Mr. BINGHAM. In your proposal on page 20, No. 2, paragraph (c), presumably the control of exports of strategic or scarce goods and materials would be covered by the Export Administration Act itself Mr. WEISS. Yes. Mr. BINGHAM [continuing]. As we now have it reported out of this committee? Mr. WEISS. Yes; but my intent there, Mr. Chairman, was to suggest, at least for purposes of discussion, the passage of an act which would define in a broad way the President's authority to limit international commerce Mr. BINGHAM. I understand. Mr. WEISS [continuing]. So you would not have a Trading With the Enemy Act which would forbid him to do certain things and then the Export Administration Act which would allow him to do the same things. Mr. BINGHAM. I am sure you are aware that last October 1 the administration undertook to do everything provided for under the Export Administraion Act within the authority of the Trading With the Enemy Act. Mr. WEISS. Right, by proclamation. UNILATERAL AS COMPARED TO MULTILATERAL EMBARGOES Mr. BINGHAM. Mr. Nelsen, Mr. Weiss distinguishes between embargoes that are imposed unilaterally by the United States and those imposed by international bodies to which the United States is bound by treaty. You make no distinction in your testimony because you mention Rhodesia as a case in point. Don't you think there is a distinction? In one case it is the United States imposing the embargo and the other is a case where the United States is bound by treaty. Mr. NELSEN. There definitely is. But our actions toward Rhodesia were unilateral and a matter of U.S. policy. We have been importing chromium from Rhodesia-contrary to the international treaty-but we have now stopped. The point I was trying to make, though, was that if we want to hurt someone via trading, we should stop importing. Take the Middle East, we are not hurting them by not exporting to them. If our aim is to hurt some country, we should stop importing from them. On the other hand, regarding export embargoes, you should realize that there is a higher calling, and is there a right to withhold food from people needing food? It is a moral question to which I can't give you an answer. Mr. BINGHAM. Thank you. "NONWAR" EMERGENCIES Mr. WHALEN. Thank you, Mr. Chairman. Mr. Weiss, referring to your recommendations on page 20, as you interpret it, an "Enemy" is one with whom we are at war under the provisions of article 1, section 8 of the Constitution, is that correct? Mr. WEISS. That is correct. 89-711-77- -7 Mr. WHALEN. What about a situation, such as existed in Vietnam, where we were very much involved in a shooting affair and yet there was no declared war. Is it your opinion that the War Powers Resolution would take care of that in the future? Mr. WEISS. First, it is my opinion that that is a situation that should never have existed. We should not have been in that war without a declaration. The War Powers Resolution will to some extent take care of it and I thought about whether I ought to include the War Powers Resolution in my definition of the circumstances under which an embargo may be declared. I might have said the situation of declared war, or a war existing under the War Powers Resolution. I didn't say it because, frankly, I don't like the War Powers Resolution and I think, even though we have the War Powers Resolution, I think there is a case to be made for limiting the exercise of total Presidential controls on exports to situations of declared war. ECONOMIC WARFARE Mr. WHALEN. Supposing we engage in economic warfare in which, for example, another country expropriates private U.S. property without any repayment. Under your conclusions then, would the President be allowed to block that other nation's assets that are held in our country? Mr. WEISS. It is interesting that under that famous Massachusetts case, Kenshaw v. Kelsey, I think Justice Gray would have said, no. He would say trading with the enemy does not extend to the confiscation of enemy property located within the territory of another belligerent prior to the time of the outbreak of war. I can see how it might be necessary as a diplomatic weapon, but I think that the body of law which he cites-and he goes back quite a ways to the early English cases-would probably say, no, you couldn't do it. CLARIFYING "NATIONAL EMERGENCY" Mr. WHALEN. You know as you read section 5(b)—and I pointed this out to the other witnesses-it seems to me the law has two separate provisions. One applies during the time of war. I think that is very clear, it is very specific. The other applies during any other period of national emergency declared by the President. That could relate to a domestic emergency, such as I presume was the authority which President Roosevelt used in the thirties. My question is, then, would this be made simpler simply by deleting that second phrase? Mr. WEISS. I think a great deal, yes, and it would not necessarily keep the Congress from giving the President authority to act in a real emergency or prevent the Congress from exercising whatever inherent powers it might have. It is a question of whether you give the President that standby authority to begin with, because I think the record of the last 60 years has demonstrated in this case that it has been a very dangerous thing. The fact that you are not giving him standby authority doesn't mean you can't give him authority on very short notice. Mr. WHALEN. Would the other alternative be to clarify that and make it more specific? Mr. WEISS. If it could be done. I think all such efforts would be fraught with great danger. Mr. WHALEN. Thank you, Mr. Chairman. AGRICULTURAL EXPORTS AFFECTED BY TRADE EMBARGOES Mr. BINGHAM. Mr. Nelsen, do you have any figures as to the extent of agricultural exports that are affected by embargoes currently in effect? Mr. NELSEN. No; but I would be glad to get them for you. Mr. BINGHAM. We would appreciate it if you would try to do that. I think that would be helpful. [The information follows:] DOLLAR VALUES OF THE AGRICULTURAL GOODS IMPORTED BY THE NATIONS AGAINST WHOM THE UNITED STATES HAS IMPOSED EMBARGOES These figures represent total agricultural goods imported, including food and animals, crude materials (oilseeds, fibers, etc.), farm machinery, and fertilizer. If one-third to one-half of these imports could have come from the United States, it would have had a significant effect upon the U.S. agriculture industry and employment. Is it your position that an embargo should never be imposed in a situation short of declared war? Mr. NELSEN. Yes. Well, at least certainly for foodstuffs and nonstrategic materials. BLOCKING OF ASSETS Mr. BINGHAM. Now, in your response to Mr. Whalen, Mr. Weiss, I wasn't clear whether you were indicating what you considered the proper interpretation of the earlier court decisions or whether you were giving you own views when you said that you didn't feel that the U.S. Government should be given the authority to block a nation's assets if properties had been expropriated by that country without compensation. Mr. WEISS. That is the kind of situation I would prefer to see handled by the Congress on an ad hoc basis, simply because, again, in the experience of the last 30 or 40 years, there have been lots of situations of partial expropriation, partial nationalization, and I think it would be very dangerous to give the President standby authority to decide at what point a given act, or series of acts, by a foreign government constitutes "expropriation of American property" and justifies his blocking all assets of the foreign country. It is frequently not that clearcut a situation. Mr. BINGHAM. Any further questions? Mr. WHALEN. No, thank you, Mr. Chairman. Mr. BINGHAM. I want to thank you gentlemen for your testimony. The subcommittee stands adjourned. [Whereupon, at 3:08 p.m., the subcommittee was adjourned, subject to the call of the chair.] EMERGENCY CONTROLS ON INTERNATIONAL ECONOMIC TRANSACTIONS TUESDAY, APRIL 26, 1977 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERNATIONAL RELATIONS, SUBCOMMITTEE ON INTERNATIONAL ECONOMIC POLICY AND TRADE, The subcommittee met at 2:45 p.m. in room 225, Rayburn House Office Building, Hon. Jonathan B. Bingham (chairman of the subcommittee) presiding. Mr. BINGHAM. The subcommittee will be in order. This afternoon, in continuation of its hearings entitled "Emergency Controls on International Economic Transactions," on H.R. 1560 and H.R. 2382, the Subcommittee on International Economic Policy and Trade will hear from Hon. Julius L. Katz, Assistant Secretary of State for Economic and Business Affairs, and Hon. C. Fred Bergsten, Assistant Secretary of the Treasury for International Affairs. I would like to welcome you both to the subcommittee and recognize Mr. Katz first. STATEMENT OF HON. JULIUS L. KATZ, ASSISTANT SECRETARY FOR ECONOMIC AND BUSINESS AFFAIRS, DEPARTMENT OF STATE Julius L. Katz was sworn in Thursday, September 23, 1976, as Assistant Secretary of State for Economic and Business Affairs. Mr. Katz has been the senior Deputy Assistant Secretary of State for Economic and Business Affairs since April 1974. From July 1968 until April 1976 he was Deputy Assistant Secretary for International Resources and Food Policy-serving in a dual capacity from 1974-1976. Mr. Katz began his career with the Department of State in May 1950, holding several positions dealing with United States economic relations with the Soviet Union, Yugoslavia, Poland and other countries of Eastern Europe. He was designated Deputy Director of the Office of International Trade in November 1963, and was promoted to Director in August 1965. In this capacity, he was primarily concerned with the Kennedy Round of trade negotiations under the auspices of the General Agreement on Tariffs and Trade (GATT), and attended a number of meetings and working parties of the GATT. His responsibilities also included bilateral negotiations and legislative activities in the trade field. In August 1967, Mr. Katz was named Director of the Office of International Commodities. Secretary Kissinger presented Mr. Katz with the Department's highest award, the Distinguished Honor Award, in March, 1976. He also received the Department's Superior Service Award in 1965. Mr. Katz was born in New York City, March 9, 1925. He served with the U.S. Army in the European Theater of Operations from 1943 to 1945. He received his Bachelor of Arts degree from the George Washington University. Mr. Katz is married to the former Charlotte Friedman of Washington, D.C. They have three children: Barbara, Linda and Lawrence. |