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COMMITTEE ON INTERNATIONAL RELATIONS
CLEMENT J. ZABLOCKI, Wisconsin, Chairman
L. H. FOUNTAIN, North Carolina
STEPHEN J. SOLARZ, New York
HELEN S. MEYNER, New Jersey
DON BONKER, Washington
GERRY E. STUDDS, Massachusetts
ANDY IRELAND, Florida
DONALD J. PEASE, Ohio
ANTHONY C. BEILENSON, California
WYCHE FOWLER, JR., Georgia 1
E (KIKA) DE LA GARZA, Texas
GEORGE E. DANIELSON, California
JOHN J. CAVANAUGH, Nebraska
WILLIAM S. BROOMFIELD, Michigan
ROBERT J. LAGOMARSINO, California
JOHN J. BRADY, Jr., Chief of Staff
SUBCOMMITTEE ON INTERNATIONAL ECONOMIC POLICY AND Trade JONATHAN B. BINGHAM, New York, Chairman
ANDY IRELAND, Florida WYCHE FOWLER, JR., Georgia 1 E (KIKA) DE LA GARZA, Texas BERKLEY BEDELL, Iowa 2 JOHN J. CAVANAUGH, Nebraska
CHARLES W. WHALEN, JR., Ohio PAUL FINDLEY, Illinois
R. ROGER MAJAK, Subcommittee Staff Director
1 Elected to the committee April 20, 1977. 2 Resigned the committee April 19, 1977.
MATERIAL SUBMITTED FOR THE RECORD
Dollar values of the agricultural goods imported by the nations against
EMERGENCY CONTROLS ON INTERNATIONAL
TUESDAY, MARCH 29, 1977
HOUSE OF REPRESENTATIVES,
COMMITTEE ON INTERNATIONAL RELATIONS,
SUBCOMMITTEE ON INTERNATIONAL
ECONOMIC POLICY AND TRADE,
The subcommittee met at 2:03 p.m. in room 2200, Rayburn House Office Building, Hon. Jonathan B. Bingham (chairman of the subcommittee), presiding.
Mr. BINGHAM. The Subcommittee on International Economic Policy and Trade will come to order.
Today this subcommittee opens a series of hearings on the Trading With the Enemy Act of 1917 entitled "Emergency Controls on International Economic Transactions."
Originally passed at the time of the country's entry into World War I "to define, regulate and punish trading with the enemy,' through usage and amendment the act has become one of the basic underpinnings of our foreign economic policy in time of peace as well as war. Although the vast powers conferred upon the President by this act have been a source of controversy for years, it has never been given a thorough review by Congress.
It is our intention that these hearings will constitute a broad review of the policies and procedures for the conduct of the Nation's international economic affairs. Since this is an important and complex subject, the hearings will extend over a period of several weeks and include both administration and public witnesses. Among the issues to be aired are the following:
(1) Is the Trading With the Enemy Act an adequate authority, as the administration contends, for the imposition of trade embargoes in time of peace? If not, what should replace it? As one possibility, I have introduced the Economic War Powers Act-H.R. 2382.
(2) Is the asset control authority of the Trading With the Enemy Act adequate for regulation of private bank lending to the developing nations, if such regulation should become necessary for reasons of foreign policy or national security, or is new legislation needed?
(3) Is the Trading With the Enemy Act an adequate authority for the exercise of transaction controls by our Government on foreign subsidiaries of U.S. companies in furtherance of our foreign policy and national security? If not, what authority would be adequate for those purposes and what should the purposes be?
(4) What procedures should be written into the law, perhaps along the lines of the War Powers Resolution, to insure a role for Congress
in the exercise of authorities currently provided for by the Trading With the Enemy Act?
The key operative part of the Trading With the Enemy Act is section 5(b), which authorizes the President broadly to regulate foreign exchange, credit, currency, securities or property transactions involving any foreign country or foreign national in time of war or national emergency declared by the President.
Pursuant to the provisions and the intent of the National Emergencies Act, passed last year, this subcommittee must report to the full International Relations Committee its recommendations for recasting section 5(b) as much as possible in a framework of standard, nonemergency legislation and for setting limits on whatever emergency authorities are retained.
I had originally intended to take testimony tomorrow from the two lead agencies involved in the exercise of authorities under section 5 (b) the Departments of State and the Treasury. However, in order to allow time for high level policy thinking on these issues, I have postponed appearance by those agencies until April 19 or 20, at which time I hope that Richard Cooper, Under Secretary of State for Economic Affairs, and Fred Bergsten, Assistant Secretary of the Treasury for International Affairs, will be available. We will hear public witnesses tomorrow, instead, and representatives of the Commerce and Justice Departments on Thursday.
May I ask at this time if there are any other opening statements? Mr. Whalen.
Mr. WHALEN. I have none, Mr. Chairman.
Mr. BINGHAM. Any members on this side?
Mr. BINGHAM. Today we are privileged to have three distinguished legal scholars to help introduce the subcommittee to the intricacies of the subject. We will hear first from Prof. Andreas F. Lowenfeld of New York University Law School, and formerly with the Office of Legal Adviser in the Department of State. I may say, also a neighbor of mine in my own community.
Then we will hear from Prof. Harold G. Maier of Vanderbilt University Law School, currently a Visiting Scholar at the Brookings Institution.
Our final witness will be Prof. Stanley D. Metzger of Georgetown Univerity Law Center, also formerly with the Legal Adviser's Office in the State Department.
I would like to ask the witnesses to deliver their statements consecutively, limiting themselves to about 20 minutes each, and then we will have plenty of time to question them as a panel.
STATEMENT OF PROF. ANDREAS F. LOWENFELD, NEW YORK
UNIVERSITY SCHOOL OF LAW
Andreas F. Lowenfeld, A.B. M.c.L. 1951 Harvard, LL.B. M.c.L. Harvard, 1955, U.S. Army 1955-1957; Private practice of law in New York, 1957-61; U.S. Department of State, Office of Legal Adviser: Special Assistant to the Legal Ad