Participation of the State Department in Producer-Consumer Fora and Other International Negotiations Aimed at Stabilizing International Commodity Markets ( 1978 )

October 6 , 1978
78-55 MEMORANDUM OPINION FOR THE ASSISTANT
ATTORNEY GENERAL, ANTITRUST DIVISION
The President— Authority to Participate in
International Negotiations— Trade Act of 1974
(19 U .S.C . § 2101)— Participation in Producer-
Consumer Fora
You have requested our views on two questions presented by the State
Department’s participation in “ producer-consumer fora” and certain other
international negotiations aimed at stabilizing international commodity mar­
kets. The first question is whether the President, through the Secretary of State,
has authority to participate in such negotiations absent statutory authorization.
The second question is whether the Trade Act of 1974 (See 19 U.S.C. § 2101 et
seq.) authorizes or permits such participation.
It is our opinion (1) that the President has constitutional authority to
participate in negotiations of this kind through the Secretary of State, and (2)
that the Trade Act of 1974 does not prohibit such participation. We should add,
however, that the question of the President’s authority in that regard is quite
distinct from the question whether any agreement or recommendation accepted
by the President or the Secretary of State would have any effect under the law
of the United States. We understand that your principal concern is with the
impact of these agreements under the antitrust laws. Because there is consider­
able uncertainty regarding the legal effect of naked executive agreements
generally, legislation prescribing this impact may be desirable as a matter of
policy.
I. The Background
The facts are as follows: A producer-consumer forum (PCF) is an
intergovernmental body convened for the purpose of making recommendations
or agreements concerning international trade in particular commodity markets.
Representatives of private industry are in attendance, but their official role is
limited to rendering advice to Government delegates. Recommendations or
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agreements reached at a PCF are made by and among the government delegates
and are submitted for implementation to each member government. Member
governments and private parties within member countries are not bound by
these recommendations or agreements. Whenever a government agrees with a
PCF recommendation, it may take informal, nonmandatory action to imple­
ment the recommendation. This action would normally be directed at the
affected industry within that country. Formal implementation by treaty or
legislation is uncommon. As a matter of practice, the United States takes no
steps, either formal or informal, to implement PCF recommendations or
agreements within the United States.
II. The Constitutional Issue
Since the founding of our Nation the President and his representatives have
engaged in negotiations with representatives of foreign countries over matters
of national and international concern. Many of these negotiations have
produced formal or informal agreements, and many have never been submitted
to the Senate for approval under the treaty clause or to the full Congress for
implementation or approval by statute or joint resolution. See L. Henkin,
Foreign Affairs and the Constitution 173 (Foundation Press 1972).
The legal status of executive agreements that have not been authorized or
approved by Congress or by the Senate under the treaty clause is a subject of
considerable complexity, but we think there can be no real argument over the
threshold issue: The President and his representatives have authority to engage
in international negotiations on any subject that has bearing on the national
interest, even in the absence of prior statutory authorization. The source of this
negotiating authority is the Constitution itself. Negotiation is a necessary part
of the process by which foreign relations are conducted, and the power to
conduct foreign relations is given to the President by the Constitution.1 ,
The real question in any given case is whether and to what extent the
President’s action in negotiating or concluding an international agreement
affects the law of the United States, the legal obligations or powers of the
United States, or the rights of its citizens or other persons subject to Federal
law. In the absence of prior statutory authorization, the answer to this question
turns in large part upon the procedures that are followed after an international
agreement has been concluded. If the agreement is submitted to the Senate for
'In d eed , quite apart from the question o f authorization, we think it doubtful that the President’s
pow er to negotiate with foreign governm ents over subjects o f national concern can ever be subject
to unqualified restriction by statute. The President can m ake treaties on virtually any subject, and
treaties can supplant prior statutes. See, Cook v. United States 288 U .S . 102 (1933). W e think it
follows that Congress could not m ake it unlawful for the President to conclude treaties on particular
subjects (even on subjects within the legislative jurisdiction o f C ongress), or to participate in the
antecedent negotiations. M oreover, we think it doubtful that C ongress could make the legality o f a
particular negotiation depend upon the subm ission o f any resulting agreem ent to the Congress or to
the Senate under the treaty clause. See. United Stales v. Curtiss-Wright Export Corp., 299 U .S.
304, 319 (1936) (C ongress "p o w e rle ss” to invade field o f international negotiation).
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approval under the treaty clause, it becomes a law of the United States upon the
approval of two-thirds of the Senators present; and, as a matter of municipal
law, it then has the same force and effect as an act of Congress if it is
self-executing. If the agreement is submitted to the full Congress and is
approved by joint resolution or is implemented by statute, it is likewise entitled
to the force and effect of an act of Congress to the extent of the approval or
implementation.
Finally, if the agreement is approved neither by the Senate (as a treaty) nor
by the Congress (through joint resolution or statute), it may yet have some legal
effect, depending on the subject matter, see, United States v. Belmont, 301
U.S. 324 (1937). But here we encounter a series of problems for which, as
Professor Henkin has said, there is no real legal solution. As a matter of
domestic law the legal effect of a naked executive agreement is uncertain. On
the negative side, in one of the few cases on this subject the Fourth Circuit held
that in the face of a valid, conflicting statute a naked executive agreement can
have no force or effect as a law or obligation of the United States. United States
v. Guy W. Capps, Inc. 204 F. (2d) 655 (4th Cir. 1953) (Parker, J.), a jf d on
other grounds, 348 U.S. 296 (1955).
The agreements or recommendations made as a result of the negotiations
conducted in a PCF do not purport to be self-executing or binding on the parties
themselves or on the private participants. The participating governments are
free to take whatever action they wish to implement the recommendations or
agreements. The United States generally takes no action, formal or informal, to
implement them. In accordance with the principles we have just described, we
think that the President, through the Secretary of State and his representatives,
has constitutional authority to participate in PCF negotiations. The fact that the
President does not elect to submit the ensuing agreements to the Senate or the
Congress for approval does not in our judgment deprive him of such
negotiating authority.2 Under both the agreements and the Constitution, the
President is free to decide what implementing action, if any, he will take. The
legal effect of these agreements or actions taken pursuant to them upon public
or private rights or liabilities under the antitrust laws will depend largely on
those laws. To the extent that this impact is determined by the status of these
agreements as laws or obligations of the United States, we think there is
substantial doubt that agreements of this kind can be regarded as laws or
obligations of the United States absent implementing legislation or approval
under the treaty clause.
2W e are supported in this conclusion by Consumers Union o f U .S., Inc. v. Kissinger, 506 F. (2d)
136 (D .C . Cir. 1974), which is very nearly in point. W e express no opinion on the question
whether any "ag reem en t” concluded pursuant to PCF negotiations is an "international agreem ent”
in the Case Act sense. See I U .S .C . § 112b.
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III. The Statutory Issue
You asked whether the Trade Act of 1974 authorizes or permits the President
to participate in PCFs through the Secretary of State. Since we have already
concluded that the Constitution provides a source of negotiating authority, this
question is significant only if Congress, by enacting the Trade Act of 1974,
preempted the field and provided, through legislation, the exclusive means by
which negotiations of this kind may be conducted.
As noted above, we believe that there may be a constitutional limitation on
the power of Congress to restrict the power of the President to negotiate with
foreign governments over matters of national concern. For that reason alone,
we would be very reluctant to construe an act of Congress as an attempt to
dictate in advance either the mode of an international negotiation or the criteria
for ultimate agreement. The legal force of a particular international agreement
may depend upon the presence or absence of congressional authorization; but,
as a matter of constitutional principle, the President must be free to negotiate
agreements in his conduct of foreign affairs and to subject them to ratification
or legislative implementation if he wishes them to have a desired force or effect
under our law.
In any case, we do not construe the Trade Act of 1974 as an attempt to
prevent the President from engaging in informal, nonbinding negotiations such
as those involved in a PCF. The Act provides a mechanism for negotiation and
administrative action with respect to many trade-related questions, including
the ones dealt with in PCFs. In addition, the Act gives the President powers that
he clearly would not have in the absence of some congressional authorization
(see, e .g ., 19 U.S.C. § 2253) (power to increase duties on imported articles
causing serious competitive injury to domestic industry). It is plain that if the
President wishes to exercise the specific powers conferred by the Act, he must
do so pursuant to the procedures and in accordance with the standards
prescribed in the Act. But we find no intent to restrict Presidential participation
in international negotiations leading to recommendations which do not bind the
United States and do not purport to have the force and effect of law. See,
Consumers Union o f U.S. Inc. v. Kissinger, supra.
Larry A. Ham m ond
Deputy Assistant Attorney General
Office o f Legal Counsel
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