Appointments Clause Problems In TheDispute Resolution Provisions Of The UnitedStates-Canada Free Trade Agreement

This essay deals with the constitutionality of the alternatives to judicial review that are included in the United States-Canada Free Trade Agreement(1) and its enabling legislation.(2 When the matter was pending before Congress, the principal focus of the debate was on the constitutionality of the denial of the right to judicial review and of the legality of an international arbitral tribunal which decided trade disputes.(3) In my view, this scheme does not present the right to judicial review because the persons objecting to the legislation will have prevailed below and therefore will not be the ones who are "denied" judicial review. Moreover, if the legislation simply denied judicial review to everyone, or required all disputes to be arbitrated in the first instance, there would be no substantial constitutional objections. But there is another issue that received very little attention in the debates upon which this essay will focus: The Appointments Clause problems with the alternatives to judicial review under the Agreement.(4)Stated simply, my proposition is that the United States-Canada dispute resolution provisions permit persons who are not officers of the United States, and who are not appointed under the Appointments Clause, to overrule federal officials who are officers of the United States. These persons overrule federal officials on the grounds that the officials did not follow United States law as construed by persons who are not officers of the United States. No other law gives such sweeping powers to private citizens to perform what is, in effect, a kind of judicial or administrative review of the decisions of federal officers. Not only does that scheme violate principles of representative government and democracy, but it also violates the Appointments Clause.In order to understand what the United States-Canadian dispute resolution does, it is necessary to explain briefly the two statutes that it affects--the antidumping and countervailing duty laws.(5) Stated simply, both statutes are international fair trade laws, designed to prevent foreign businesses and their United States associates from competing unfairly with United States concerns. Under the antidumping laws, the unfair competition arises in the form of sales by foreign companies at prices in the United States below the prices charged at home(6) (i.e., the companies are "dumping" goods in the United States) either to get rid of surplus or to drive out United States competitors, or both. The antidumping laws are intended to remedy unfair competition by making importers pay penalties(7) to offset the cut-rate pricing. The money goes into the United States Treasury, but the effect is to alter the pricing decisions of importers by forcing them to increase their prices in order to avoid paying the penalties. Then, because of the higher prices, United States companies can compete with foreign producers.Countervailing duties operate in a similar way except that they attack government subsidies provided to foreign companies that give them unfair advantages when competing with United States producers.(8) Again, the United States competitor will normally trigger the complaint(9) and the competitor pays money to the United States Treasury, but the real benefit accrues to United States competitors in the form of altered (and presumptively more fair) pricing mechanisms.Proceedings under both statutes are quite formal. A hearing on the record is held before an administrative law judge,(10) and the decision is made by the six members of the United States international Trade Commission who are appointed by the President with the advice and the consent of the Senate.(11) Under both laws, except as modified by the United States-Canadian trade treaty, losing parties have the right to seek judicial review.(12) This review ultimately reaches the United States Court of Appeals for the Federal Circuit which is composed of Article III judges whom the President appoints and the Senate confirms in accordance with the Appointments Clause. …