relaxed and imports of United States coal into Germany increased significantly. The United States withdrew the item from the 10th session agenda, reserving the right to reintroduce it if necessary. Final figures are expected to show that United States exports of coal to the Federal Republic amounted to about 7 million tons in 1955. (h) United Kingdom motorcycle restrictions The United Kingdom, in consultations held with the United States during the 10th GATT session, agreed to permit the importation of limited numbers of motorcycles for exhibit and resale at the time of the 1956 British automobile show. This is the first time in recent years that United States motorcycles have been admitted to the United Kingdom market. (i) Austrian restrictions on hacksaw blades As a result of discussions between the United States and Austria at the 9th session (1954–55) Austria agreed to resume unrestricted importation of United States hacksaw blades. Consequently, exports of American hacksaw blades to Austria in the first 9 months of 1955 were about $18,000 in contrast with $2,500 admitted in all of 1954. (j) Austrian leather restrictions As the result of bilateral discussions held during the 10th session, Austria agreed that it would automatically approve all requests for licenses to import leathers from the dollar area. (k) Italian restrictions on clectrodes As the result of discussions with Italy during a recent GATT session, Italy has begun a more liberal licensing of imports of United States graphite electrodes. (1) German leather restrictions As the result of bilateral consultations at the 10th GATT session, Germany has recently instituted a system that would permit tanned leathers, particularly calf leathers produced in the United States, to compete freely with other foreign leathers in the German market. In recent years Germany has allowed almost no such United States leathers into the German market. (m) Belgian restrictions on motion pictures In 1951, when Belgium made known that it was imposing restrictions for balance-of-payments reasons and was giving motion-picture distributors 3 days to make counterproposals, the American Embassy in Brussels interceded on behalf of the American movie industry. It brought to the attention of the Belgians the obligation in the General Agreement for consultations in regard to the imposition of balance-of-payments restrictions. The result was that these restrictions were postponed, and much milder restrictions were later imposed after consultation with the industry. (n) Brazilian import restrictions on motion pictures In November 1952 the United States invoked article XI, paragraph 1, of the General Agreement in protest against a Brazilian decree which called for an import limitation of one print per film. The application of the decree was postponed, and, while the question has not been finally disposed of, restrictions provided by the decree have not been made effective. E. EXPORT QUOTAS The agreement prohibits the use of export quotas except where required for short supply reasons or other stated, legitimate purposes. (a) BRAZILIAN COFFEE EXPORT RESTRICTIONS The United States Embassy in Rio de Janeiro made representations to the Government of Brazil in 1951 concerning the application of monthly export quotas on coffee. The United States protest held that the Brazilian action was in violation of article XI of the General Agreement. The system of export quotas was subsequently altered and the basis for the complaint removed. F. MIXING REGULATIONS The GATT (art. IV: 5-7 of the amended Agreement) obligates governments not to establish new or more restrictive "mixing regulations" than already in effect and not to limit the right of any foreign supplier to compete freely for the import trade permitted under such regulations. (a) UNITED KINGDOM TOBACCO MIXING REQUIREMENT In 1950-51, the United States was successful in securing modification of a new British requirement that oriental tobacco be mixed with Virginia tobacco to the amount of 5 percent of the total. On the basis of their obligations in the General Agreement, the British agreed to permit again the manufacture of pure Virginia cigarettes, satisfying the desires of the United States tobacco industry. (b) BRAZILIAN REGULATIONS ON MOTION PICTURES In January 1952 the United States invoked article III against a new decree and draft bill which would have required importers to acquire domestic newsreels and shorts to the extent of 10 percent of the footage imported in a previous year. The objectionable requirement was blocked by revision of the draft bill and nullification of the decree. G. CUSTOMS PROCEDURES There are articles in the GATT on valuation for customs purposes, import and export formalities, marks of origin and publication and administration of trade regulations, designed to assure that customs regulations and procedures are not drawn or administered in such a way as to be unnecessarily restrictive of trade (arts. VII-X). The United States has on occasion invoked these provisions to eliminate barriers to its export trade. (a) BRAZILIAN MARKING REQUIREMENTS In July 1952, the United States reminded Brazil that a relaxation of a requirement that bags be marked in indelible ink, which had been extended to Chile, should also be extended to imports from the United States. The basis for the United States protest was article IX of the General Agreement which requires most-favored-nation treatment with respect to marking requirements. The Brazilian Government then instructed its customs officers to extend to the United States, on a most-favored-nation basis, the treatment which applied to Chile. (b) BELGIAN RESTRICTIONS ON MOTION PICTURES When Belgium proposed, on short notice, to impose restrictions on imports of American films for balance-of-payments reasons, it attempted to justify not having given advance publicity to this move on the grounds that the restrictions would be temporary. The American Embassy in Brussels reminded the Belgian Government that the general agreement (art. X) required Belgium to give public notification of restrictions without regard to whether they were temporary. Following United States representations in this case on these and other grounds, the imposition of the restrictions was postponed, and more satisfactory arrange ments were worked out following dicussions. Hon. JERE COOPER, Chairman, Committee on Ways and Means, House of Representatives. DEPARTMENT OF STATE, DEAR MR. COOPER: During the recently concluded public hearings on H. R. 5550 before your committee, a number of legal points were raised by Representative Curtis and others relating to the bill. The views of this Department concerning these questions were requested. There is enclosed a memorandum prepared in the Office of the Legal Adviser which discusses the principal legal points which were thus raised. I trust that this memorandum will assist in clarifying these matters. Sincerely yours, HERMAN PHLeger, Legal Adviser. PRINCIPAL LEGAL QUESTIONS RAISED RELATING TO H. R. 5550 CONTENTS 1. Constitutionality of the Trade Agreements Act. 2. Scope of Authority in the Trade Agreements Act for the Inclusion of General Provisions in Trade Page The principal legal questions which have been raised regarding H. R. 5550 relate to (i) the constitutionality of the Trade Agreements Act, (ii) the authority 1. CONSTITUTIONALITY OF THE TRADE AGREEMENTS ACT An examination of the question whether the Trade Agreements Act involves an unconstitutional delegation of power to the President has led to the conclusion that no such delegation is involved in the act. That act authorizes the Presi- dent, if he makes certain findings of fact, to "enter into foreign trade agreements," and to proclaim, subject to certain specified limitations, such modifications or continuances with regard to duties and other types of restrictions as are "re- quired or appropriate to carry out any foreign trade agreement" entered into under the act. The facts that the President must find as the basis for such ac- tion are: (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 purpose of the act-expanding foreign mar- kets for products of the United States by regulating the admission of foreign goods into the United States in accordance with the characteristics and needs of various branches of American production-will be furthered by such an agree- The Trade Agreements Act goes no further than numerous former enactments which have delegated limited discretionary power to the President and which have been upheld by our courts whenever questioned. For example, the con- stitutionality of the Tariff Act of 1890 was attacked in the case of Field v. Clark (143 U. S. 649, 681 (1892)) on the ground that, in authorizing the President to suspend the free importation of certain products, the Congress had delegated to him both legislative and treatymaking powers. The United States Supreme Court, however, upheld the validity of the legislation and of the reciprocity The Tariff Act of 1922 conferred upon the President considerable discretionary power within the field of tariffs-the "flexible tariff" provision (continued in the The Trade Agreements Act, which prescribes specific purposes to be accom- The essential limitations are the requirements that duties not be altered beyond certain limits, that products not be transferred between the dutiable and free lists, and that trade agreements be subject to termination within specified time limits. Other limitations have been added in recent years. When it is considered that the Supreme Court of the United States has held that standards no more definite than "public interest" (New York Cont. Securities Corp. v. United States, 287 U. S. 12, at 24), "public convenience, interest, or necessity" (Federal Radio Commission v. Nelson Bros. Bond and Mortgage, Co., 289 U. S. 266 at 285; National Broadcasting Co. v. United States, 319 U. S. 190, at 225; Federal Communications Commission v. Pottsville Broadcasting Co., 309 U. S. 134, at 138), and "excess profits" (Lichter v. United States, 334 U. S. 742, at 783) were fully sufficient to satisfy the constitutional requirement for appropriate limits on the delegation of authority to the Executive in respect of matters specifically assigned to the Congress by the Constitution, it is clear that the more substantial standards in the Trade Agreements Act are sufficient compliance with the standard of the "intelligible principle" and the standard of "commonsense and the inherent necessities of the governmental coordination", which are the touchstones of the Hampton case. 2. SCOPE OF AUTHORITY IN THE TRADE AGREEMENTS ACT FOR THE INCLUSION OF GENERAL PROVISIONS IN TRADE AGREEMENTS Provisions of Trade Agreements Act The Trade Agreements Act, since its original enactment in 1934, and as specifically reenacted by H. R. 1 in 1955, has always provided as follows: ***For the purpose of expanding foreign markets for the products of the United States (as a means of assisting in establishing and maintaining a better relationship among various branches of American agriculture, industry, mining, and commerce) by regulating the admission of foreign goods into the United States in accordance with the characteristics and needs of various branches of American production, so that foreign markets will be made available to those branches of American production which require, and are capable of developing, such outlets, by affording corresponding market opportunities for foreign products in the United States, the President, whenever he finds as a fact that any 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 that the purpose above declared will be promoted by the means hereinafter specified, is authorized from time to time "***To enter into foreign trade agreements with foreign governments or instrumentalities thereof *** "*** To proclaim such modifications of existing duties and other import restrictions, or such additional import restrictions, or such continuance, and for such minimum periods, of existing customs or excise treatment of any article covered by foreign trade agreements, as are required or appropriate to carry out any foreign trade agreement that the President has entered into hereunder." (Sec. 350 (a) of the Tariff Act of 1930, as amended, 48 Stat. (pt. 1) 943; 69 Stat. 163.) It will be noted: (1) That the purpose for the conclusion of trade agreements is the broad one of "expanding foreign markets for products of the United States"; (2) that the President is authorized to act upon a finding that either duties or "other import restrictions" of either the United States or any foreign country are "unduly burdening and restricting the foreign trade of the United States"; (3) that he is authorized, without qualification as to the content, to enter into "foreign trade agreements," and (4) that he is authorized to proclaim, in order to carry out such agreements, not only the modification of duties but also the modification of "other import restrictions," the continuance of "customs or excise treatment," and the imposition of “additional import restrictions." From the beginning, and now, the Trade Agreements Act has defined "duties and other import restrictions" to include "rate and form of import duties and classification of articles *** limitations, prohibitions, charges, and exactions other than duties, imposed on importation or imposed for the regulation of imports." (Sec. 350 (c) (now sec. 350 (c) (1)) 48 Stat. (pt. 1) 944; 69 Stat. 165.) The purpose for which the President may conclude trade agreements and the matters with respect to which he is authorized to proclaim were both designed by the Congress to encompass broadly matters having a bearing on trade. The scope of the provisions which might be included in the trade agreements which are authorized may be seen after an examination (1) of the legislative history of the original Trade Agreements Act, as supplemented by legislative history of various renewals of the trade agreements authority, and (2) of the scope of agreements relating to trade matters prior to enactment of the Trade Agreements Act. Legislative history in 1934 In discussing the scope of the President's authority, the report of the Ways and Means Committee on the original Trade Agreements Act, in 1934, which was reprinted as a part of the report of the Senate Finance Committee on the same legislation, contains the following emphasis on the importance of the President's authority to deal with matters other than tariffs: "It is noteworthy that, in dealing with a complex situation in other countries, the President is empowered to deal not merely with customs duties but with other import restrictions." (73d Cong., 2d sess., H. Rept. 1000, 15; ibid., S. Rept. 871, 18.) The report referred specifically to the authority to bind duties and duty-free treatment, to the fact that one of the "chief protective measures" which the President would desire would be a pledge that excise duties would not be increased at the same time import duties were reduced, and to the necessity for reciprocity in this respect, the President being "empowered to promise that existing excise duties which affect imported goods will not be increased". In addition to the above emphasis on the authority to deal with other "restrictions" as well as tariff duties, the Ways and Means Committee report referred to the statutory definition of import restrictions as a "careful definition", adding that it was "designed to cover the various types of measures for the retardation of trade which the President will be expected to deal with in his negotiations with other countries" (73d Cong., 2d sess., H. Rept. 1000, 16; ibid., S. Rept. 871, 19). The provisions in the report of the Ways and Means Committee discussed above should be interpreted in the light of the following statements by Secretary of State Hull to the committee preceding the drafting of the report and of the statutory definition of duties and import restrictions in its final form: "There are so many different names and such a large number of methods of obstruction and of impeding, with new devices being conceived and put into effect every week, that, unless this language is made sufficiently broad to cover them, it might not be possible to secure any concessions from any of those countries. "In view of this fact, as I say, if we do not have rather broad authority to face other countries, with their network of ever-increasing devices of every kind and description and name, in a short time most of them would be out of range of our capacity. "What I tried to say was that we have found that many countries throughout the world have been adopting the most amazing devices, calling them by every sort of name, but the sole purpose of which is to perform the identical function of tariffs at the customhouse, by obstructing imports; hence, in order to make it possible to approach some of these countries and to challenge some things that are out of reason and are provoking bitter controversies among countries, we must have full authority, otherwise, in respect of the things that are declared in purpose and effect and intended as a substitute for the ordinary name and function of tariffs, we would not get anywhere. "Import license is one, with an allotment of some kind. What they call in some countries import sanitary inspection, which is used in lieu of tariffs, is one. What in some other country would be called an exchange restriction, in an instance where it was not intended primarily to deal with the monetary situation, but was really a restriction imposed to keep imports out by notifying an exporter in some country that he could not get pay if he should sell a bill of goods in that country, is another one." (Ways and Means Committee (House), Reciprocal Trade Agreements: Hearings on H. R. 8430 (hereinafter referred to as House hearings, 1934), 8, 9, and 13; emphasis added.) When Congressman Treadway referred to Secretary Hull's statement as to "extreme obstructions to international trade" and asked what "these trade barriers" were, the Secretary supplied for the record the following list, accompanied by a further explanation of some of the devices: "DEVICES FOR THE CONTROL OF IMPORTS "The principal devices which have been utilized in the control of international trade in recent years are: "1. Higher tariff duties. "2. Import quotas and license restrictions. |