Israel, Iran, and Saudi Arabia among others. He stated that these efforts worked toward discouraging the boycott by demonstrating the potential contribution of U.S. firms to their economies. He described Treasury Department policy as opposing any increased confrontation or alteration in the traditional U.S. policy of a free and open market for trade and investment, "in which capital flows are responsive to market forces unencumbered by governmental influence."

Charles W. Hostler, Deputy Assistant Secretary for International Commerce, expressed Commerce Department opposition to legislative proposals to prohibit U.S. firms from responding to boycott requests. He noted that when the Export Control Act of 1949 (63 Stat. 7) was extended by Congress on June 30, 1965, it was amended to include a statement that the policy of the United States is "(a) to oppose restrictive trade practices or boycotts fostered or imposed by foreign countries friendly to the United States; and (b) to encourage and request U.S. domestic concerns engaged in export to refuse to take any action or sign any agreement that would further such practices." He stressed that Congress had used the words "encouraged" and "requested" and had not "prohibited" firms from taking any action or supplying information that might have the effect of furthering boycott practices. The Department of Commerce, he said, supported that policy statement and believed that "American firms should not be restricted in their freedom to make economic decisions based on their own business interests, where no element of ethnic or religious discrimination in violation of U.S. law is involved." He noted that no other country had enacted or intended to enact antiboycott legislation. He urged that there be no change in the “antiboycott" provisions of the Export Administration Act (P.L. 91-184; 83 Stat. 841; 50 U.S.C. app. 2402).

Antonin Scalia, Assistant Attorney General, Department of Justice, discussed legal issues under civil rights and antitrust laws regarding the Arab boycott. He listed the following laws and regulations that might be applicable in dealing with the boycott:

(1) Regarding discrimination in employment: the Constitution itself; Executive Order 11478, prohibiting discrimination in the employment practices of Federal agencies; Title VII of the Civil Rights Act of 1964, but noting in particular § 703(e) and § 717; Executive Order 11246, containing Federal restrictions upon discrimination in private employment; the regulations of particular government agencies, for example, the regulations of the Federal Communications Commission, 47 CFR 21.307.

(2) Regarding discrimination in selection of contractors, Title VII and Executive Order 11246.

(3) Regarding discrimination by private firms in the treatment of customers, Title VI of the 1964 Civil Rights Act; Title II of the same, relating to public accommodations; and Title VIII of the 1968 Civil Rights Act, relating to housing.

(4) Regarding the Federal antitrust problem, the Sherman Act (15 U.S.C.1-7).

Mr. Scalia's statement contained the caveat that no Justice Department views were being expressed as to whether any reported incident with respect to the Arab boycott constituted a violation of law, but that such incidents were under investigation.

The Arab boycott list of American companies was published in The New York Times, Feb. 27, 1975, p. 16. President Ford's statement was issued as White House Press Release, Feb. 26, 1975. See also The New York Times, Feb. 27, 1975, p. 20, and statements released by Depts. of State, Treasury, Commerce, and Justice, respectively. Assistant Secretary Sober's statement may be found at Dept. of State Bulletin, Vol. LXXII, No. 1867, Apr. 7, 1975, pp. 451–453.

In a letter to Senator J. Glenn Beall, Jr., dated April 16, 1975, Ambassador Robert J. McCloskey, Assistant Secretary of State for Congressional Relations, explained the legal basis for U.S. application of most-favored-nation treatment to countries which enforce the Arab boycott against American firms. He pointed out that the United States grants most-favored-nation status by a blanket provision in U.S. law, by bilateral international agreements, and by multilateral agreements, particularly the General Agreement on Tariffs and Trade. The following is an excerpt from his letter:

Section 251 of the Trade Expansion Act of 1962 [19 U.S.C. 1881] provides that any duty or other import restriction or dutyfree treatment proclaimed in carrying out any trade agreement negotiated pursuant to U.S. law shall apply to products of all foreign countries. Exceptions to this statutory extension of the most-favored-nation principle include, among others, most Communist countries and countries found to be discriminating against American goods. As long as an Arab country enforces the boycott equally against all countries, it will not have engaged in the sort of discrimination against U.S. firms which would preclude its eligibility for Section 251 treatment.

The typical bilateral agreement provides that each party will automatically grant the other party any trade concession which the former gives to any third country. In other words, the agreement does not provide for the harmonization of the two parties' trade restrictions, but rather that each party will enjoy whatever trade advantages the other chooses to grant to any of

its trading partners. Thus an Arab country enforcing the boycott against firms of all countries would not be in violation of its MFN obligations to the U.S. for that reason alone.

Finally, the General Agreement on Tariffs and Trade (GATT) provides that each party will grant MFN privileges to all other parties. Israel and some Arab States that adhere to the boycott are parties. However, GATT contains a clause that exempts from the treaty's requirements any action taken by a party "which it considers necessary for the protection of its essential security interests . . . (iii) taken in time of war or other emergency in international relations" (Art. XXI(b)). The Arab States take the position that the boycott is within this exception, and maintain that application of the boycott equally against all countries does not conflict with their obligations under GATT.

The following Arab States that enforce the boycott have bilateral MFN agreements with the United States: Egypt; Iraq; Lebanon; Oman; Saudi Arabia; Syria; and Yemen Arab Republic. In addition, Egypt and Kuwait are parties to GATT; and as to Algeria, Bahrain, Qatar, United Arab Emirates and People's Democratic Republic of Yemen, GATT is being applied de facto.

Dept. of State File No. P75 0065-2378.

Chapter 11

ENVIRONMENTAL AND HEALTH AFFAIRS

81

Environmental Affairs

General Cooperation

The Department of State announced on March 27, 1975, that the Environmental Protection Agency had been designated as the U.S. information center in the global system established by the United Nations for speedy distribution of environmental data. The U.N. International Referral Service for Sources of Environmental Information was conceived at the 1972 Stockholm Conference on the Environment and has a central office at the headquarters of the U.N. Environment Program (UNEP) in Nairobi. Its worldwide network operates through national focal points in each participating country which coordinate efforts for identifying sources of environmental information. These sources are to be contributed to a computerized international directory compiled by UNEP. Pertinent sources from this data bank will be supplied upon request to researchers, scholars, managers, technicians and others who need them.

A committee established by the Department of State provides policy guidance for the service. In addition to the Environmental Protection Agency, Federal agencies represented on the committee are the Departments of Agriculture, Commerce, Health, Education and Welfare, Housing and Urban Development, Interior and State; the National Oceanic and Atmospheric Administration, the Council on Environmental Quality, the National Science Foundation, and the Library of Congress.

Dept. of State Bulletin, Vol. LXXII, No. 1869, p. 517.

Environmental Impact

On October 17, 1975, the U.S. District Court for the District of Columbia, in Sierra Club et al. v. Coleman and Tiemann, 405 F. Supp. 53, granted a preliminary injunction to halt construction action on the Darien Gap Highway through Panama and Colombia by the Department of Transportation and the Federal Highway

Administration (FHWA). The case arose under the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq., with the plaintiff environmental organizations claiming that the preparation and issuance of an "environmental impact assessment," circulated in draft by the FHWA and issued well after the Darien Gap project was underway, satisfied neither the procedural nor the substantive requirements of NEPA.

The Court agreed with the plaintiffs. It found three deficiencies in FHWA's compliance with NEPA requirements: (1) failure to circulate its assessment to the Environmental Protection Agency for its comments, as required by 42 U.S.C. 4332(C); (2) failure of the assessment to discuss adequately the problems of the transmission of aftosa, or "foot and mouth" disease; and (3) failure to disclose adequately possible alternatives to the route chosen for the highway, as required by 42 U.S.C. 4332(C)(iii).

Transfrontier Pollution

On October 22, 1975, the Governments of the United States and Canada formally requested the International Joint Commission, pursuant to Article IX of the Boundary Waters Treaty of 1909 (TS 548; 36 Stat. 2448; 12 Bevans 319), to examine and report upon the transboundary implications of the proposed completion and operation of the Garrison Diversion Unit in the State of North Dakota. They requested further that the Commission make recommendations to the Governments as to measures, including modifications, alterations or adjustments to the Garrison Diversion Unit, that might be taken to assist them in ensuring that the provisions of Article IV of the Boundary Waters Treaty are honored. Article IV provides in part that "boundary waters and waters flowing across the boundary shall not be polluted on either side to the injury of health or property on the other." The decision to refer the matter to the Commission was approved by all concerned U.S. Government agencies and by the Canadian Cabinet.

The Garrison Diversion, a large multipurpose water development project in North Dakota, was under construction by the Bureau of Reclamation. In February 1974, the U.S. Government formally assured the Canadian Government that the United States would comply with its obligation to Canada not to pollute water crossing the boundary to the injury of health or property within Canada and that no construction potentially affecting waters flowing into Canada would be undertaken unless it was clear that this obligation would be met. The reference to the Commission was the outcome of U.S.-Canadian negotiations on the