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HomeArchiveU.S. Trade Pact’s Legal Asymmetry Criticized

U.S. Trade Pact’s Legal Asymmetry Criticized

SOME Costa Rican opponents of theCentral American Free-Trade Agreementwith the United States (CAFTA) are raisingred flags over the trade agreement’sapparent asymmetrical legal standing inthe United States and in Costa Rica.Under U.S. law, CAFTA, like otherbilateral and regional trade agreements theUnited States has signed, is not a treaty, butrather a congressional-executive agreement.Federal laws have the same legalstanding as trade agreements and, for thatmatter, international treaties.However, under Costa Rican law,CAFTA is an international treaty, and ifpassed would have a higher legal standingthan all domestic legislation. The rank ofinternational treaty is second only to thecountry’s Constitution.All Costa Rican legislation, except forspecific “non-conforming measures” mentionedin CAFTA, must be compatible withthe agreement.IN the United States, all federal legislation(including federal laws, internationaltreaties and trade agreements) is on thesame hierarchical level. Future federallaws enacted after CAFTA could even,under certain circumstances, contradictCAFTA, according to Joel Trachtman, professorof international law at the FletcherSchool at Tufts University in Boston,Mass. U.S. federal legislation is basedon the “last-in-time” rule. Under that rule,the most recent federal law to be enacted isthe first to be applied.This apparent asymmetry has outragedmany opponents of CAFTA, who cite it asanother reason why the trade pact is unfairand should be rejected.“This is a valid concern,” saidManrique Jiménez, an expert in CostaRican constitutional law and co-author of arecent book on discrepancies betweenCAFTA and the Costa Rican Constitution.“We are faced with an asymmetric legalreality.“One of the main principles of internationallaw is equality among the partiesthat sign a treaty, as independent states thatshare the same status on the internationalstage,” he explained. “Theoretically speaking,this equality exists, but in political andeconomic practice, it doesn’t.”TRACHTMAN says he believes theimportance of this difference is beingexaggerated.“It’s true that this distinction exists, butit doesn’t seem to bother any of our tradingpartners,” Trachtman told The Tico Times.“It’s highly unlikely that the United Stateswould violate its obligations in a way thatwould harm other CAFTA partners withoutoffering some form of legal remedy.“I think the critics focusing on this differenceas a reason for opposing CAFTA arepursuing the wrong kind of issue,” he said.The difference in the legal rank ofCAFTA in the United States and its rank inCosta Rica is based on differences in howtheir respective legal systems interpret andenforce international law.Costa Rica, along with most countriesin Latin America and continental Europe,possess a “monist” legal system, asopposed to a “dualist” one like the UnitedStates has.Under monist legal systems, there isonly one system of law, which containsboth international and domestic law. Afterbeing approved, an instrument of internationallaw becomes part of the country’slaws.Under dualist systems, there are twoessentially different legal systems thatcoexist side by side and operate in differentspheres of action – international anddomestic. As a consequence, internationallaw agreements are not necessarilyenforceable internally in countries withdualist systems.This, however, does not mean that suchcountries are exempt from fulfilling theirobligations under international treaties andagreements.Possessing a dualist system has notstopped the United States from entering theWorld Trade Organization (WTO), theNorth American Free-Trade Agreement(NAFTA) or bilateral trade agreements,Trachtman noted.TO pass in the United States, CAFTA,as congressional-executive agreement,requires approval by a simple majority inboth houses of Congress. Internationaltreaties, on the other hand, require a two thirdsmajority in the Senate and aren’tvoted on by the House.This distinction is made because tradeagreements have revenue and spendingimplications. Any government action withsuch implications requires the approval ofboth houses of Congress.However, the approval of a trade agreementis just as binding as the ratification ofan international treaty, according to ConnieVeillette, an analyst in Latin Americanaffairs for the Congressional ResearchService (CRS), who was in Costa Rica lastweek to take part in a seminar organized bythe Legislative Assembly and the U.S.Embassy.The next phase for CAFTA is its secondsigning, this time with the addition ofthe Dominican Republic (TT, May 28, July16). After the signing, the PresidentGeorge W. Bush will have 60 days to submitto Congress documentation on CAFTAthat mentions potential changes that mayneed to be made to U.S. laws.However, the President is not obligatedto introduce the CAFTA bill to Congress atany time (see sidebar).“THERE is no time limit on when thePresident has to introduce a trade agreementbefore the Congress,” Veilletteexplained. “It’s a political decision that isnot provided for in the law. It’s his prerogative.However, it’s almost certain CAFTAwon’t be submitted until after theNovember election.”Veillette said she could not predict theoutcome of CAFTA’s eventual vote. Shenoted that the outcome is far from decided,given that most legislators have not beenfollowing CAFTA and remain undecidedon the matter.“I believe most members of Congresshave not focused on the details and provisionsof CAFTA,” she explained. “Whilesome members are predisposed in favor oragainst trade, most don’t hold a firm opinion.”In the past, Central American tradeofficials and business leaders have saidthey would focus their pro-CAFTA lobbyingactivities on the “undecided majority oflegislators”, whom, they hope, can be convincedto support CAFTA.U.S. Legislative Process for Trade AgreementsPRESIDENT George W. Bush,through the Office of the U.S. TradeRepresentative (USTR), can negotiatetrade agreements through the Trade Act of2002, a revised version of the Trade Act of1974, commonly referred to as the “fast track”or Trade Promotion Authority (TPA).Congress can only approve or reject (notmodify) trade agreements negotiatedunder TPA.During the negotiating process, theUSTR is required to consult with theCongressional Oversight Group – a specialcommittee made up of high-rankingmembers of both Houses. The TPA willexpire in June 2005, although it can berenewed.Here’s the process a trade agreementsuch as the Central American Free-TradeAgreement with the United States(CAFTA) must go through:1) President submits bill of the tradeagreement to Congress.2) One day later, the bill must be introducedin the House and Senate by a memberfrom each chamber that will serve asits sponsor.3) The agreement will be sent to thecommittees in charge of studying it — theHouse Ways and Means Committee andthe Senate Finance Committee.4) The committees have 45 days tostudy the trade agreement. The bill is thensent to the floor to be voted on, regardlessof the committee’s findings.5) If the trade agreement calls for revenueprovisions, the Senate will have 15additional days to study it.6) Each chamber has 15 days to putthe trade agreement to vote. A maximumof 20 hours of debate (divided evenlybetween opponents and proponents) isallotted to discuss the agreement. Amotion to reduce the debate time can bepassed.7) A simple majority must approve thetrade agreement in both houses. TheHouse votes first, followed by the Senate.8) Since the agreements voted on bythe House and the Senate are identical,the agreement isn’t sent to the ConferenceCommittee.9) If approved by Congress, the agreementis sent back to the President, whocan sign or veto it.


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