Why Certain Trade Agreements Are Approved as Congressional-Executive Agreements Rather Than as Treaties

Why Certain Trade Agreements Are Approved
as Congressional-Executive Agreements
Rather Than as Treaties
Jeanne J. Grimmett
Legislative Attorney
American Law Division
U.S. trade agreements such as the North American Free Trade Agreement
(NAFTA), World Trade Organization agreements, and bilateral free trade agreements
(FTAs) have been approved by majority vote of each house rather than by two-thirds
vote of the Senate — that is, they have been treated as congressional-executive
agreements rather than as treaties. The congressional-executive agreement has been the
vehicle for implementing Congress’s long-standing policy of seeking trade benefits for
the United States through reciprocal trade negotiations. In a succession of statutes,
Congress has authorized the President to negotiate and enter into tariff and nontariff
barrier (NTB) agreements for limited periods, while permitting NTB and free trade
agreements negotiated under this authority to enter into force for the United States only
if they are approved by both houses in a bill enacted into public law and other statutory
conditions are met; implementing bills are also accorded expedited consideration under
the scheme. The President was again granted temporary trade negotiating authority
utilizing this approach in the Trade Act of 2002 (P.L. 107-210); the authority applied to
agreements entered into before July 1, 2007. Implementing bills for eight FTAs have
been signed into law under the act; agreements with Colombia, Panama, and South
Korea remain pending. While legislation for the U.S.-Colombia agreement (H.R. 5724)
was introduced April 8, 2008, House leadership considered that the President had
submitted the bill without sufficient coordination with Congress, and on April 10 the
House voted to make key procedural rules for expedited consideration inapplicable to
the legislation (H.Res. 1092). A federal appeals court held in 2001 that the issue of
whether the NAFTA should have been approved as a treaty was a nonjusticiable political
question; the U.S. Supreme Court denied review. This report will be updated.
Statutory Authority for Trade Agreements. The broad-gauged trade
agreements entered into by the United States in the 1990’s — the North American Free
Trade Agreement (NAFTA), the World Trade Organization (WTO) Agreement, and the
multilateral WTO agreements that a country must accept as a condition of WTO
membership — were negotiated by the President and submitted to Congress under the

terms of the Omnibus Trade and Competitiveness Act of 1988 (OTCA) and the Trade Act
of 1974. The OTCA provided the President with authority to negotiate and enter into
tariff and nontariff trade barrier (NTB) agreements until June 1, 1993, authority that was
later extended to April 15, 1994, in order to complete the GATT Uruguay Round (P.L.
100-418, § 1102, 19 U.S.C. § 2902, as amended by P.L. 103-49). The OTCA also
provided that NTB agreements negotiated under the statute could not enter into force for
the United States unless, among other things, the agreements were submitted to Congress
along with an implementing bill and the bill was enacted into law (P.L. 100-418, § 1103,
19 U.S.C. § 2903). Such legislation was entitled to so-called fast track or expedited
consideration; expedited procedures are set forth in § 151 of the Trade Act of 1974, 19
U.S.C. § 2191. Section 151(a) defines “implementing bill” as a bill that contains, inter
alia, a provision approving the trade agreement or agreements and, if changes to existing
laws are needed, provisions “necessary or appropriate to implement such trade agreement
or agreements, either repealing or amending existing laws or providing new statutory
authority.” It is the provision approving the agreement or agreements, once enacted, that
makes the Uruguay Round agreements, as well as the NAFTA, other free trade
agreements and earlier GATT-related agreements, congressional-executive agreements.1
Development of the Statutory Trade Agreements Program. The trade
agreement authorities and requirements embodied in the OTCA reflect a congressional2
approach to international trade policy that evolved over a number of years. As early as

1890, Congress delegated tariff bargaining authority to the President and authorized him

1 Note Canadian Lumber Trade Alliance v. United States, 425 F.Supp.2d 1321, 1359-63 (Ct. Int’l
Trade 2006), where the court distinguished between approval of a trade agreement, described as
an action “approving the United States’ international legal obligations specified by the
Agreement,” and the amendment of statutes to conform U.S. law to agreement obligations.
The negotiation, entry into, and implementation of trade agreements implicates the
President’s Article II authority to negotiate treaties and international agreements and to conduct
foreign affairs (see United States v. Curtiss-Wright Export Corp., 299 U.S. 319 (1936)) and
Congress’ express power to impose duties and tariffs and to regulate foreign commerce (U.S.
Const., Art. I, § 8, cls. 1, 3). Because of Congress’s express power in this area, the President
may not impose, reduce, or effect any other change in existing duty rates through an executive
agreement unless he has been delegated the authority to do so by Congress. See United States
v. Yoshida Int’l Inc., 526 F.2d 560, 572 (C.C.P.A. 1975)(“no undelegated power to regulate
commerce, or to set tariffs, inheres in the Presidency”)(emphasis in the original); Canadian
Lumber Trade Alliance, 425 F.Supp.2d at 1357 (“Indeed, when the President exercises authority
in regulating foreign commerce, he or she does so as Congress’ ‘agent.’”); United States v. Guy
W. Capps, Inc., 204 F.2d 655, 660 (4th Cir. 1953)(“Imports from a foreign country are foreign
commerce subject to regulation, so far as this country is concerned, by Congress alone.”).
Regarding the President’s authority to enter into agreements involving foreign commerce, see
Consumers Union of U.S., Inc. v. Kissinger, 506 F.2d 136 (D.C.Cir. 1974), cert. denied, 421 U.S.
1004(1975)(mandatory or enforceable, but not voluntary agreements limiting exports to the
United States are superseded by trade laws).
2 The use of the congressional-executive agreement in the trade area has been viewed as a
recognition of the House’s constitutional role in revenue raising. American Law Institute,
Restatement (Third) of the Foreign Relations Law of the United States § 303, Reporters’ Note
9 (1987). Senate deference to the use of the congressional-executive agreement for the Uruguay
Round agreements may arguably be inferred from its 76-16 vote to amend the OTCA to extend
the date by which the President could enter into the agreements pursuant to this statute, the yeas
constituting more than two-thirds of that body. 139 Cong. Rec. 14805 (1993).

to suspend existing duty-free treatment on particular items by proclamation. The Supreme
Court subsequently held that the authorizing statute, § 3 of the Tariff Act of 1890, 26 Stat.
612, did not unconstitutionally delegate either legislative or treaty-making authority to the
President.3 In the Reciprocal Trade Agreements Act of 1934, as amended and extended,
Congress authorized the President, for limited periods, to enter into reciprocal tariff
agreements with foreign countries and, within a designated range, to proclaim tariffs
needed to implement these agreements without subsequent congressional approval. This
authority was used to enter into numerous reciprocal trade agreements, to proclaim new
tariffs as a result, and to enter into the General Agreement on Tariffs and Trade (GATT).
The President’s modification of tariffs under this statute was likewise held to be valid
under the Treaty Clause, federal courts having acknowledged that not all international
undertakings of the United States are concluded as treaties and that congressional-
executive trade agreements could find a constitutional basis in the joint exercise of
Congress’s tariff and commerce authorities and the President’s foreign affairs power.4
As GATT parties began to negotiate more extensively to eliminate nontariff trade
barriers in a number of areas, Congress enacted legislation that would both provide the
President with negotiating credibility and ensure that Congress carried out its
constitutional responsibilities regarding legislative implementation of the agreements.
Since NTB agreements could address a variety of regulatory matters (e.g., subsidies,
government procurement, product standards), these agreements might require more
elaborate changes in federal law than tariff agreements, which for the most part could be
implemented through a pre-authorized presidential proclamation reducing tariffs on
particular items. In contrast, if legislation were needed to implement NTB agreements,
Congress could choose not to vote on such legislation or could add amendments that
might be viewed as inconsistent with agreement obligations. At the same time, overly
broad delegations of authority to the President to implement NTB agreements or
legislative vetoes of executive implementing actions might not comport with
constitutional requirements regarding the passage of legislation. In the Trade Act of 1974,
Congress provided the President with new authority to negotiate multilateral trade
agreements for a limited period of time, allowing him to proclaim certain tariff reductions

3 Field v. Clark, 143 U.S. 649 (1892). In denying a motion for a temporary restraining order
against tariff reductions on electronic equipment, the U.S. Court of International Trade ruled that
plaintiffs were unlikely to prevail in their argument that the tariff proclamation authority used
was an unconstitutional delegation of legislative authority. Kemet Electronics Corp. v.
Barshefsky, 969 F.Supp. 82, 86 (Ct. Int’l Trade 1997). While the court viewed the principles by
which the President was to be guided as “allow[ing] a great deal of discretion,” it did not find
them to be “unintelligible.” Id. at 86; see also Kemet Electronics Corp. v. Barshefsky, 976
F.Supp. 1012, 1019 (Ct. Int’l Trade 1997)(motion for preliminary injunction denied). The statute
at issue was § 111(b) of the Uruguay Round Agreements Act, 19 U.S.C. § 3521(b), under which
the President could modify tariffs in order to implement certain trade agreements whose
negotiation had begun but had not concluded during the Uruguay Round provided he first consult
with Congress. The President proclaimed WTO-agreed tariff reductions on information
technology, distilled spirits, pharmaceuticals, and chemical products under this authority. Pres.
Proc. 7011, 62 Fed. Reg. 35909 (1997); Pres. Proc. 6982, 62 Fed. Reg. 16039 (1997).
4 Star-Kist Foods, Inc. v. United States, 169 F.Supp. 268 (Cust. Ct. 1958), aff’d 275 F.2d 472
(C.C.P.A. 1959). See generally Congressional Research Service, Treaties and Other
International Agreements: The Role of the United States Senate; A Study Prepared for the Senate
Comm. on Foreign Relations 76-86 (2001)(S. Prt. 106-71).

and modifications but requiring him to submit NTB agreements to Congress, which would
vote on their approval and on legislation necessary or appropriate to implement them.5
Because of the complexities of multilateral negotiation, Congress sought to provide the
President with a sound negotiating posture by providing that it would consider trade
agreement implementing legislation submitted under the terms of the statute (including
requirements that the President notify and consult with Congress) within a prescribed
period of time and without amendment.6 To this end, § 151 of the act sets out procedural
rules according an introduced bill expedited consideration and ensuring a final floor vote.
The fast-track procedure in the 1974 Act was first used with respect to the GATT
Tokyo Round Agreements, which were approved and implemented in 1979 (P.L. 96-39).
Temporary statutory authority for bilateral free trade agreements (FTAs) was added in the
Trade and Tariff Act of 1984 (P.L. 98-473, § 401) and was again provided for in the
OTCA. Congress approved bilateral FTAs with Israel and Canada, the NAFTA, and the
GATT Uruguay Round agreements under one or the other of these authorities (P.L. 99-47,
P.L. 100-449, P.L. 103-182, P.L. 103-465). The FTA with Jordan was statutorily
implemented in 2001, though not under a fast-track authorizing statute and without an
express approval provision (P.L. 107-43).
Renewed trade negotiating authority was granted the President in Title XXI of the
Trade Act of 2002, P.L. 107-210. Expedited approval procedures apply to implementing
bills for trade agreements entered into before July 1, 2007; the President was also required

5 Modifying an Administration proposal, the House in 1973 approved legislation that would have
authorized the President to negotiate tariff and nontariff barrier (NTB) agreements for a given
period. Once the agreements were concluded, the President would submit them to Congress
along with any needed draft implementing orders and proclamations. The agreements and orders
and proclamations would become law (thus superseding inconsistent prior statutes) provided
neither House had passed a resolution of disapproval by majority of those present and voting
within 90 days. See H.Rept. 93-571, at 6, 23-34, 41-42. The Senate, whose Finance Committee
viewed the veto approach to be of doubtful constitutionality, prevailed in the adoption of the
current requirement for two-House legislative approval of NTB agreements and enactment of
implementing legislation on a fast-track basis. See S.Rept. 93-1298, at 14-15, 22, 76, 107.
Objections to the one-House veto procedure had also been raised earlier in dissenting views in
the House report. H.Rept. 93-571, at 199. The Supreme Court eventually held legislative vetoes
unconstitutional in Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983).
6 S.Rept. 93-1298, at 77, 107. While these agreements could be submitted to the Senate as
treaties (see H.Rept. 93-571, at 24; S.Rept. 93-1298, at 86), neither the agreements nor their
implementing legislation would be entitled to expedited legislative consideration. Moreover,
while the House would have a role in approving any implementing legislation, it would not
expressly approve the agreements, that is, it would not vote on whether the United States should
accept the international obligations therein. The United States has assumed trade obligations in
treaties, specifically its bilateral friendship, commerce and navigation (FCN) treaties, which
require parties to accord most-favored-nation tariff treatment and other trade benefits to each
other’s goods. With the conclusion of many bilateral tariff agreements under reciprocal trade
agreements legislation, the development of GATT agreements, and the entry by the United States
into WTO and free trade agreements, trade obligations between the United States and its trading
partners are now primarily defined by these more recent undertakings.

to notify Congress at least 90 days before he entered into an agreement.7 Title XXI
procedures have been used to approve FTAs with Chile, Singapore, Australia, Morocco,
Bahrain, and Oman, as well as the Dominican Republic-Central America-United States
FTA (DR-CAFTA). The Administration also entered into FTAs with Peru, Colombia,
Panama, and South Korea, and had been negotiating other FTAs as well as multilateral
agreements in the WTO Doha Round, before Title XXI authorities expired.8
Implementing legislation for U.S.-Peru agreement was signed into law in December 2007
(P.L. 110-138); agreements with Colombia, Panama, and South Korea remain pending.
Although implementing legislation for the U.S.-Colombia agreement (H.R. 5724) was
introduced April 8, 2008, House leadership considered that the President had submitted
the bill without sufficient coordination with Congress,9 and on April 10 the House voted
224-195 to make rules in § 151 of the Trade Act of 1974 for automatic committee
discharge, the deadline for a vote on final passage, and motions to proceed to House floor
consideration inapplicable to the legislation (H.Res. 1092). Implementing bills have not
been introduced for the remaining two agreements; the 2002 act does not require that
legislation for an FTA entered into before July 1, 2007, be submitted by a given date.
Constitutionality of the Congressional-Executive Trade Agreement:
Judicial Views. The question whether trade agreements could constitutionally be
entered into as congressional-executive agreements rather than treaties emerged during
consideration of Uruguay Round implementing legislation. The question originally was
posed because of the perceived effect of the agreements on states.10 The issue also arose
in a judicial challenge to the NAFTA, in which it was alleged that the failure to use the
treaty process rendered the Agreement and its implementing legislation unconstitutional.
In Made in the USA Foundation v. United States, an Alabama federal district court held
in July 1999 that “the President had the authority to negotiate and conclude NAFTA
pursuant to his executive authority and pursuant to the authority granted to him by
Congress in accordance with the terms of the Omnibus Trade and Competitiveness Act
of 1988 ... and section 151 of the Trade Act of 1974 ... and as further approved by the

7 The procedures, referred to in the Trade Act as “trade authorities procedures,” originally applied
to bills for agreements entered into before July 1, 2005, but could be extended to bills for
agreements entered into before July 1, 2007, if the President requested an extension and neither
House of Congress adopted an extension disapproval resolution before July 1, 2005. P.L. 107-
210, § 2103(c), as amended, 19 U.S.C. § 3803(c). No such resolution was voted upon. The
President’s authority to negotiate and enter into agreements addressing both tariffs and nontariff
barriers is set out at § 2103(b) of the act, 19 U.S.C. § 3803(b).
8 For further information on pending agreements and negotiations, see CRS Report RL33463,
Trade Negotiations During the 110th Congress, by Ian F. Fergusson, and the USTR website:
9 Bush Sends Up U.S.-Colombia FTA Bill; House Speaker Seeks Timetable Change, 25 Int’l
Trade Rep. 510 (April 10, 2008).
10 See “Special Report,” Inside U.S. Trade, July 22, 1994. Legal arguments and discussion may
be found in “Memorandum to Ambassador Michael Kantor, U.S. Trade Representative, from
Walter Dellinger, Assistant Attorney General, Office of Legal Counsel, re: Treaty Ratification
of the GATT Uruguay Round: Additional Memorandum” (November 22, 1994)
[http://www.usdoj.gov/olc/1994opinions.htm]. See also S. 2467, GATT Implementing
Legislation: Hearings before the Senate Comm. on Commerce, Science, and Transportation,

103d Cong., 2d Sess. 285-381 (1994).

[NAFTA] Implementation Act.”11 In the court’s view, the Foreign Commerce Clause,
combined with the Necessary and Proper Clause and the President’s Article II foreign
relations power, provided a constitutionally sufficient basis for agreement. The court
preliminarily held that institutional, but not individual plaintiffs, had standing to sue, and
that the political question doctrine did not bar it from ruling on the merits.
On appeal, the U.S. Court of Appeals for the Eleventh Circuit, while agreeing that
appellants had standing, held that the issue of whether an international commercial
agreement such as the NAFTA is a treaty that must be approved by two-thirds of the
Senate was a nonjusticiable political question.12 The court dismissed the appeal and
remanded to the district court with instructions to vacate. The Supreme Court denied
certiorari (534 U.S. 1039 (2001)). Under the political question doctrine, a court will
decline to rule on the merits if it finds that the underlying matter is committed to the
discretion and expertise of the legislative and executive branches. In the case at hand, the
court applied a tripartite inquiry that it said was suggested by Justice Lewis Powell in
Goldwater v. Carter, 444 U.S. 996 (1979), a distillation of criteria for determining
justiciability originally identified in Baker v. Carr, 369 U.S. 186 (1962). The three
questions posed by the court were: “(i) Does the issue involve resolution of questions
committed by the text of the Constitution to a coordinate branch of government? (ii)
Would resolution of the question demand that a court move beyond judicial expertise?
(iii) Do prudential considerations counsel against judicial intervention?”
Regarding the first question, the court stated that “with respect to commercial
agreements, we find that the Constitution’s clear assignment of authority to the political
branches of the Government over our nation’s foreign affairs counsels against an intrusive
role for this court in overseeing the actions of the President and Congress in this matter,”
pointing to the “vast” express constitutional grants of power conferred upon the political
branches in foreign affairs and commerce, and the Supreme Court’s long-standing
recognition of the power of the political branches to conclude “agreements that do not
constitute treaties in the constitutional sense.” Regarding the second question, the court
concluded that a ruling on the merits would require it to consider areas beyond its
expertise, noting, inter alia, that the Treaty Clause did not set forth circumstances under
which Clause procedures must be followed when approving international commercial
agreements, and that having to determine the “significance” of an international agreement
as the key factor in determining whether it should be a treaty or not would “unavoidably
thrust [the court] into making policy judgments of the sort unsuited for the judicial
branch.” As for the third question, the court cited, inter alia, the need for the nation to
speak with uniformity in the area of foreign affairs and commerce, and the fact that a
judicial order declaring the NAFTA invalid “could have a profoundly negative effect on
this nation’s economy and its ability to deal with other foreign powers,” noting that such
an order “would not only affect the validity of NAFTA, but would potentially undermine
every other major international commercial agreement made over the past half-century.”

11 Made in the USA Foundation et al. v. United States, 56 F.Supp.2d 1226 (W.D.Ala. 1999).
Note also Ntakirutimana v. Reno, 184 F.3d 419 (5th Cir. 1999), cert. denied, 528 U.S. 1135
(2000), where the court upheld U.S. entry into the 1995 extradition agreement between the
United States and the International Criminal Tribunal for Rwanda by means of a congressional-
executive agreement rather than by treaty.
12 Made in the USA Foundation et al. v. United States, 242 F.3d 1300 (11th Cir. 2001).