Business Law environment essay
farhm9
Ch08USTrade_0325141.pptxRegulation of U.S. Trade
Chapter 8, Schaffer text
BA177 Kemp
U.S. Political System
Separation of Powers
Treaty Power
Executive Agreements
Trade and Tariff Legislation
International Trade Agreements
Federal-State Relations
Federal Agencies Affecting Trade
Separation of Powers
U.S. Constitution guides regulation of international relations.
U.S. has 50 states that gave up some of their sovereign powers to a central federal government to make a strong nation. It has worked so far. Compare to European Union (EU). Power to regulate international commerce is in the hands of the federal government.
Three overlapping yet separate powers: legislative, executive, judicial. Executive-legislative debate is between president and legislature.
It says Congress has power to regulate commerce with foreign nations.
It says the president has power to make treaties and appoint ambassadors. The president has inherent executive power, treaty power, and powers delegated to the president by Congress.
Youngstown Sheet & Tube (1952) case
Supreme Court said the presidential powers do not include authority to nationalize U.S. steel mills. You have got to read Justice Jackson’s concurring opinion, at least the part in the text.
Treaty Power
President with 2/3 majority of Senate makes treaties.
Congress delegates power to make executive agreements, international agreements that president makes without congressional approval.
Domestic law effect of treaties depends on whether self-executing (domestic law effect) or non-self-executing (executory). Remember those classifications?
Executive Agreements
Congress delegates power to make executive agreements, international agreements that president makes without congressional approval. Two types: sole executive and congressional-executive agreements.
Dole v. Carter (1977). Supreme Court decided that president has power to return crown jewels to Hungary without congressional approval = a sole executive agreement.
Trade and Tariff Legislation
President’s power to negotiate congressional-executive trade agreements has increased.
Still trying to deal with isolationist legislation, the Smoot-Hawley Tariff Act.
First step to reduce tariffs was in Reciprocal Trade Agreements Act of 1934, giving president power to negotiate reduced tariffs on product by product basis using reciprocity.
Most-favored-nation (MFN) trade was introduced. It is now called normal trade relations (NTR). Dictates that lower tariff will be applied to all other MFNs when one negotiates that with U.S.
Trade Expansion Act of 1962 and others authorized president to make across the board tariff reductions and created U.S. Trade Representative (USTR). While there is still a strong protectionist ideology in the U.S. it is much more open to tariff free trade today.
Trade Reform Act of 1974 created broad presidential power and fast-track approval process for trade agreements. U.S. was becoming a world player at last.
International Trade Agreements
Free trade agreements seek to eliminate/reduce tariff and non-tariff barriers to free trade. Usually multilateral.
General Agreement on Tariffs and Trade (1994) (GATT) and World Trade Organization (1994) (WTO) are most influential today.
GATT started in 1947 and has proceeded to develop through multilateral trade negotiations called “rounds.” See next chapter,
Text lists some of the objectives including reducing tariffs, eliminating non-tariff barriers, recognizing human rights including workers and children, protecting IP rights, agricultural agreements….
Federal- State Relations
See slide 2. International trade is a federal power.
Supremacy Clause in Art. 6 says federal law preempts inconsistent state laws.
Import-Export Clause in Art. I, sec. 10 prohibits states from taxing imports and exports. Federal government can’t tax exports either.
Commerce Clause in Art. 1, sec. 8 and dormant commerce clause (negative implication doctrine) prohibit states from making laws that have a substantial impact on the free flow of international and interstate commerce.
Japan Line v. LA County (1979) case. Supreme Court said LA County value based (ad valorem) tax on containers in port was unconstitutional under Commerce Clause. When and how can California tax containers in California ports? See bottom left side of page 267 for the criteria adopted.
Federal Agencies Affecting Trade
Department of Commerce has 12 bureaus: International Trade Administration (ITA) is one.
U. S. Trade Representative (USTR) is part of president’s cabinet and carries on trade negotiations.
International Trade Comission (ITC) shares duties with ITA to investigate unfair trade practices.
U.S. Court of International Trade (CIT) is on level of federal district court and within jurisdiction of Federal Circuit.
Case Problem # 1
ICJ decision that under Vienna Convention on consular Relations U.S. courts could not hold Mexican citizens charged with crimes committed in the U.S. without informing them of their right to confer with the Mexican Consulate.
ICJ was created under the UN Charter. Are these treaties self-executing? Or do they need legislation to make them have domestic law effect?
Consider the practical effect of the decision. Might these viewpoints be justification for the border states like Arizona trying so hard to keep Mexicans in Mexico? How can these issues be fixed?
