506 F.2d 136 (D.C. Cir. 1974)
OPINION BY: McGOWAN
… In the form eventually taken by the litigation
in the District Court, we consider that the only
question before us is whether the actions of
the Executive were a regulation of foreign commerce foreclosed to it generally
by Article I, Section 8, Clause 3 of the Constitution, and in particular by the
Trade Expansion Act of 1962. To the extent that the District Court
declared no such conflict to exist, we affirm its decision.
I
… After an initial showing of
interest by the foreign
producer associations, State Department officials entered into
discussions that lasted from June to December, 1968, and resulted in letters being sent to
the Secretary in which the Japanese and European producer associations stated
their intentions to limit steel shipments to the United States to specified
maximum tonnages for each of the years 1969, 1970, and 1971. During 1970,
domestic industry and union representatives urged the State Department to seek
renewal of the restraints beyond 1971 to provide greater time within which to
achieve needed changes, and the House Ways and Means Committee issued a report
to like effect. When various executive organs, such as the President's Council of
Economic Advisors, had made the same recommendation, the President directed the
Secretary to seek extensions of the limitation representations. Such extensions, covering
1972 through 1974, were forthcoming in letters dated early in May, 1972,
and announced by the President on May 6.
The two 1972 letters are substantially alike.
Each states the signatories' intention to limit exports of steel products to
the United States both in aggregate tonnage and, within such limits, in
terms of product mix. Each represents that the signatories "hold
themselves [itself] ready to consult with representatives of the United States
Government on any problem or question that may arise with respect to this
voluntary restraint undertaking" and expect the United States Government
so to hold itself ready. In addition, each states that its undertaking is based
on the assumptions that (1) the effect will not be to place the signatories at
a disadvantage relative to each other, (2) the United States will take no
unilateral actions to restrict exports by the signatories to the United States,
and (3) the representations do not violate United States or international
laws.
IV
We turn, then, to the District
Court's declaration that, in respect of the actions of the Executive
culminating in the undertakings stated in the letters of intent, "the
Executive is not preempted . . . and that there is no requirement that
all such undertakings be first processed under the Trade Expansion Act of
1962." That statute, as its name suggests, had as its principal purpose
the stimulation of the economic growth of the United States and the maintenance
and enlargement of foreign markets for its products.
This was to be achieved through trade agreements reached by the President
with foreign countries. Title II of the Act provided that, for a period
of five years (1962-67), the President was authorized to enter into such
agreements whenever he determined that any existing tariff duties or other
import restrictions of either the United States or any foreign country were
unduly burdening and restricting the foreign trade of the United States. Upon
reaching any such trade agreement, the President was delegated the unmistakably
legislative power to modify or continue existing tariffs or other import
restrictions, to continue existing duty-free or excise treatment, or to impose
additional import restrictions, as he determined to be necessary or appropriate
to the carrying out of the agreement. In
connection with the first two of these powers, the Tariff Commission was given
an advisory function, which included public hearings; and public hearings were
also directed to be held, by an agency designated by the President, in
connection with any proposed trade agreement.
Title III of
the Trade Expansion Act of 1962,
recognizing that domestic interests of various kinds may be adversely
affected by concessions granted under trade agreements, authorizes the making
of compensating adjustments of various kinds. Section 301 provides that the
Tariff Commission shall undertake investigations of injuries allegedly being
done to domestic businesses or workers by such things as increased imports
flowing from a trade agreement. After holding public hearings, the Tariff
Commission shall make a report to the President. If it affirmatively finds
injury to domestic industry, the President may under Section 351 increase or impose tariff duties or
other import restrictions, or alternatively he may under Section 352
negotiate agreements with foreign governments limiting the export from such
countries to the United States of the article causing the injury. If this
latter option is taken, the Act provides that the President is authorized to
issue regulations governing the entry or withdrawal from warehouse of the
article covered by the agreement.
The foregoing description of the Trade Expansion Act
of 1962 covers, among others, Sections 301 and 352. They are the only provisions expressly
identified in the amended complaint as constituting the allegedly preemptive
exercise by Congress of its constitutional power to regulate foreign commerce
that, so it is said, forecloses the actions of the Executive challenged in this
case. The description extends also to Sections 302 and 351, which are referred
to in plaintiff-appellant Consumers Union's brief, as is also Section 232, This
last is the so-called national security clause which provides that the
President shall not decrease or eliminate tariffs or other import restrictions
if to do so would impair the national security. The Director of the Office of
Emergency Planning is directed to investigate any situation where imports
threaten to impair the national security; and if he finds such threat, and the
President concurs, action shall be taken "to adjust the imports" of
the article in question, which means that the article may by regulation
be excluded from entry or withdrawal from warehouse.
What
is clear from the foregoing is a purpose on the part of Congress to delegate legislative power to the President for use by
him in certain defined circumstances and in furtherance of certain stated
purposes. Without such a
delegation, the President could not increase or decrease tariffs, issue
commands to the customs service to refuse or delay entry of goods into the
country, or impose mandatory import quotas. To make use of such
delegated power, the President would of course be required to proceed strictly in accordance with the
procedures specified in the statutes conferring the delegation. Where,
as here, he does not pretend to the possession of such power, no such
conformity is required.
The steel import restraints do not purport to be
enforceable, either as contracts or as governmental actions with the
force of law; and the Executive
has no sanctions to invoke in order to compel observance by the foreign
producers of their self-denying representations. They are a statement of intent
on the part of the foreign producer associations. The signatories'
expectations, not unreasonably in light of the reception given their
undertakings by the Executive, are that the Executive will consult with them
over mutual concerns about the steel import situation, and that it will not
have sudden recourse to the unilateral steps available to it under the Trade
Expansion Act to impose legal restrictions on importation. The President is not
bound in any way to refrain from taking such steps if he later deems them to be
in the national interest, or if consultation proves unavailing to meet
unforeseen difficulties; and certainly the Congress is not inhibited from
enacting any legislation it desires to regulate by law the importation of
steel.
The formality and specificity with which the
undertakings are expressed does not alter their essentially precatory nature insofar
as the Executive Branch is concerned. In effect the President has said
that he will not initiate steps to limit steel imports by law if the volume of
such imports remains within tolerable bounds. Communicating, through the
Secretary of State, what levels he considers tolerable merely enables the
foreign producers to conform their actions accordingly, and to avoid the risk
of guessing at what is acceptable. Regardless of whether the producers run
afoul of the antitrust laws in the manner of their response, nothing in the process leading up to the voluntary undertakings
or the process of consultation under them differentiates what the Executive has
done here from what all Presidents, and to a lesser extent all high executive officers,
do when they admonish an industry with the express or implicit warning
that action, within either their existing powers or enlarged powers to be
sought, will be taken if a desired course is not followed voluntarily.
The question of congressional preemption is simply not
pertinent to executive action of this sort. Congress acts by making laws binding, if valid, on their objects and
the President, whose duty it is faithfully to execute the laws. From the
comprehensive pattern of its legislation regulating trade and governing
the circumstances under and procedures by which the President is authorized to
act to limit imports, it appears quite likely that
Congress has by statute occupied the field of enforceable import restrictions,
if it did not, indeed, have exclusive possession thereof by the terms of
Article I of the Constitution. There is no potential for conflict, however,
between exclusive congressional regulation of foreign commerce -- regulation
enforced ultimately by halting violative importations at the border -- and
assurances of voluntary restraint given to the Executive. Nor is there
any warrant for creating such a conflict by straining to endow the voluntary
undertakings with legally binding effect, contrary to the manifest
understanding of all concerned and, indeed, to the manner in which
departures from them have been treated. n12
In holding, as we do, that the District Court did not err in declining to characterize
the conduct of the Executive here under attack as in conflict with the Trade
Expansion Act of 1962, we are not to be understood as intimating
any views as to the relationship of the Sherman Act to the events in issue
here. The Sherman Act is not, as noted above, one of the regulatory statutes
charged as preempting the field, and the question of its possible substantive
applicability vanished from this case with the original complaint.
The declaration in the District Court's order with respect to antitrust
exemption is vacated, and the declaratory aspect of that order is confined to
the proposition that the State Department defendants were not precluded from
following the course they did by anything in the Constitution or Title 19 of
the U.S. Code. As so confined, the order appealed from is affirmed.
It is so ordered.