Relationship of WTO Obligations to U.S. International Trade Law: Internationalist Vision Meets Domestic Reality

By Reed, Patrick C. | Georgetown Journal of International Law, Fall 2006 | Go to article overview

Relationship of WTO Obligations to U.S. International Trade Law: Internationalist Vision Meets Domestic Reality


Reed, Patrick C., Georgetown Journal of International Law


1. INTRODUCTION

This Article examines recent developments in the relationship between World Trade Organization (WTO) obligations and U.S. international trade law. (1) Even before the United States approved the WTO agreements, the effect of international trade agreements had already emerged as an issue in U.S. trade litigation in the context of pre-WTO General Agreement on Tariffs and Trade (GATT) agreements. At the time of this writing, more than eleven years after Congress approved the WTO agreements, the issue remains highly controversial.

The U.S. implementation of the WTO agreements, as well as the earlier GATT agreements, unquestionably represents a dualist model in which WTO agreements and decisions do not have direct effect in U.S. law. (2) The absence of direct effect begs the question of whether WTO agreements and decisions have an indirect effect, namely, as aids to interpreting the trade statutes. (3) The issue is usually described as the applicability of the Charming Betsy doctrine, which states "an act of Congress ought never to be construed to violate the law of nations if any other possible construction remains," (4) or, as set out in the Restatement (Third) of U.S. Foreign Relations Law, "[w]here fairly possible, a United States statute is to be construed so as not to conflict with international law or an international agreement of the United States." (5)

At least superficially, there appear to be two inconsistent lines of case law in U.S. courts. The first line of cases stems from the Federal Circuit's 1992 decision in Suramerica de Aleaciones Laminadas, C.A. v. United States, (6) which stated that "[t] he GATT does not trump domestic legislation; if the statutory provisions ... are inconsistent with the GATT, it is a matter for Congress and not this court to decide and remedy." This case law consistently rejects arguments seeking to have U.S. law interpreted to be consistent with WTO/GATT norms, sometimes implying that it is unnecessary to consider WTO/GATT norms. (7) The second line of cases stems from the Federal Circuit's 1995 decision in Federal Mogul Corp. v. United States, (8) which stated that "absent express Congressional language to the contrary, statutes should not be interpreted to conflict with international obligations." This case law evaluates

pertinent WTO/GATT obligations and ultimately interprets U.S. law to avoid a conflict with those obligations. (9) Furthermore, in 2005, a North American Free Trade Agreement (NAFTA) binational panel applying U.S. law ruled that a contested agency decision was unlawful solely because it conflicted with a WTO dispute settlement decision. (10) Most recently, the Federal Circuit's decision in Cummins Inc. v. United States (11) in July 2006 appears to hold that the status of international decisions is governed by a completely different legal standard from the Charming Betsy canon of interpreting statutes, if possible, to avoid conflicts with international obligations.

Commentary on the relationship of WTO obligations to U.S. law is also divided. One position offers an isolationist perspective and argues that U.S. law precludes considering whether or not a domestic statute or its interpretation is consistent with WTO/GATT norms. (12) The opposite position offers an internationalist perspective and argues that U.S. law requires U.S. statutes to be interpreted so as to be consistent with WTO/GATT norms unless Congress clearly intends otherwise, (13) or at least that the law should require WTO-consistent interpretations. (14) An intermediate position is that WTO/GATT agreements and decisions may be considered, but their significance is limited and WTO decisions by themselves are not sufficient to warrant overturning an agency's statutory interpretation. (15)

This Article argues that case law under the international trade statutes strongly supports the intermediate position. The U.S. courts generally exercise considerable judicial restraint, rarely overturning the responsible administrative agency's view of the extent to which the U. …

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