp. 1955).

29 The texts of some of these agreements are collected in Hearings before the Senate Committee on Finance on Extension of the Reciprocal Trade Agreements Act, 81st Cong., 1st Sess. 1131 (1949).

It should be noted that the general rules of commercial policy embodied in GATT apply to all trade between the parties, not just to the commodities on which tariff concessions are made. But this fact represents no new development. Trade rules applying to all trade were included in a number of executive agreements concluded prior to 1934. An executive agreement between the United States and Germany, for example, signed by Secretary of State Elihu Root in 1907, included general undertakings by the United States with respect to modification of its "customs and consular regulations"-regulations involving such matters as the definition of dutiable "market value" and the conduct of proceedings by the United States Board of Appraisers (now the United States Customs Court). 1 Malloy, United States Treaties, Conventions, International Acts, Protocols and Agreements 563 (1910) (not in Statutes at Large). See also agreement with Greece according mutual unconditional most-favored-nation treatment in customs matters, December 9, 1924, TS706, 4 United States Treaties, Conventions, International Acts, Protocols and Agreements 4281 (Trenwith ed. 1938) (not in Statutes at Large); provisional agreement with Persia respecting commercial relations, May 14, 1928, 47 Stat. 2644, EAS 19; provisional commercial agreement with Rumania for most-favored-nation treatment, August 20, 1930, 47 Stat. 2593, EAS 8.

The Committee on Ways and Means of the House of Representatives took special notice of these agreements when it reported in 1934 on the bill which became the original Reciprocal Trade Agreements Act.30 ferred to these agreements as precedents for the validity of the agreements about The committee reto be authorized by the Trade Agreements Act, and clearly indicated that it considered general trade rules a proper part of the trade agreements to be entered into under the legislation.

During hearings before this committee, Secretary of State Cordell Hull made a point of asking for the delegation of "full authority; otherwise, in respect of the things which are declared in purpose and effect and intended as a substitute for the ordinary name and function of tariffs, we would not get anywhere." 31 After hearing testimony such as this, the committee emphasized that authority was being given the President to proclaim changes in "other import restrictions" as well as tariffs, and that this authority was "designed to cover the various types of measures for the retardation of trade, with which the President will be expected to deal in his negotiations with other countries." 32

Following this clear declaration of congressional intent general trade rules were incorporated in bilateral agreements concluded by the President under the authority of the Reciprocal Trade Agreements Act.33 In renewals of the act committees of Congress referred, with approval, to the inclusion of such trade rules.34 3. The Reciprocal Trade Agreements Act authorizes the administrative provisions of GATT.

We have now seen that the Reciprocal Trade Agreements Act provided authority for the President to participate in a multilateral tariff agreement and also to adhere to GATT's general rules of trade policy. The only other provisions in GATT (except for the statement of objectives) are those of an administrative character. Some critics have suggested that by participation in an international agreement containing these provisions the Executive has made an unconstitutional delegation to an international body of the power of Congress "To regulate commerce with foreign nations." power to enter into foreign trade agreements, the question is really whether the Since Congress delegated to the Executive the Executive has redelegated to GATT any powers of Congress, and, if so, whether such redelegation was constitutionally proper.

It is difficult to see how the administrative provisions of GATT involve any redelegation by the Executive of congressional power. The Constitution gives

to Congress the power "To regulate commerce with foreign nations." The contracting parties to GATT, operating under the administrative provisions, cannot impinge upon this power. They have no authority to make commercial policy for the United States. They cannot change a single American tariff rate, nor any other American law relating to the import or export of goods.

With the exceptions to be discussed below, the administrative provisions of GATT are purely mechanical arrangements defining the obligations of the agreement and the rights of the contracting parties inter se. object of serious challenge.35 These have not been the

The charge that the administrative provisions of GATT delegate to the contracting parties the power of Congress "To regulate commerce with foreign nations" is probably inspired by certain powers of interpretation and waiver given the contracting parties in the two administrative articles not yet dealt with.38

* H. Rept. 1000, 731 Cong., 21 sess.; 9, 10, 15 (1934).

Hearings before the House Committeen Ways and Means on H. R. 8430, concerning Reciprocal Trade Agreements, 731 Cong., 21 sess., 8, 9, 13 (1934). #H. Rept. 1000, 731 Cong., 21 sess., 16 (1934).

See, e. g., Reciprocal Trade Agreement With Switzerland, January 9, 1936, 49 Stat. 3917, E. A. S No. 90; with Mexico, Dec. 23, 1942, 57 Stat. 833, E. A. S. No. 311.

See H. R. 166, 75th Cong., 1st sess. 11-12 (1937); S. 111, 75th Cong., 1st sess. 5 (1937); H. R. 409, 78th Cong., 1st sess. 42 (1943). On several occasions the courts have considered, without questioning their validity, the general trade rules incorporated in bilateral agreements negotiated under the act. Guthrie & Co. v. United S'ates, 31 C. C. P. A. (Customs) 63, 136 F. 2d 1019 (1943); Greene Cattle Co., Inc. v. United States, 36 C. C. P. A. (Customs) 52 (1949). See Balfour,

"The following is a list of these provisions: Article XXII (consultation); article XXVI (acceptance, entry into force, and registration); article XXVII (withholding or withdrawal of concessions); article XXVIII (modification of schedules); article XXIX (the relation of this agreement to the Havana Charter); article XXX (amendments); article XXXI (withdrawal); article XXXII (contracting parties); article XXXIII (accession); article XXXIV (annexes); article XXXV (nonapplication of the agreement between particular contracting parties).

Powers of interpretation and waiver are also given the contracting parties in some of the articles on general trade policy, such as articles XII and XVIII. Since the powers given in these articles are of the same type as the powers given the contracting parties by administrative articles XXIII and XXV, they will not be separately considered.