american import controls and morality an international trade: an analysis af section 307 of the...

8/6/2019 American Import Controls And Morality An International Trade: An Analysis Af Section 307 Of The Tariff Act Of 1930

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"American Import Controls and Morality in International Trade:An Analysis of Section 307 of the Tariff Act of 1930"

Originally published in theNew York University Journal of International Law &Politics,

Volume 8, Number 1, Spring 1975, pp. 19-38by Christopher S. Armstrong

1974 by New York UniversityCite as N.Y.U.J. Int'I L.&Pol.

All Rights Reserved

Law Offices of Christopher S. Armstrong, A Professional CorporationTwo Embarcadero Center, Suite 1650San Francisco, CA 94111Telephone: 415-788-5010Facsimile: 415-788-5013Email: [email protected]
mailto:[email protected]:[email protected]


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AMERICAN IMPORT CONTROLSAND MORALITY IN INTERNATIONAL TRADE:

AN ANALYSIS OF SECTION 307 OF THETARIFF ACT OF 1930

CHRISTOPHER S. ARM5TRONG*American lawmakers have frequently used international trade

in an attempt to induce or compel foreign governments to embraceAmerican concepts of social morality. By such means as broad Ii-censing requirements? limitations on eligibility for most-favored-nation treatment- and generalized trade preferences.s and restric-tions or prohibitions on imports! and exports," the Congress andAmerican administrative officials have manipulated the right of ac-cess to American markets and produce. The targets of this practice

"A.B. Yale University: J.D. Columbia University School of Law; Member of the~ew York Bar.I. The Export Control Act of 1949. Act of Feb. 26, 1949, ch. II. 63 Stat. 7,

was intended to restrict exports of materials in accordance with their potentialmilitary and economic significance. When the Act expired in 1969, it was re-placed by the Export Administration Act of 1969, 50 U.S.C. 2401-13 (1970),which states a policy to "use export controls. . . (B) to the extent necessary tofurther significantly the policy of the United States and to fulfill its internationalresponsibilities .... " 50 U.S.C. 2403 (2) (1970). for accompanying regulations.se e 15 C.F.R. 368-99 (1974) .The Trading with the Enemy Act. as amended, 50 U.S.C. 1-39 (1970).authorizes the President or his designee to regulate or prohibit all commercewith "enemy" nations during time of national emergency or war. Regulationsimplemented under this law include the Foreign Assets Control Regulations. 31C.F.R_ 500.101-500.B09 (1974), the Transaction Control Regulations, 31C.F.R. 505.01-505.60 (1974), and the Cuban Assets Control Regulations, 3JC.F.R. 515.101-515.809 (1974).

2. See Trade Act of 1974. Pub. L. 93-618 (Jan. 3, 1975) 4{)2 (emigrationpolicy of trading country tied to MFN treatment) [hereinafter "Trade Act of1974"].

3. 1


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20 IN TE RNAT IONAL L AW & POLITICS [VOL 1: 19presently include communist nations, racially repressive nations.fpopPy growing countries? and members of cartels."In recent months the decision of the U.S. Senate to tie most-favored-nation treatment for the Union of Soviets Socialist Repub-lics to free emigration for its citizens has am-acted considerableartention.? Less widely publicized, but perhaps equally as provoca-tive as the hotly debated J ackson-Vanick Amendment,'? has beenthe effort by the United Mineworkers of America (UMW) and theAttorney General of the State of Alabama to invoke Section 307 ofthe Tariff Act of 193011 to prevent the importation into the UnitedStates of low sulphur bituminous coal mined in the Republic ofSouth Africa12

6. See note 4 supra.7. Trade Act of 1974, supra note 2. ~ 502 (b) (5) authorizes the President todeny trade preferences to developing countries which fail to "take adequate stepsto cooperate with the United States to prevent narcotic drugs and other con-

trolled substances .. from entering the United States unlawfully .... "8. Section 502 (b) (2) of the Trade Act of 1974, supra note 2, would likewise

permit the withholding of trade preferences to developing countries which partie-ipate in cartels which withhold supplies or raise prices of "viral commodityresources" to unreasonable levels. OPEC is named as such a cartel.Rather than persuade developing countries to abandon cartels, the TradeAct of 1974 will undoubtedly renew [he impetus for producers' cartels. TheVenezuelan finance Minister recently sought Brazilian support for a new organi-zation "to defend the prices of Latin American raw materials." At the same time,the Venezuelan Minister of Plaoning charged that the Trade Act of 1974 wasdesigned to hinder Latin America's industrial emancipation. N.Y. Times, Apr. L,1975, at 60, col. 2.

9. On January 14, 1975, the Soviet Union and the United States agreed tonullify a 1972 trade agreement. According to Secretary of State Kissinger, theSoviet Union regarded the linkage of trade benefits to freer emigration as aviolation of the 1972 trade agreement. which "had called for unconditionalelimination of' discrirninatory trade restrictions," and also a violation of the"principle of noninterference in domestic affairs." Text of Kissinger Statement 00Accord Cancellation. N.Y. Times, Jan. 15, 1975, at 4, cols. ~ (emphasis added) .

10. Trade Act of 1974, supra note 2, 402.II. ]9 U.S.C. ~ 1307 (1970). See 71 Congo nee. 4488-99 (1929) for congres-

sional tlebate regarding the amendment oi 307 to cover the products of forcedlabor and indentured labor under penal sanction.

More recently, the governments of the member stares of the Council ofEurope adopted the same principle, but wit hour a han on trade in the productsof such labor. See Protocol 1\"0. 4 to the [European] Convention for the Protec-tion of Human Rights and Fundamental freedoms. signed Sept. 16, 1963, enteredinto force May 2, 1968. Conn. Em .. European Convention on Human Rights,Collected Texts, sec. i, DOL 1\"0. " (I971); reprinted in L Sohu &: T. Buergcn-thai, International Protection of Human Rights, Doc. Supp. 145 (1973). Article tof this protocol provides: .. '-:0 one shall be deprived of his Iibertv merely on tl1(,ground of inability to fulfill a cou t ractual ohligation."

12. United Mrneworkers of America and State of Alabama ex ret. Williarn J .Baxley. the Attorney General of the State of Alabama, to Commissioner of


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Section 307 bars the importation of foreign goods which havebeen produced, manufactured or mined by convict labor, forced la-bor, or indentured labor under penal sanction.P The statute hasoccasionally been invoked since its enactment in 1929 to precludethe importation of goods made by convict labor,H but no decisionshave been reported which indicate that any goods, wares, articles ormerchandise have ever been excluded on the ground that they hadbeen produced by forced labor or indentured labor under penalsanction.

1. LEGISLATIVE HISTOR.YPrior to J929, Section 301 only barred the importation of

goods which were the product of convict labor. In 1929, SenatorBlaine of Wisconsin advocated the amendment of this provision sothat it might apply as well to products of forced labor and inden-tured labor under penal sanction. Since the Senator was the sponsorand driving force behind the amendment, his debate on the Senatefloor constitutes the primary source of legislative history on the sub-ject. But his own interpretation-s-and hence the intended scope ofthe statu te-e-rnust be considered in the context of the general politi-cal mood of the la te 1920s.

With respect to the prohibition on the importation of the pro-duce of forced labor, Senator Blaine advised that the legislative pro-hibition would merely conform to a national policy already adoptedthrough the treaty-making process.w Senator Blaine's amendmentto Section 307 defined as forced labor:Customs. Motion To Withhold Release of Merchandise pursuant to 19 C.F.R. 12.42 (e) (1974). See also Bus. Week, Oct. 12, 1974, at 29, col. 3.

Under the regulations implementing 307, 19 C.F.R. ~ 12.42-12.15 (1974),"any person outside the Customs Service" may apprise the Customs Service of hisbelief that specified imports must he withheld [rom release by Customs agents.This notification would ordinarily result in an investigation by the Commissionerof Customs or Iris designated representative. The "representations offered byforeign interests. importers. domestic producers, or other interested persons" mustbe considered before release from Customs is denied. The Commissioner 's deter-mination that 307 applies to one shipment of merchandise in a class creates arebuttable presumption that S 't07 applies to all other merchandise in the sameclass specified in the Commissioner"> finding.

13. See notes 11-12 supra.14. T.D. 53408. 19 Fed. Reg. 7H (1953); T.D. 51725. 23 Fed. Reg. 8667( 19 58 ) .15.71 Cong.RccH89 (1929).


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22 INTERNATIONAl lAW 8 < POliTICS [VOL 1: 19. . . all work or service which is exacted from any person un-der the menace of any penalty for its nonperformance and forwhich the worker does not offer himself voluntarily.w

This language very closely parallels the definition of "forced orcompulsory labour" which appears in Article 2 of the Forced La-bour Convention of 1930 (Convention No. 29) .1 7

Senator Blaine, however, considered a prohibition aimed ex-clusively at forced labor inadequate. In his opinion, the definition offorced labor employed by the drafters of the Forced Labour Con-vention of 1930 had been tailored to permit the continued use of amethod of servitude analogous to slaverv.t" The Convention's pro-hibition against forced labor would not, he feared, meet the situa-tion in which an illiterate native "voluntarily" signs an employmentagreement which provides penal sanctions for its breach. Viewed ina modern context, this fear seems ill founded. The InternationalLabour Organization and others who have recently studied thequestion of forced labor are more inclined to give a broad definitionto forced labor and to discount the element of voluntarism where itis a sham.l9 If one is ordered to do "socially useful" work and ad-vised that relocation and a prison sentence may be imposed other-wise, a serious question can be raised as to whether the labor whichis undertaken in such circumstances is not forced. Similarily, if oneis manipulated by discriminatory legislation into a state of abjectpoverty, the acceptance of a labor contract the breach of whichmay mean a prison sentence cannot fairly be characterized as a vol-untary act,

With the latter siruarions in mind, Senator Blaine sought to closethe loophole he perceived in the definition of forced labor by pro-viding that goods produced by indentured labor under penal sanc-tion should be denied entry into the United States. Yet Section 307provides no definition oi indentured 1abor under penal sanction.w

16. 19 U.S.C. 1307 (l970).i7. Int'l Labour Conference. Convention Concerning Forced or Compulsory

Labour (No. 29) [hereinafter "Conv. No. 29"]; see also 71 Cong. Rec. 4491(1929) (remarks of Sen. Reed) .

18. See note 15 supra.19. See Inr'l Labour Office (ILO) Report of the Dir.Gen., The Ratification

and Implementation of Selected International Labour Conventions in AsianCountries 4-6 (1971) [hereinafter "fLO Asia Report"); d. Gervasi, Industrializa-tion. Foreign Capital and Forced Labour in South Africa, U.N. Doc. No.ST IPSCA/Ser. A/lO, at 26--27 (1970) [hereinafter "Gervasi"].

20. 71 Congo Rec. 4491 (1929) (remarks of Sen. Reed) .


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and it seems doubtful whether it is any easier to identify indenturedlabor under penal sanction than it is to identify voluntary laborwhich is actually involuntary. The word "indenture" merely signi-fies a deed to which tWO or more persons are parties and underwhich they enter into corresponding grams and obligations to eachother."! It is the phrase "penal sanction" which provides the diffi-culty. The breadth of this enigmatic phrase will be further analyzedin relation to the contemporary implications of Section 307.22

Seen as the product of an era of prosperity and poverty, Sec-tion 307 takes on a fuller form. Senator Blaine's motives blendedeconomic protectionism of domestic producers with moral indigna-tion over the poverty, degeneration, and inhuman treatment suf-fered by natives in what would today be described as the ThirdWorld. At the time he proposed the amendment to Section 307, theSenator portrayed several instances where the strictures against theproduce of forced labor and indentured labor under penal sanctionwould apply. According to this description, imports of wrappersgrown by the planters of Sumatra and Java, copper from Columbiaand Peru, and rubber and lumber from various parts of SouthAmerica might be prohibited.P

Part of the appeal for Blaine's legislation dearly stemmedfrom the economic philosophy of the time-that any measure reostraining the importation of foreign goods would ineluctablystrengthen domestic production and foster continued prosperiry.>'Import restrictions focused primarily on the threat of disruption toU.S. markets from goods produced by cheap foreign labor, regard-less of where it existed, and on the protection of antiquated or inef-ficient industrial plants.

There were supporters of free trade at the time Senator Blaineintroduced his amendment. The Democrats, predominantly South-erners at the time, vigorously protested the absurdly high tariffswhich virtually prohibited foreign competition with regard to manu-factured items.25 Nevertheless, the concerns of the dissenting mi-nority were as much a reflection of antagonism against the discrimi-natory tariff system produced by the aftermath of the Civil ,Var asthey were an affirmation of free trade.

21. Black's Law Dictionary 910 (4th ed. rev. 1968) .22. See text accompanying notes 49-74 infra.23. 71 Congo Rcc. 4495-96 (1929).24. See H. Rep. No. 71-7. 71st Cong .. lst Scss, 3 (1929) (hereinafter "H.

Rep. No. 71 '']-25. See id., Pt. 2. at I (remarks of Rep. Hull) .


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24 INTERNATIONAL LAW & POLITICS [VOL. 1: 19

Even the agrarian free traders adopted the prevailing protec-tionist view with respect to the independence of the Philippines.While Senator Blaine was assembling support for legislation block-ing the importation of produce from less developed countries whichwould compete with American labor, many of his colleagues In re-sponse to their constituents were pressing for independence for thePhilippines.26 Sugar cane and sugar beet growers, dairy farmers,cottonseed oil manufacturers and cordage manufacturers lobbiedfor Philippine independence so that tariffs could be imposed uponcompeting Philippine imports.s" And American labor / supportedPhilippine independence because it opposed imperialism andwished to halt the immigration to the United States of nativeFilipinos.ss

The efforts of Senator Blaine and others on behalf of exploit.ed colonial peoples should not, however, be dismissed as a politicalsham any more than they should be lionized to an unwarranted de-gree. The more important exercise is to test Section 307 against therecord of events since 1930 and analyze its purpose and usefulness inthe changed political context of the 1970s.

II. THE INFLUENCE OF GATTBy 1934 the universal policy of protectionism against foreign

trade had revealed itself a disaster. The volume of goods enteringworld trade by 1933 had dropped to 70 percent of its 1929 volume.The drop in U.S. trade was even sharper: United States exports in]933 were only 52 percent of the 1929 volume and 32 percent ofthe 1929 value.sv Recognizing the implications.w President Roo-sevelt asked Congress for and received the power to bargain as chief

26. See generally A. Griswold, The Far Eastern Policy of the United States450-51 (1962).

27. rd. at 451-52.28. re . at 450. 452.29. Presidential Message to Cong-ress, Mar. 2, 1934. reprinted as H.R. Doc.

No. 73-273, 73d Cong .. 2d Sm. (1934).30. Referring to the need for international trade, President Roosevelt corn-

merited:This has meant idle hands. stili machines, ships tied to their docks,despairing farm households. and hungry indu trial families. It has made

infinitely more difficult the planning for economic readjustment in which theGovernment is now engaged.You and I know that the world does not stand still; that trade move-ments and relations once interrupted can with the utmost difficult)' be


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1975] MORALITY IN INTERNATIONAL TRADE 25executive for trade concessions.s! Under this authority, PresidentTruman later bound the United States to the terms of GATT.32

President Roosevelt was not able to restore the vitality ofworld trade even with the extraordinary powers conferred upon thechief executive by the Trade Agreements Act.33 During the latterstages of the ensuing world war the Director of the Office of Eco-nomic Affairs of the Department of State summed up the effects ofthe protectionist era well when he noted:

We've seen that when a country gets starved out economically,its people are all too ready to follow the first dictator who mayrise up and promise them all jobs. Trade conflict breeds non-cooperation, suspicion, bitterness. Nations which are economicenemies are not likely to remain political friends for long.34

President Truman expressed. similar sentiments when he addresseda message to Congress in 1945 seeking the renewal of the TradeAgreements Act.:15 With such renewed authority he embarkedupon the significant negotiations from which GATT evolved.

Although GATT does not speak directly to the question offorced labor and indentured labor under penal sanction, there isample evidence in the records of proceedings and preliminary draftsto infer that the issue was discussed with quiet vigor. Article X~ ofGATT generally proscribes the use of prohibitions or restrictionsother than duties or other charges.36 The United States was a

restored; t.hat even in tranquil and prosperous times there is a constantshifting of trade channels.ld,

31. Sec ! i s 35{)(a)(b) of the Tariff Act ofJ930. Act of June 17.1930, eh.497, 46 Stat. 590. as amended by the Act of June 12. 1934, eh. 474, Ii l , 48 SIaL943.

32. Proclamation No. 27.6lA. 12 Fed. Rtg 8863 (1947).33. Trade Agreements Act, Act of June 12. 1934. ch. 474. 48 Stat. 943,

amending the Tariff Act of 1930.34. Address by Harry Hawkins. reprinted in O.S. Dcp't of State. 74 Cornrner-cial Policy Series at 3 (l944) ,35. See The President's Message to Congrcs 011 the Renewal of the Trade

Agreements Act, as reprinted in 12 Dcpt't State Bull. 533 (1945).36. For the complete text of GATT, Oct. 30, 1947, sec 61 Stat. All. T.1.A.S.

No. 1700, "i.S-Sl U,N.T.S. J. Art. Xl reads in part:No prohibitions or rcstricrions other than duties. taxes, or other charges,whether made effective through quotas, imparl or export licenses or othermeasures, shall be inslilnled or 1/!"j,ltained by any contracting party on theimportation of any product of the territory of any other contractingparty ....

(Emphasis added.j


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26 INTERNATIONAL LAW & POLITICS (VOL 1 :19

strong proponent of Article Xl and condemned quantitative re-strictions in the strongest terms at the first Gi\TT Preparatory Ses-sion in London.s" A fiat prohibition against importation such asthat found in Section 307 is the most punishing variety of quantita-tive restriction, since in effect it sets a quota at zero.

Article XX (e) of GATT provides a general exceptionwhereby contracting parties may enact and enforce measures whichrelate to the "products of prison labour" without regard to theirgeneral obligations under GATT-as It would be difficult to main-tain that the drafters of GATT intended that the exception for"prison labour" should also apply to forced labor and indenturedlabor under penal sanction. since Article XX (e) in its final formis significantly broader than its predecessor, Article 37 (b), whichoriginally provided an exception only for "prison-made goods."39Additional evidence that a narrow reading of Article XX (e) isintended may he derived from India's unsuccessful attempt to havean exception included in Article 37 (subsequently Article XX)which would permit a country d for reasons of high policy, todiscriminate against a member, either on a recommendation of theITO [International Trade Organization] or on its owninitiative. , .. "40 The purpose of India's proposed exception wasperhaps revealed when India, upon adhering to GATT, opted un-der Article XXXV for non-application of GATT between itselfand South Africa. a nation frequently alleged to condone the use offorced labor.!'

It is important to note that the United States may not bebound by Article XI of GATT with respect to prohibitions on the

37. Sec V.N. Doc. No. E/PC{T/A{PV(22, at 16--[7 (1947). There, the. U.S.delegate warned:If Q.R. [quantitative restriction] is to be fastened on the commerce of theworld without Jet or hindrance. the rcsuictiouism ol the Iifties and theSixties will make the restrirrions of the 'Thirties look like absolute free. trade.3M. G..vrr Article XX provides:

Subject to the requirement that such measures are not applied in amanner which would constitute a means of arbitrarv Or unjustifiable discrim-ination between countries where the same conditions prevail. or a disguisedrestriction 011 international trade. nothing in this Agreement shall be con-strued to prevent the adoption or enforcement by any contracting party ofmeasures:

(e) relating to the products of prison labour:39. U.N. Doc. No. EiPCfT/C.5/55. at 51 (1947).40. Id. at 48 (1947).41. Sec GATT Doc. No. CP.2/4. cited in GATT, Analytical Index 176 (3drev. 197


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197~J MORALITY IN INTERNATIONAL TRADE 27products of forced labor and indentured labor under penal sanction.Under Article 1 (b) of the Protocol of provisional Application ofGATT, to which the United States is a party, a country is bound toimplement Part II of GATT (Articles III to XXIII) only "to thefullest extent not inconsistent with existing legislation."~2 The ex-ception for "existing legislation" has been interpreted by the GATTPanel on Complaints to apply only to those situations in which exe-naive authorities have no discretion to modify the legislation whichcontravenes the principles o r GATT.43

From the standpoint of international law, it seems arguablethat President Truman was obligated to use his full authority underSection 350 of the Tariff Act of 193044 to override Section 307'sabsolute quantitative restriction on the imports of the product of in-dentured lahar under penal sanction.w Evidence suggests, however,that the Administration did not interpret GATT in this manner.Although Section 350 of the Tariff Act of 1930 would appear togive a President the authority to modify an import restriction orprohibition-such as the prohibition on the importation of productsof forced labor-c-it was the clear intention of the State Departmentthat GAT1' should not modify existing Ll.S. legislation which wasinconsistent with GATT.46

42. Protocol of Provisional Application of the General Agreement on Tariffsand Trade, 61 Stat. All (1947).

43. Belgian Family Allowances, Report adopted by the Contracting Parties tothe GATT, Basic Instruments and Selected Documents 59, 61 (1st Supp. J9.'}3).44. 19. U.s.C. 1351 (1970). This provision authorizes the Presidentto enter into foreign trade agreements with foreign governments ... [and)[t]o proclaim such modifications of existing duties and other import restric-tions ' . , as are required or appropriate to carrv out any foreign trade agreemenr t har the President has entered into hereunder.

This procedure comports with consurutional safeguards inherent in OUT tradi-rional concept of separation of powers. Intel' Maritime Forwarding Co. v. UnitedStates, 51 C.C.P.A.95 (1904).

45. The American delegate offered the following explanation of the clausel>rcsewing "existing legislation":

T think the intent is that it should be what the executive authority calldo-in other words, the administration would be required [0give effect tothe general provisions to the extent that it could do so without either (I).changing (he existing legislation or (2) violating existing legislation; If aparticular administrative Tt~gulati()n is necessary to carry out the law, 1should think that that regulation would, of course, have to stand; but to theextent that the administration had (he authority within the framework ofexisting laws to carry out these provisions, it' would be required to do so.

Statement of Hon. J.M. Leddy, U,N. Doc. :-\0. EfPG/TfTAC(PV.5, at 2Q (1947)(emphasisadd.ed). .46. See remarks of Hon. Winthrop G. Brown. DiL. Office Int'I Trarle Policv,I)ep't of State, Hearing 01\ Trade Agreements Extension Act of 1951 Before the

Senate Comrn. on Finance, 82d Cong., lst Sess. 1194 (1951),


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28 INTERNATIONAL LAW & POLITICS [VOl. 1: 19During the Hearing on the Trade Agreements Extension Act

of 1951 the State Department presented the Senate Finance Com-mittee with what was supposed to be a complete list of the provi-sions of GATT which could not be made effective without specificlegislation.!" The list made no reference to Section 307 of the Tar-iff Act of 1930 as being inconsistent with Articles XI andXX (e) of GATT. It is possible that the State Department simplyoverlooked this conflict+s It seems equally plausible, however, thatthe Treasury and State Departments had concluded that, althoughSenator Blaine's amendment was not enforceable without seriousrepercussions for U.S. foreign relations and frequent counterpro-ductive results, the issue of modifying Section 307 was too political-ly sensitive to confront.

III. Tuz IMPACT OF SECTION 307 IN A MODERN CONTEXTIn order to assess the present day significance of Section 307,

it is first necessary to understand the concepts of forced labor andindentured labor under penal sanction. Indentured labor by itself isnot a concept at odds with a free society, As stated above.t" it sig-nifies nothing more than an individual performing personal servicesunder contract. Penal sanctions for non-performance of such laborcontracts, however, are not countenanced in the United States orother developed countries. Liq uidated damages for non-perform-ance and, in some cases, injunction against working for competitorsare accepted remedies for breach of contract, provided the cove-nant against competition is not unreasonably broad under thecircumstanccs.v' But such remedies may be invoked only with reogard to highly talented individuals who possess uncommon skills orclosely guarded know-how. 51 The average laborer in Western so-ciety is in most instances more bound to his job by personal prefer-ences and attachments than by contractual obligation.

4.7. Id. at 1195-99_48. It is perhaps possible that some considered ~ 307 nullified by i ts history

of consistent non-enforcement. Cf. Poe Y. Ullman, 367 U.S. 479 (1960) (criminalanticontraceptive laws) ,

It9. See text accompanying note 2l supra.50 . See. e.g, \'Vood v, Lucy, Lady Duff-Cordon, 222 N.Y, 88. 118 N.E. 214(1917); Stokes v, Moore, 262 Ala. ';9, 77 So. 2d 331 (1955) (enforcing clause

against. competition); hut d. Fullerton Lumber CO. V. Torborg, 270 Wis. 133,70N.W.2d 585 (1955) (enf01Ting for a three-year period a covenant not to competewithin 15 miles from employment situs) .

51. See, e.g., Annot., 52 A.L.R. 1364 (1928).


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Senator Blaine and his colleagues struggled unsuccessfully withthe definition of indentured labor under penal sanction and ulti-mately satisfied themselves that the phrase "has a definite specificmeaning in the countries where it is employed and that the Treas-ury Department would adopt that meaning,"52 Unfortunately, suchreasoning only begs the question. The Senator, unable to perceivein 1929 the import of the political realignment initiated by the Rus-sian revolution and 'World War I, focused narrowly in his debate onthe traditional concepts of indentured labor under penal sanctionand forced labor. The traditional concepts envisaged a colonial set-ting in which a European nation would maltreat a native populationin a tropical clime for economic gain. Under such a system, thecharacteristic penal sanctions would be incarceration and fineswhich were imposed without reg-ard to the actual damages suffered.by the employer. The senators who favored the Blaine Amendmentconcluded that penal sanctions should not be limited to penalties"enforced through criminal process" since imprisonment for indebt-edness under civil process would be equally as repugnant as impris-onment for breach of contract under criminal process. 53

Two critical issues were left unresolved by the supporters of[he Blaine Amendment. First, they did not foresee the use of forcedlabor by communist countries and independent developing nations.Second, they failed to resolve the difficulty of assessing the moralityof a nation's economic system on the basis of the existence of penalsanctions or the degree of voluntariness with which its workers under-take their labor.

A.. Labor Systems in Communist and Developing Nations1. Developing Nations. Since the enactment of $ection307,

underdeveloped territories dominated by European governmentshave become rare anachronisms. In their places have come inde-pendent nations which are frequently subject to economic stress,Within such countries, statutes permitting the lise of forced or com-pulsory labor to achieve economic development and prevent va-grancy are relatively common."{ The Forced Labour Convention of

52. 71 Cong. Rec. 4491 (!9~9).53, rd. at 4494.54. Int'I Labour Office (ILO) , Report of the Dir .Cen" The Ratification and

Irnplemcntarion of International Labour Conventions in Africa, with Special Ref-erence to Conventions rdating to Employment Policy, Force...I Labour, SocialPolicy and Labour Inspection 23-27 (1973) [hereinafter "ILO Africa Report"];ILO Asia Report. supra note 19, at 4-6.


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30 INTERNATIONAL LAW & POLITICS [VOL 1: 19] 93055 does sanction the use of forced labor in cases. of emergen-cy. Since war and famine constitute emergencies within the defini-tion of the relevant provision of the Convention.s" avoidance of itsproscriptions against forced labor might be relatively easy for manycountries even if their statutes were drafted to prohibit the use offorced labor for economic development. Under the unqualified Ian-guage of Section 307, however, there appears no reason why thestatutory prohibitions should not apply to the products of labor im-pressed because of war or famine, let alone to the products of laborimpressed for the purpose of economic development. 57

Forced labor has also been authorized by law in various devel-oping countries for the noneconomic purposes of (1) punishingthose holding or expressing views contrary to the views endorsed bythe ruling government; (2) effecting political coercion oreducation;58 (3) effecting labor discipline; and (4) punishingparticipants in strikes. 59 The use of forced labor in these four in-stances is without redeeming merit.

However, the use of forced labor to accomplish economic de-velopment may be the only viable option to a developing nationtrying to break out of poverty. One of the delegates to the FourthAfrican Regional Conference of the International Labour Organiza-tion, held in December 1973, noted that there existed a problemin cases "where, in one part of the country, there was a shortage oflabour while, in another, idle persons refused to work ... "00 If acountry confronted with such a situation resorts to impressing laborto alleviate its distress, is it appropriate for the United States to in-voke Section 307 and deny a market to the produce of suchcountry?61 The mandatory language of Section 30 7 would seem toleave no choice but to prohibit the "tainted" articles .

.55. Conv. No, 29. 5llpra note 17. art. 2 (2) (0).56. Id.57 , Section 307 provides an exception to its general terms only in the case of

goods, wares. articles. or merchandise which are not mined. produced. or manu-factured in such quantities in the United States as to meet the consumptivedemands of the United States.

58. Recently the Bolivian government Iorced ibusinessmen, labor leaders andwriters to take civil service jobs as part of an effort to control political dissentand exploit the nation's suddenly favorable economic circumstances. Those whodecline civil service jobs face a two-year prison sentence or exile. ] I . . ' ,Y. Times.Nov. 26. 1974. at 14, col. 3.

59. ILO Africa Report. supra note 54. at 28-36; ILO Asia Report. supra note19. at 7-11.

60. ILO Africa Report. supra note 54. at 50.61. The application of the prohibitions of 307 to the agricultural produce


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1975] MORALITY IN INTERNATIONAL TRADE 31If one concludes that Section 307 should not be invokedagainst nations employing forced labor for economic development

because greater harm than good may result, one is immediatelyconfronted with a politicization of Section 307; for the same argu-ment may be made with regard to South Africa which countenancesa system variously described as forced labor and indentured laborunder penal sanction. South Africa fits the traditional context ratherthan the emerging nation context. but the effects of an economicboycott might be equally counterproductive to the original hu-manitarian purposes of the statute. One leading opponent of apar-theid in South Africa has warned that an economic boycott ofSouth Africa would have its primary impact on the black South Af-ricans. who would "be the first to lose their jobs. Moreover the ma-jor weapon against apartheid--economic development-would beblunted."


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32 INTERNATIONAL LAW & POUTICS [VOL. 1: 19submission of applications for emigration visas.1l5 The Anti-Para-site Law is aimed broadly at those individuals who "although capa-ble of working are stubbornly opposed to honest labor, and wholead an antisocial, parasitic way of life."66 The punishment for vio-lation of the Anti-Parasite Law is the performance of work deemedsocially useful in a new place of settlement. If an individual furtherevades work and such evasion is deemed malicious, he may be sub-jeer to deprivation of freedom or corrective labor for systematic en-gagement in vagrancy}"

According to the International Labour Organization, work per-formed by individuals found to have violated the Anti-Parasite Lawconstitutes forced labor within the meaning at the Forced LabourConvention of ]93n.68 The Soviet Union has nonetheless insistedthat forced labor as defined in that Convention does not exist in theU.S.S.R.09 Within the context of Section 307, it might be specula-ted whether the criminal sanctions imposed for systematic vagrancyand begging do not bring the entire Soviet labor force within thedefinition of forced labor at indentured labor under penal sanction.

3. People's Republic of China. The People's Republic ofChina also engages in labor practices which would appear to con-trovene Section 307. One respected authority on China?v has com-mented:

There is m fact, dose coordination of educational processesand economic activities, including planning and constructioneffort. Education is linked to production in particular, withstudents and professors regularly dispatched to the fields andfactories to perform manual labor alongside other workers.There has been frequent assignment to dirty work. with the

6;'. See Burford, Getting the Bugs out of Socialist Legality: The Case ofJoseph Brodsky and a Decade of Soviet Anti ..Parasite Legislation, 22 Am.]. Camp.L. 165 (1974).

Recently Aleksandr Voroncl a Jewish physicist residing in the Soviet Union,was denied permission to emigrate to brad and was dismissed from his job IOThaving applied 10 emigrate. Thereafter. Voronel was reportedly threatened withprosecution for parasit ism. ]\'.Y. Times, Sept. 17, 1974.;tt 2. col. 4.

Go. 1965 Decree, supra note 6+.67, 1970 Decree. snpra note 64.68. ILO Asia Report, supra note 19, at 6.69. 1


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1975) MORAlITY IN INTERNATIONAL TRADE 33conscious purpose of degrading the intellectual in his own andother eyes, to deprive him of his former pride of place,"!

The performance of acculturative labor would not by itself justifythe implementation of Section 307 sanctions, provided that such 1;'1-bor is being performed voluntarily in the real sense of the word.The quoted remarks indicate that this requirement is not being sat-isfied by the People's Republic of China:

... China's youth are educated at the expense of the State;in return they are expected to take assignments at the POStswhere the State feels they are needed. Refusal to obey ordersis generally viewed as an antisocial act and is thus highly inad-visable. The position assigned is frequently below expectations."As with the Soviet system, one might legitimately .ask whether

the Communist Chinese method of work assignment does not bring itsentire labor force within the definition of forced labor or indenturedlabor under penal sanction.I" The absence of labor contracts such asare found in the South African system would not cause the Soviet andChinese systems to escape Section 307. Contracts were regarded bySenator Blaine as hollow evidence of voluntarism which would takenative laborers out of the definition of forced labor contained inConvention No. 29.14 Workers who toil without contracts underthe threat of penal sanction if their labor fails to meet with the satis-faction of the state are clearly forced labor if not indentured laborunder penal sanction.B. Moral [udgments of a Nation's Economic System

The quiet oblivion of Section 307 stands in marked contrast tothe history of Section 303,75 which authorizes the imposition of du-

71. O.E. Clubb. "Twentieth Century China 410 (1964).7'2. Id. at 411.73. A recent article by lao Wen-vuan. China's leading polemicist. criticizesyounger Chinese workers for succumbing to a "bourgeois world outlook." Work-

ers who demand higher wages, officials who criticize Chairman Mao's demandsthat officials and students be sent to labor in the countrvside, and ministers whosuggest that higher "'agel; might stimulate higher production are regarded as lawbreakers. N.Y. Times, Mar. 4. 197.~, at I, col. 6. Yao Wen-vuans statement hasbeen interpreted as a possible signal that China may soon revive some of thepractices of the Creut Leap Forward of 1958 such ;IS unpaid collective labor. Irl.,Mar. 8, 1975, at 4, col. 4_

i4. 71 Congo Rec. 4490--91 (1929) .7'5. Tariff Act of II)~O, 1 :i 303, 19 USC. ~ 1303 (1970) .


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34 INTERNATIONAL LAW & POLITICS [VOL 1: 19

ties. Section 3 03 places the Treasury Secretary under a legal obliga-tion to assess countervailing duties if he sees a bounty or grantbeing paid to a manufacturer, producer or exponer of foreign mer-chandise being imported into the United States.743 Consequently',the standard for assessing countervailing duties purports to be pure-ly economic, not political, though the Treasury Secretary enjoyssome discretion in defining what acts of foreign governments conferbounties or grants in doubtful cases.??

Whatever the Treasury Department's authority with regard tocountervailing duties may be as a fine point of law, Latin Ameri-cans, and no doubt others, perceive that most trade decisions in theUnited States are arrived at through a process of politicalnegotiation.tf The uneven application of countervailing duties andsuch other nontariff barriers as sanitary regulations has generatedconsiderable frustration and ill will beyond the borders of the UnitedStates.t?

Given the passions ignited by the perceived heavy-handed useof countervailing duties and sanitary regulations, it is not difficult toimagine the implications for U.S. foreign relations if charges of"slave labor"80 come to be habitually invoked as a justification forbarring the import of a product. To avoid the jeopardy to foreignrelations which arbitrary enforcement of Section 3 07 would pose, itis essential to base the sanction of Section 307 on standards whichare both objective and ascertainable. The degree of voluntarinesswith which workers undertake their chosen or assigned labors in aparticular society is dearly a difficult issue to resolve. Deciding thequestion by searching for the presence or absence of a penal sanc-tion for the nonperformance of labor, however, seems no more like-ly to provide a dear answer. 10 the United States an individual may

76. The term "bounty" must be broadly construed. It includes, for example,a rebate of domestic excise tax on the exportation of goods. G.s . Nicholas 8 c CO .Y . United States, 249 U.S. 34 (1919).

77. Citing GATT, the U.S. Court of Customs :1m! Patent Appeals has de-duced that (he Treasury in 1947 felt it had the power to veto an assessment ofcountervailing duties and has noted that Congress has never contradicted thisassumption by the TrCi\SuT)'. United States v.Hammond Lead Prods., 440 F. 2d 1024,l03~ (C_C.P.A. 1971) .

7B. Suddenly Its Manana in Latin America, Fortune, Aug. 1974, 138, 142.79. For example, Romero Kolbeck, director of Mexico's Nacional Financiera.

has complained: "The barriers come down for Mexican fruit and vegetableswhenever there's a crop failure in the Imperial Valley, Otherwise .. ," Id. at218.

80. See, c.g., Bus. Week, Ocr. 12, 1974, at 29-~O.


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1975] MORALITY IN INTERNATIONAL TRADE 35

be temporarily incarcerated for public intoxication, a conditionwhich is often coupled with vagrancy, However. as Justice Marshallperceived in Powell u. Texas+: a night in jail may be the onlyeffective way to protect both the inebriate and society. But it isquite another matter to send an individual to the Gulag Archipelagofor failure to work the required minimum number of labor days orto complete work norms, an apparently not uncommon punishmentin the Soviet Union under Stalin.82

The dilemma of deciding at what point between these two ex-trernes one enforces Section 307 is easily resolved if one accepts theprinciple that Section 307 may be invoked whenever labor is notvoluntary, either because penal sanctions exist or because the statehas ordered that the labor be performed. Yet such a conclusiondoes little to enhance the viability of Section 307 as effective legis-lation susceptible of rational application. If Section 307 is to be-come effective. very careful consideration must be given to thetypes of forced labor situations which merit attack through the im-position of an economic boycott.

If one is to be pragmatic about the use of trade restrictions toaccomplish political reform in foreign countries, their anticipatedreaction to the imposition of political trade sanctions should also beassessed. In this connection it is useful to analyze the responses ofthe Soviet Union and South Africa to U.S. trade restrictions de-sig-nedto promote political reforms within those two countries.

Section 402 of the Trade Act of 197483 provides that theUnited States shall continue to deny most-favored-nation treatmentto any nation not already eligible if the President determines thatsuch country denies its citizens the right or opportunity to emigrate.As Secretary of State Henry Kissinger had predicted.ss congres-sional pressure on the Soviet Union to drop its restrictions on emi-gration has produced a significant upsurge in the harassment ofRussian Jews.85 Trade with the Soviet Union has begun todecline.w and Deputy Soviet Foreign Minister Vladimir S. Alkhi-mov has questioned the ability of the Ford Administration to honorits commitments in more complicated matters "if it cannot honor

81. Powell v. Texas. 392 u.s, 5J4 (1968).82. A. Solzhenitsyn, The Gulag Archipelago 67 (1973).83. See Trade An of 1974, supra note 2, 402.84. Bus. Week. Jan. 13, 1975. at 78. col. l.85. Time, Jan. 20,1975, at 36. col. 3.RI> l\us. Week, Jan. 27, 1975, at 48, col. 2: id .. Feb. 3. 1975; at 22. col. 3.


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36 INTERNATIONAL LAW & POLITICS [VOL. 1: 19them in trade."87 A number of reasons in addition to Soviet emigrationpolicy may be advanced to explain the slowdown in United States-Soviet trade.S!! Nonetheless, it appears possible that the Jackson-Yanick Amendment may have had the. unfortunate consequence ofdamaging U.S. trade and jeopardizing the human rights of the veryindividuals it sought to assist.

The reaction of the Republic of South Africa to the UMW'sMotion to 'Withhold the Release of Merchandises? has been morepositive. By the Second General Law Amendment Act of 19749()the South African government repealed Sections 13 (6) (b) and 15of the Bantu Labour Act, No. 67, 1964.91 At the same time, how-ever, the South African government declared that no person could,without the permission of the Minister of Economic Affairs, furnishany information as to any business carried on inside or outside ofSouth Africa in response to an order, direction or letter of requestissued or emanating from outside South Africa. Any person con-travening such declaration is liable to a fine not exceeding 2,000rand and/or to imprisonment not exceeding two years.92 This pro-hibition should be studied in connection with the Section 307 regu-latory requirement that a special certificate of origin be obtained inthe case of goods detained because information available reason-ably indicates that merchandise is within the purview of Section307.9:1The special certificate of origin is supposed to be signed bythe owner or seller in the country of origin.

The Second Genera] Law Amendment Act appears to havehad the salutary effect of decriminalizing the breach of employ-ment contracts 0)' non-whites. The South African governmentwould probably he reluctant to acknowledge any connection be -tween certain sections of the Act and the attempt of the UM\V toprevent the release of a shipment of South African coal from U.S.Customs COIlUO!. South African commentators, however, have

H7. !\:.'l. 'Tunes. !-\:h. 22. J975. at l.col. 5.88. Sec. q~..Mcvci. Why Thai Soviet Buying Spree Won 't Last. Fortune, Jan.

\()7ri. at 94 .S!I. Sec text 'H:COlllP'lJlyillg llOl,' .'1,"IP"!.DO, Second C('llcraJ Law Amendment An, No. 94 of 1974. ~ 5J; assented to.

Nov. II . 1974; eff.:\ov. :CO,197+ (Repuh. of So. Aft'.) .'IL Hamil Labour Act. :-';0. 67 of l'llif. as amended bv Banlu Laws Amend-mcut Ac!' No. 1'1 of 1970, Sec()n


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1975] MORALITY IN lNTERNATIONAL TRADE 37

shown no hesitation to draw the connection.e' If the South Africangovernment was in fact motivated by the threat of trade restrictionsto remove penal sanctions from its labor law, three reasons may beascribed. First, the Republic of South Africa is heavily dependentupon foreign trade for heavy capital goods it cannot produce athomeH5 Second, the Republic of South Africa is politicallyisolared.w Third, the penal sanctions which were repealed, al-though they may have had a chilling effect upon dissent amongworkers, were, according to South African government sources, sel-dom enforced.s"

IV. CONCLUSIONThe threat of barring merchandise from entry into the United

States on the ground that such entry would violate Section 307 hasproduced a result which the vast majority would applaud in the caseof South African coal. Preliminary success with this tactic shouldnot, however, be allowed to obscure the serious damage which themisuse of Section 307 could cause, both to the U,S. economy and itsforeign relations and to the supposed beneficiaries of the law's ap-plication. Now that it has been revived from obscurity, Section 307could easily become a tool for the harassment of imports by anygroup opposed to placing U.S. goods in competition with foreignproduce. It could also be used to further the political objectives ofvirtually any special interest group.

Economic boycotts of the type envisioned in Section 307should only be applied by Congress and the President after themost careful consideration. Special interest groups with stronglyheld beliefs on closely defined matters are certainly entitled to ahearing, but their allegations should not carry the weight they dounder Section 307 and the present regulations.tf Nor, as previouslynoted, should one department of the executive branch be left to ex-ercise the authority and hear the responsibility for decisions whichreflect upon the morality of foreign governments,

94. U.S. Lawsuit Foiled, The Star (johannesburg). Nov. 9, 1971.95. Gervasi. supra note 19, at 101.96. See, e.g . . N.Y. Times. Oct. 7,1974. at 6.97. C;;0v't Lifts Curbs on Black Workers, Rand Daily Mail, Oct. 16, 1974.98. 19 C.F.R. 12.42 (e) (1974). For the operation of these provisions, see

generally note 13 bllpr3,


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38 INTERNA TIONAl LAW & POLITICS [VOL 1: 19Section 307 and the regulations thereunder should be modified

to eliminate the connection between a particular shipment of goodsand the existence of forced labor or indentured labor under penalsanction in their country of origin. When the Treasury Departmentor a private group suspects the existence of forced labor or inden-tured labor under penal sanction in a country which exports pro-duce to the United States, the Treasury Department or the privategroup working through the Treasury Department should submit areport to the President who, in turn, should report to Congress witha request for a declaration of economic boycott if he deems suchaction appropriate. If Congress then approves such a boycott, theboycott should apply to all goods and produce of the country utiliz-ing forced labor or indentured labor under penal sanction. Thedeclaration by Congress and the President would hopefully containdetailed reasons for the imposition of the boycott and the conditionsunder which it would be lifted. Such a modification of Section .3Q7would remove from it the suspicion that it is simply another pieceof protectionist trade legislation. It would also insure that no actioncarrying such demonstrably hostile implications as Section 307would be undertaken without the utmost consideration by the Presi-dent and Congress.