Jonah Patel
The Commerce Clause, which is part of the United States Constitution (Article I, Section 8, Clause 3), grants Congress the power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes. This clause has been interpreted by courts and commentators as granting Congress three distinct powers: the Foreign Commerce Clause, the Interstate Commerce Clause, and the Indian Commerce Clause. The interpretation and application of the Commerce Clause have been the subject of debate and dispute, with some arguing for a broad interpretation that includes the regulation of economic activities and others advocating for a narrower understanding focused on trade and navigation. The Supreme Court has played a significant role in shaping the scope of the Commerce Clause through landmark cases such as Gibbons v. Ogden (1824), Swift and Company v. United States (1905), and United States v. Lopez (1995).
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What You'll Learn
The Commerce Clause
The interpretation of the Commerce Clause has been a matter of debate and has evolved over time. Initially, the Supreme Court viewed the clause as limiting state power rather than a source of federal power. However, in the 20th century, the Court's interpretation evolved, and it began to recognise broader grounds for the use of the clause to regulate state activity. The Court held that Congress could regulate intrastate activity if it was part of a larger interstate commercial scheme.
In the 1995 United States v. Lopez case, the Supreme Court attempted to curtail Congress's broad legislative mandate under the Commerce Clause by returning to a more conservative interpretation. The Court invalidated a statute criminalising the possession of handguns near schools, arguing that it was not related to "commerce" or "economic enterprise" and did not affect interstate commerce.
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Interstate trade barriers
The US Constitution addresses interstate trade barriers in the Commerce Clause (Article I, Section 8, Clause 3). This clause grants Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes". The Commerce Clause emerged as a response to the economic problems that led to the 1787 Constitutional Convention, including interstate trade barriers.
The original meaning of the Commerce Clause gave Congress the power to regulate the trade, transportation, or movement of persons and goods between states, foreign nations, or Indian tribes. However, it did not include the power to regulate the economic activities that produced the goods to be traded or transported, such as manufacturing or agriculture. The interpretation and application of the Commerce Clause have evolved over time through various court cases and changes in the Court's jurisprudence.
In Gibbons v. Ogden (1824), the Supreme Court held that intrastate activity could be regulated under the Commerce Clause if it was part of a larger interstate commercial scheme. The Court also recognised that the Commerce Clause did not give Congress the power to regulate slavery within state borders, even when combined with the Necessary and Proper Clause. In 1905, the Supreme Court further broadened the interpretation by holding that Congress could regulate local commerce if it was part of a continuous "current" of commerce involving the interstate movement of goods and services.
The Constitutional Revolution of 1937 marked a shift in the Court's focus from protecting economic rights to safeguarding civil liberties. During the Lochner era (1905-1937), the Court experimented with the idea that the Commerce Clause did not empower Congress to pass laws impeding an individual's right to enter business contracts. However, starting with NLRB v. Jones & Laughlin Steel Corp in 1937, the Court recognised broader grounds for using the Commerce Clause to regulate state activity, such as the "substantial economic effect" on interstate commerce.
In the 1990s, the rapid growth of electronic commerce intensified the debate over interstate trade barriers. Internet companies sought tax-exempt status, arguing that their business extended across state lines through the electronic "superhighway". As of the early 21st century, the issue of state taxation and internet commerce remains unresolved.
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Alcoholic beverage importation
The Commerce Clause, which grants Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes", is the most relevant clause in the US Constitution concerning free trade.
The importation of alcoholic beverages into the United States is regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB). The TTB requires that importers of alcoholic beverages obtain a Federal Basic Importer's Permit. This permit can be applied for electronically, through the Permits Online service, or by submitting a paper copy of the application form. Additionally, importers must comply with any applicable requirements of other Federal agencies, such as the FDA. For example, under the Bioterrorism Act of 2002, importers of alcoholic beverages must register with the FDA and provide prior notice of the importation of such beverages.
Importers are responsible for all applicable Federal excise taxes and duties, which are collected by US Customs and Border Protection (CBP). Excise taxes and duties vary depending on the specific circumstances of the importation, including the quantity, product type, and country of origin. State and local jurisdictions may also have their own importation requirements, such as limits on the amount of alcohol that can be brought into a state without a license.
In addition to the above, there are specific requirements for importing alcohol for personal use. Generally, it is at the discretion of the CBP's Port Director at the port of entry to determine whether an importation is for personal use. If a substantial quantity of alcohol is being imported for personal use, it is recommended to contact the CBP entry branch of the port of entry in advance. If the imported alcohol is to be given away as gifts, a US government health warning statement is required to appear on each container.
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The slave trade
The United States Constitution, in its original text, does not directly mention the term "free trade". However, the concept of free trade, or the freedom to engage in commerce without excessive government interference, is inherent in several provisions of the Constitution, and the topic of the slave trade is addressed in several parts of the document.
The Three-Fifths Compromise: This compromise was reached during the Constitutional Convention and is reflected in Article I, Section 2, Clause 3 of the Constitution. It stated that for the purpose of representation in Congress and direct taxes, slaves would be counted as three-fifths of a person. This compromise gave Southern states, where slavery was prevalent, more representation in Congress, and acknowledged the existence of slavery for the purposes of taxation and political power.
The Migration and Importation Clause: This clause, found in Article I, Section 9, Clause 1, prohibited Congress from passing any laws that would restrict the importation of slaves into the United States until 1808. This clause was a concession to Southern states, ensuring the continuation of the slave trade for at least 20 years after the adoption of the Constitution.
The Fugitive Slave Clause: This clause, found in Article IV, Section 2, Clause 3, required that fugitive slaves who fled to another state be returned to their owners. This provision ensured that slavery would be respected and enforced across all states, even those that had abolished it.
The Thirteenth Amendment: While not part of the original Constitution, the Thirteenth Amendment, ratified in 1865, abolished slavery and prohibited involuntary servitude, except as punishment for a crime. This amendment marked the end of the slave trade in the United States and the beginning of the Reconstruction Era.
The Constitution's treatment of the slave trade reflects the complex and often contradictory nature of the founding document. While it stopped short of directly addressing the morality of slavery, it included provisions that both protected and restricted the practice, reflecting the compromises made during the nation's founding. The eventual abolition of slavery through the Thirteenth Amendment demonstrated a shift in societal values and a move towards a more just and equitable nation.
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The power to regulate trade
The Commerce Clause, outlined in Article I, Section 8, Clause 3 of the US Constitution, grants Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes". This clause is the basis for the federal government's power to regulate trade and has been interpreted and re-interpreted over time by the Supreme Court.
The Commerce Clause was included in the Constitution in 1787, in response to political dissatisfaction with the economic situation at the time, particularly the existence of interstate trade barriers. By granting Congress the power to regulate interstate commerce, the Commerce Clause enabled the creation of a free trade zone among the states. It also removed the power to regulate international trade from the states, allowing the president to negotiate, and Congress to approve, treaties to open foreign markets to American-made goods.
The Constitution does not explicitly define the word "commerce", leading to differing interpretations of the scope of the powers it grants to Congress. Some argue that it refers simply to trade or exchange, while others claim that it describes more broadly the commercial and social intercourse between citizens of different states. Courts have generally taken a broad interpretation of the commerce clause for much of US history.
In Gibbons v. Ogden (1824), the Supreme Court held that intrastate activity could be regulated under the Commerce Clause, provided that the activity is part of a larger interstate commercial scheme. In the 20th century, the Court narrowed its interpretation of the Commerce Clause in what became known as the Lochner era, experimenting with the idea that it does not empower Congress to pass laws impeding an individual's right to enter into business contracts. However, in 1937, the Court shifted back towards a broader interpretation of the clause, holding that any activity with a substantial economic effect on interstate commerce could be regulated by Congress.
In United States v. Lopez (1995), the Court invalidated a statute criminalizing the possession of handguns near schools, finding that there was no reason to think that the states couldn't handle the issue and that the law scored cheap political points without contributing anything substantial. In 2005, the Court rejected the argument that a ban on growing medical marijuana for personal use exceeded the powers of Congress under the Commerce Clause, citing the potential indirect effect on interstate commerce.
The Fourteenth Amendment to the Constitution has also been interpreted as protecting the "right to pursue any lawful trade or avocation, without other restraint than such as equally affects all persons". In the New Orleans slaughter-house cases, Justices Field, Bradley, and Swayne dissented, arguing that this right is one of the privileges of citizens of the United States which cannot be abridged by state legislation.
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Frequently asked questions
Free trade is implicitly mentioned in the Commerce Clause, which falls under Article I, Section 8, Clause 3 of the US Constitution.
The Commerce Clause grants Congress the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes".
"To regulate commerce" can be interpreted as the power to make and prohibit the trade, transportation, or movement of persons and goods between states, foreign nations, or Indian tribes.
The Commerce Clause was included in the Constitution to address the problems of interstate trade barriers and enable states to enter into trade agreements.
The Constitution also mentions state powers over interstate and foreign commerce in alcoholic beverages, the slave trade, and debtor relief laws.
