Interpreting International Trade Statutes: Is the Charming Betsy Sinking?

Fordham International Law Journal, Dec 2000

This essay is about the North American Free Trade Agreement (“NAFTA”), the General Agreement on Tariffs and Trade (“GATT”), and the World Trade Organization (“WTO”). The United States has chosen to participate in NAFTA, GATT, and WTO by the President's signing international agreements. These agreements, however, have not been presented to the Senate for ratification as treaties, although, as some commentators have noted, they bear the characteristics of treaties. Rather, they are implemented by Congress enacting domestic implementing legislation as statutory law.

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Interpreting International Trade Statutes: Is the Charming Betsy Sinking?

FORDHAMINTERNATIONALLAWJOURNAL Fordham International Law Journal Jane A. Restani Ira Bloomy Copyright c 2000 by the authors. Fordham International Law Journal is produced by The Berkeley Electronic Press (bepress). http://ir.lawnet.fordham.edu/ilj - 2000 Article 2 y Charming Betsy Sinking? This essay is about the North American Free Trade Agreement (“NAFTA”), the General Agreement on Tariffs and Trade (“GATT”), and the World Trade Organization (“WTO”). The United States has chosen to participate in NAFTA, GATT, and WTO by the President’s signing international agreements. These agreements, however, have not been presented to the Senate for ratification as treaties, although, as some commentators have noted, they bear the characteristics of treaties. Rather, they are implemented by Congress enacting domestic implementing legislation as statutory law. INTERPRETING INTERNATIONAL TRADE STATUTES: IS THE CHARMING BETSY SINKING? Jane A. Restani* Ira Bloom** INTRODUCTION The United States has committed to participate in the globalization of world trade by entering into international agreements and participating in international organizations. These commitments raise important issues regarding the interaction of domestic international trade law, Chevron' deference principles, the Charming Betsy2 doctrine, and decisions of the World Trade Organization ("WTO") in the area of unfair trade practices. The United States has chosen to participate in the North American Free Trade Agreement ("NAFTA"), 3 the General Agreement on Tariffs and Trade ("GATT"), and the World Trade Organization ("WTO") 4 by the President's signing international agreements. These agreements, however, have not been presented to the Senate for ratification as treaties, although, as some commentators have noted, they bear the characteristics of treaties.5 Rather, they are implemented by Congress enacting domestic implementing legislation as statutory * Judge, United States Court of International Trade. ** Professor of Political Science, Lehman College of The City University of New York. law.6 FORDHAMINTERNATIONALLAWJOURNTAL I. INTERNATIONAL TRADE A GREEMENTS IN US. DOMESTIC LAW The Constitutional basis for the domestic implementing legislation is found in the Article I power of Congress to regulate international commerce. 7 The domestic implementing legislation delegates to the Secretary of Commerce,8 the head of an executive branch agency, and the International Trade Commission ("ITC"), an independent regulatory agency, the responsibility for administering the unfair trade practices aspect of the legislation.9 By entering into the agreements, however, the United States has committed to international dispute resolution mechanisms that operate entirely outside the United States legal system.' Resolution of binational or multinational trade disputes may be sought through the WTO dispute-resolution mechanisms, as well as through private action before the ITC and ITA.1 "Unfair trade" decisions of the ITC and ITA may be appealed to the United States Court of International Trade ("CIT"), an Article III court, subsequently to the United States Court of Appeals for the Federal Circuit, and ultimately, by writ of certiorari, to the United States Supreme Court. 1 2 A national of any party to the NAFTA accord, however, may opt to resolve the dispute through the binational panel procedure of that agreement.' Given that the U.S. Government and organs of the 20011 INTERPRETING INTERNATIONAL TRADE STATUTES 1535 international trade organizations may have different views as to the meaning of applicable laws and the underlying international agreements, conflicts may arise.1 4 Inherently, international bodies are not bound by the views of U.S. agencies or courts, and U.S. statutory provisions do not mandate a U.S. agency or court to follow international body decisions.1 5 II. U.S. CASE LAW THE LIMITS OF CHEVRON DEFERENCE Until recently, it had been settled jurisprudence since the U.S. Supreme Court's unanimous decision 6 in the Chevron case that executive agency interpretations of international trade law are entitled to deference.1 7 Chevron, which involved a challenge to an Environmental Protection Agency regulation, set forth a two-step rule for judicial review of a Federal agency's interpretation of a statute it administers: First, always, is the question whether Congress has spoken directly to the precise question at issue .... If a court, employing traditional rules of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect. [Second, if] Competitive Trade v. Clinton, 128 F.3d 761 (D.C. Cir. 1997). See Demetrios G. Metropoulos, ConstitutionalDimensions of the North American Free Trade Agreement, 27 CORNELL INT'L L.J. 141 (1994). See also Dames & Moore v. Regan, 453 U.S. 654 (1981), which upheld Executive Orders of the President, unsupported by express (...truncated)


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Jane A. Restani, Ira Bloom. Interpreting International Trade Statutes: Is the Charming Betsy Sinking?, Fordham International Law Journal, 2000, Volume 24, Issue 5,