CHAPTER 5

COMPARATIVE STUDY OF INDIAN FEDERALISM WITH USA,

SWITZERLAND, CANADA AND AUSTRALIA
5.1 Introduction

Federalism refers to the various political power relationships between governments

within the same geographical setting. The application of modern federalism has
developed to the extent that voluntary associations have been restored by government
units. Thus, today federalism builds the ways that various governments concurrently
influence, depends upon, and push away from each other. The most important aspect of
the government is the use of the power, particularly, for the democracies, because
government is the official forcible authority for so many decisions which affect people,
values, and resources. Thus, Federalism is the organizational device through which
governments manage power.1 Entering into treaties and agreements with foreign powers
is one of the features of State sovereignty. No State can separate itself from the rest of
the world in the matter of foreign relations, trade, environment, communications,
ecology or finance since the end of the World War II. Due to globalization and the
huge advances made in communication and information technology, the independent
States have become inter-dependent. Unfortunately, it has received very little attention
in our country in spite of the fundamental importance of the treaty-making power.
Moreover, it cannot be ignored specifically because of the experience of World Trade
Organization. The Agreements signed on Intellectual Property Rights, Trade,
Agriculture and Services are so pervasive that there is a body of opinion, which
honestly thinks that some of the provisions of these Agreements are detrimental to our
national interest. There can be no dispute with the opinion that the power to enter into
treaties, agreements, covenants and conventions has, in some cases, either beneficial or
harmful impact upon our economy, security, life and livelihood of our citizens. It is a
highly effective power. There are so many agreements which contained clauses, having
harmful effects upon our economy, have also been signed during the Uruguay Round of
Trade Negotiations.2

1
Larry N.Gerston, American Federalism: A Concise Introduction, M.E Sharpe, Inc., USA, 2006, p. 5.
2
National Commission to Review the working of the Constitution, “A Consultation Paper on Treaty-
making power under our Constitution”, retrieved from http://lawmin.nic.in/ncrwc/finalreport/v2b2-
3.htm, last visited on 10 June 2013 at 4:45 pm.

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Yues Lejeune has considered that “Federalism consists of a delicate balance between
the unity and the diversity of its components and it is true, specifically with regard to
the foreign policy. Although the principle of the unity of the federal state under
international law does not go against the development of external relations specific on
the sub-national units-whether or not they are governed by international law-it does,
however, imply fulfilling the state‟s international obligations and safeguarding the
coherence of its foreign policy.”3 He has further discussed that “It is true that there are
few sub national units that have been granted powers at international level under the
constitution of the federal state to which they belong. Rather than claiming for
themselves the use of equivalent legal instruments, sub-national units have often
preferred to be effectively associated with the way their state conduct its international
relations. With this in mind, various techniques for participating in the federation‟s
foreign policy attempt to reconcile the formal monopolization of the management of
this policy by the central government with due consideration of the specific interests of
the constituent units.” 4

The changing process of federalizing state powers in foreign relations depends to a

large extent on a state‟s historical, cultural, economic and political conditions. It takes
different forms, and occurs on a different scale in different countries and regions. That
is, it will not necessarily follow only one particular direction. Though the meaning of
federalizing foreign relations is providing more autonomy to the sub-national entities
for the compliance of their rights, it nowhere implies the disintegration of the nation
state‟s power and recognition of the right of secession of particular ethnic groups. 5 In a
federal system, the participating political communities agree to follow some objectives
together and other objectives on their own. More specifically, they agree to establish a
central government and to empower it to make and administer laws in some areas; and
they agree to retain the power to make and administer laws themselves in other areas.
The laws of the Central government apply to the residents of the federation as a whole

3
Yves Lejeune, “Participation of Sub-national Units in the Foreign Policy of the Federation” in Raoul
Blindenbacher and Arnold Koller (eds.), Federalism in a Changing World Learning from Each Other,
McGill-Queen‟s University Press, London, 2002, pp. 97-114, p. 97.
4
Ibid.
5
Bernhard Ehrenzeller (el ed.), “Federalism and Foreign Relations” in Raoul Blindenbacher and Arnold
Koller (eds.), Federalism in a Changing World Learning from Each Other, McGill-Queen‟s
University Press, London, 2002, pp. 53-73, p. 56.

208
whereas the laws of the federating communities-the provinces or states or subunits,
terms that differ from federation to federation apply to those who live within their
respective boundaries. One of the leading students of the federalism Ronald Watts
describes the essential features of the federal system of the government as “a
combination of shared rule for some purposes and regional self-rule for others within a
single political system so that neither is subordinate to others.”6

The federal idea of an agreement or treaty that binds political communities in a larger
whole is as old as the Greek city states that combined together to protect themselves
against an external military threat. Federalism, as it is known today, however, is no
older than the American federal system which was followed by Switzerland (1848),
Canada (1867), Australia (1901), Austria (1920) and Germany (1949). These six are the
oldest of character, although India (1950) followed quickly. Spain (1978) is regarded as
a federation in fact, if not in law. A recent example is Belgium (1993). All these
countries have highly developed industrial and technological societies.7

In this Chapter, the American federalism, being the oldest federalism is discussed along
with three other federal systems like Switzerland, Canada and Australia from which
various provisions are borrowed by India. Thus, an attempt is made by the researcher to
make a comparative study of the federal system of the above-mentioned countries while
focusing on the role and participation of constituent units in shaping the foreign policies
and thereby having an impact of those policies on federal system of these countries and
vice-versa.

5.2 Federalism in United States Of America (U.S.A.)

Larry N. Gerston has asserted in his work that, “In the “over the top” drama of twenty-
first century communications, hyperbole often tramples reality. “Best ever” replaces
“good”, “critical moment” supplants „difficult time”; “unique” substitutes for
“different.” So when American federalism is described as “the great political
experiment” in representative democracy, it is easy to see why such a claim might be
dismissed as just another example of the languages excesses that commonly sprinkle
our daily conversations. But unlike characterizations that often exaggerate beyond the

6
Jennifer Smith, Federalism, University of British Columbia (UCB) Press, Vancouver, 2004, p. 12.
7
Id., pp. 11-12.

209
pale without any basis or fact, American federalism is a great political experiment- a
novel design that has resulted in a template for countless other governments throughout
the world to emulate over the past two centuries.”8 American federalism takes on
different combinations of characteristics while depending upon the circumstances,
values and players related with each issue. Basically, there are four important
characteristics of the federalism i.e. consensus, cooperation, conflict and chaos which
interact with values, issues and policymakers in distinct combinations or patterns.9
There is a substantial impact of international developments on the functioning of all the
governments to which United States of America is no exception. The global trade
agreements played a great role while demanding human rights and fighting against
international terrorism for increasing pressure on centralizing government
responsibilities. All these pressures are making new changes to American federalism
which is at the heart of its constitutional structure. In American federalism, there is
delegation of limited powers and responsibilities to the federal government while
keeping all other powers for the States.10

5.2.1 Historical Background

Charles K. Burdick in Article “The Treaty-Making Power” has asserted that before the
writing and ratification of the Constitution, the original American States were fully
functioning constitutional bodies. There are two reasons for it. Firstly, the American
federal system is not simply a decentralized hierarchy. The states are not administrative
units that exist only to implement policies made by some central government rather they
are fully functioning constitutional polities in their own right, empowered by the
American people the purpose of making a wide range of policies for their own citizens.
Secondly, it is expected by the framers that the states would be the leading policymakers
in the federal system. The powers provided to the federal government are comparatively
few in number which especially deals with foreign and military affairs and national
economic issues, e.g. the free flow of commerce across state lines. Most domestic policy
issues were left to the states to be determined keeping in view their own histories, needs
8
Larry N. Gerston, 2006, p. 5.
9
Ibid.
10
Ellis Katz, “The United States of America: A Federal Government of Limited Powers” in Raoul
Blindenbacher & Abigail Ostein (eds.), Dialogues on Legislative and Executive Governance in
Federal Countries, Vol. 2, Mc-Gill Queen‟s University Press, Canada, 2003, pp. 33-35, p. 33.

210
and cultures. There has been concord of views on one point since from the days of the
Continental Congress, i.e., the treaty-making power must reside solely in the national
government. Though the Continental Congress had no express power to enter into
treaties, yet even before the Declaration of Independence it did not delay to presume that
it was authorized to exercise this power by implication from its character as the only
national organ which had been set up to deal with external affairs, and from its power to
direct the war for independence. It had chosen a committee on June 12, 1776 for
preparation of a plan of treaties to be proposed to Foreign Powers, and in 1778 treaties of
commerce and alliance with France was ratified by the Congress as if without any thought
of submitting them to the several States. The exercise of this power by Congress was later
approved by the Supreme Court of the United States. Various other negotiations for
treaties were undertaken by representatives of the Continental Congress though no others
came to happen before the adoption of the Articles of Confederation. These Articles,
proposed in 1777 but not adopted until 1781, authorized the absolute right to Congress to
enter into treaties. The Constitution while following this established precedent which was
proposed by the Convention of 1787, granted the treaty making power to the national
government, and expressly prohibited its exercise by the States. The making of treaties is
traditionally an executive function.11

In earlier days treaties were not generally the result of personal negotiations by kings and
princes. Now in such a constitutional monarchy as that of Great Britain treaties are still
negotiated and signed on behalf of the sovereign by representatives of the government of
the day. They do not require the approval of Parliament in order to bind the state, but the
practice is followed for giving an opportunity to Parliament to discuss the terms of
important international engagements before they are ratified. The Continental Congress
was a progressive body called together to conduct the struggle for independence being
carried out by the thirteen States. The functions which it exercised were executive in
character as it did not attempt to legislate. Along with performance of its various
functions, it negotiated treaties also. Before the Articles of Confederation were adopted,

11
Charles K. Burdick, “The Treaty-Making Power”, retrieved from https://www.foreignaffairs.com/.../
1932-01-01/ treaty-making-power, last visited on 5 August 2014 at 1:30 pm.

211
the treaties with France were the only ones which became effective after ratified by
consistent action of the Continental Congress.12

5.2.2 Role of States in International Agreements

In 1776, after having independence from the United Kingdom, eleven out of thirteen
States had adopted the Constitution while discarding their colonial charters. The States
were linked together as a Confederation under the Articles of Confederation. When the
international and economic challenges of the post independence years were not met by
the limited union, the States sent delegates to a constitutional convention to, in the
words of the Constitution, “create a more perfect union”. In the United States,
customary international laws have applied by the courts. The United States Supreme
Court while consolidating its earlier decisions held in the famous case of Paquete
Habana that “international law is part of our law, and must be ascertained and
administered by the courts of justice of appropriate jurisdiction as often as questions of
right depending upon it are duly presented for their determination”. The Court for
determining and executing, has given the following guidelines: “where there is no treaty
and no controlling executive or no legislative Act or judicial decision, resort must be
had to the customs and usages of civilized nations, as an evidence of these, to the works
of jurists and commentators who by years of labor, research, and experience have made
themselves peculiarly well acquainted with the subjects of which they treat”.13

Rahmatullah Khan in his Article “Implementation of International and Supra-national

Law by Sub-national Units” has reaffirmed that the Paquete Habana ruling is more than
a century old but it is considered good even today. The respect which is shown by the
United States Judiciary for international law is conditioned by the position given to the
treaties in its Constitution. Article II of Constitution of United States provides that the
President “shall have Power, by and with the Advice and consent of the Senate, to make
Treaties, provided two-thirds of the Senators present concur”. The President of the
United States has exercised this power to commit the nation to hundreds of international
obligations. The President of the United States has affirmed many additional obligations

12
Charles K. Burdick, “The Treaty-Making Power”, retrieved from https://www.foreignaffairs.com/.../
1932-01-01/ treaty-making-power, last visited on 5 August 2014 at 1:30 pm.
13
Paquete Habana v. United States, 175 US 677, 700-21 (1900) at 700.

212
without going through the process of Article II through the means of executive
agreement.14

The two famous instances in which Senate refused to ratify or approve the treaty signed
by the President are (a) the Treaty of Versailles concluded at the end of World War I
and (b) Comprehensive Test Ban Treaty (CTBT) on nuclear tests. President Wilson,
who was actually behind the Versailles treaty, signed the treaty together with allied
nations but when it was presented to the Senate, it rejected the same while effectively
withdrawing U.S.A. from European affairs until the developments in Germany under
Hitler brought it back into it. Even President Clinton and his predecessors had made a
very good effort for the Comprehensive Test Ban on nuclear tests. Therefore, in view of
this constitutional position, a practice has developed in that country according to which,
the Senators i.e. important persons among them, are associated with treaty making from
the very beginning so that it may be easier for the President to get the treaty ratified
later by the Senate. There is a distinction made between treaties and agreements in the
U.S.A. For example, the Vienna Convention on the Law of Treaties applies only to
treaties and not to International Agreements under Article 2. The agreements and
particularly, those that are known as Executive agreements are entered into and signed
by the President in exercise of his Executive power, since such agreements are not
considered treaties. These type of agreements are predicted to be such agreements
which are related to foreign relations and military matters and do not affect the rights
and obligations of the citizens. Moreover, for trade agreements, a different procedure is
developed. Since the Congress has the constitutional authority to regulate commerce
with foreign nations under Article 1 of the Constitution, such treaties are subject to
ratification by both Houses but only by a simple majority. 15

According to Article VI of the Constitution of the United States, “all Treaties made, or
which shall be made, under the authority of the United States, shall be the supreme law
of the Land”. The Supreme Court has held that this supremacy applies only to treaties
which are self executing. This supremacy clause has had interesting impacts on the
14
Rahmatullah Khan, “Implementation of International and Supra-national Law by Sub-national Units”
in Raoul Blindenbacher & Abigail Ostein (eds.), Dialogues on Legislative and Executive Governance
in Federal Countries, Vol. 2, Mc-Gill Queen‟s University Press, Canada, 2003, pp. 115-129, p. 116.
15
National Commission to Review the Working of the Constitution, “A Consultation Paper on Treaty-
making power under our Constitution”, retrieved from http://lawmin.nic.in/ncrwc/finalreport/v2b2-
3.htm, last visited on 10 June 2013 at 4:45 pm.

213
federal system of the United States. The federal constitution of the United States has
given the conduct of the foreign policy to the Central Government. It clearly provides
that treaty-makers may make supreme law binding on the states as to any subject, and
notion of the states‟ rights should not be contended as hindrances to the full
implementation of the treaty obligations. 16 The interpretation of this clause is primarily
based on the famous decision of the Supreme Court in which the court upheld “a
migratory bird protection statute as a valid implementation of a treaty with Great Britain
while dismissing the argument that the statute unconstitutionally interfered with
Missouri‟s rights in violation of the Tenth Amendment. In a statement that would
delight the hearts of today‟s environmentalists, Justice Holmes observed in 1920 that
the treaty in question concerned “a national interest of very nearly the first magnitude”
that could be protected “only by national action in concert with that of another power”
It is an obligations of the States that they must follow the treaties not because it is
required by international law, but because by adopting a treaty, the federal government
is engaging in the exercise of the foreign relations powers”.17

Thus, Treaties are primarily agreements between two or more states, binding the
governments of those states. Municipal law, on the other hand, includes rules of conduct
for the individual within the state. Generally, outside of the United States, treaties are
not held to affect the rights or duties of individuals. If a treaty is negotiated by the
British Government as a result of which it is desired to impose duties or to confer rights
upon individuals, an act of Parliament will be required to achieve such purpose, though,
the treaty will not be able to achieve that goal. But how would such a doctrine operate
in a union in which all control over international affairs is vested in the national
government, while the States reserve to themselves large spheres of legislative action?
John Jay‟s, the Secretary for Foreign Affairs view was strongly expressed in a
resolution adopted by Congress that, “State legislation might conflict with treaty
obligations, and the national government might have no power to legislate on the
subject in question. The State legislation would constitute the rule which would control
individual action, and the national government would be reduced to the embarrassing
necessity of attempting to explain the constitutional situation to the other parties to the

16
Rahmatullah Khan, 2003, p. 118.
17
Missouori v. Holland, 252 US at 435.

214
treaty, and of begging the States to conform their legislation to treaty obligations so that
the good faith of the nation might not be impugned. Though the Articles of
Confederation contained no declaration as to the status of treaties made by Congress,
the necessity of their having controlling force throughout the country was very strongly
felt, and the view was widely expressed that they had the force of law by implication”.18
The Courts of several States held that state statutes in conflict with the treaty of peace
were unenforceable. Though statutes in conflict with the treaty were repealed in a
number of States, the opinion was expressed by Jefferson, when he was Secretary of
State, and by others, that this was done only to prevent confusion and to take invalid
laws off the books. Globalization, international terrorism and the demand from human
rights are likely to affect American federalism in much the same ways, with the powers
of the federal government increasing and further driving towards cooperative
federalism. For example, United States is a signatory of both the North American Trade
Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT). These
trade agreements are binding international agreements, which the United States must
fulfill irrespective of its internal political arrangements. The progressive nature of the
current trade agenda has aroused a new round of sovereignty debate in the United
States, with critics of the international trade system becoming more articulate due to the
largest trade deficit in American history and a significant decline in domestic
manufacturing jobs. While most of the current sovereignty debate among United States
scholars focuses on the nation or state and its relation to the world trade system, the
relationship between regional and local autonomy and the world trade system has
largely been ignored. This exclusion is likely based on the assumption that United
States federalism in the international field is a dead letter.19

However, traditional concept of sovereignty is changing to include a greater role for

regional and local governments in foreign affairs. Equally important, and perhaps
incidentally linked to the changing nature of sovereignty, is the continuing development

18
Charles K. Burdick, “The Treaty-Making Power”, retrieved from https://www.foreignaffairs . com /.../
1932-01-01 /treaty-making-power, last visited on 5 August 2014 at 1:30 pm.
19
Edward T. Hayes, “Changing Notions of Sovereignty and Federalism in the International Economic
System: A Reassessment of WTO Regulation of Federal States and the Regional and Local
Governments Within Their Territories”, North-western Journal of International Law & Business,
Volume 25, 2004, retrieved from http:// scholarlycommons .law .northwestern .edu / cgi /viewcontent
.cgi?article..., last visited on 10 November 2014 at 11:48 pm. (Also cited in http://www.
leakeandersson.com/images/pubs/22.pdf)

215
of the federal distribution of powers over foreign affairs, particularly in the United
States. The new trade agenda unmistakably involved regional and local autonomy as
current and future WTO disciplines reach further and deeper into areas regulated by
sub-federal governmental units. The GATT/WTO agreements contain multiple specific
provisions addressing the distribution of power in federal systems, all designed after the
general “federal clause” in GATT Article XXIV:12, “which requires each Member to
employ such “reasonable measures” as “may be available to it” to ensure compliance by
regional and local governments with GATT obligations”. Article XXIV:12 contains
unresolved ambiguities regarding whether and to what extent federal nation/states are
obligated to secure compliance by regional and local governments with GATT/WTO
obligations. The United States has adopted conflicting positions in separate GATT
disputes regarding the interpretation and application of Article XXIV: 12 and no GATT
Panel has conclusively interpreted the ambiguous provisions. While the ambiguities
may have served the GATT/WTO well during its developmental years, they now serve
as probable obstructions to the system‟s growth.20

Therefore, the United States Supreme Court could declare State regulations invalid, not
because they violate the United States Constitution, but because they violate
international agreements.21 Most observers suggest that the authority of the states will
be further destroyed because the policies of the state on such matters like economic
development, environmental protection and professional licensing will be subject to the
terms of these international agreements, as well as to the structures of the U.S.
Constitution. Though these observers are right, but there is another aspect to these
international agreements that might enhance state authority. Under NAFTA, for
example, the American states are guaranteed at least a consultative role in implementing
the agreement. It will be interesting to see how the states that make up the American,
Canadian and Mexican federations will be affected by this emerging “federation of
federations.”22

20
Edward T. Hayes, “Changing Notions of Sovereignty and Federalism in the International Economic
System: A Reassessment of WTO Regulation of Federal States and the Regional and Local
Governments Within Their Territories”, Northwestern Journal of International Law & Business,
Volume 25, 2004, retrieved from http:// scholarlycommons. law. northwestern. edu /cgi / viewcontent
.cgi?article..., last visited on 10 November 2014 at 11:48 pm. (Also cited in http://www.
leakeandersson.com/images/pubs/22.pdf)
21
Ellis Katz, 2003, p. 34.
22
Ellis Katz, “American Federalism, Past, Present and Future”, retrieved from www.ucs.louisiana.edu/
…as2777/ amgov/federalism.html, last visited on 6 August 2015 at 2:00 pm.

216
5.3 Switzerland

Switzerland is a remarkably decentralized federation that engages several constitutional

devices to prevent any shift of powers to the central government. While most federal
countries have shown a trend of centralization because of globalization, cantonal and
local governments in Switzerland still control the majority of government expenditures
and can influence important national policy decisions. 23 The Cantons i.e. the constituent
units of the federation, based on a highly decentralized federalism, maintained their far-
reaching original autonomy now as self rule within a federation, and continued to share
their sovereignty with the federation. The constitutional aspect of the Switzerland‟s
distribution of powers reflect a “bottom-up” construction of the federation and depends,
finally, on the residual powers of the Cantons and, in some instances, even
municipalities. As a result, the Swiss Constitution does not distribute the powers
between the Confederation and the Cantons in a final list, and it does not provide
powers for the Cantons. In principle, it concludes exclusively the powers delegated to
the Confederation. With regard to federalism, the clear trend towards more
centralization has been balanced by increasing opportunities for the Cantons to
participate in the decision-making process at the central level, the point being to
maintain the balance between shared-rule and self-rule.24

Swiss foreign policy aims at lessening world poverty while promoting respect for
human rights, democracy, the peaceful coexistence of nations, and the preservation of
natural resources under Article 54(2). The proceeding provision drafts the various
pillars of Swiss foreign policy, which are:25

(i) the relationship between Switzerland and Europe;

(ii) peace and security; and

(iii) international development.

23
Sarah Byrne & Thomas Fleiner, “Switzerland: Seeking a Balance between Shared Rule and Self-Rule”
in Raoul Blindenbacher & Abigail Ostein (eds.), Dialogues on Legislative and Executive Governance
in Federal Countries, Vol. 3, Mc-Gill Queen‟s University Press, Canada, 2005, pp. 30-34, p. 30.
24
Thomas Fleiner, “Swiss Confederation” in Akhtar Majeed (ed.), Distribution of Powers and
Responsibilities in Federal Countries, McGill-Queen‟s University Press, London, 2005, pp.265-295,
pp. 266-267.
25
Ibid.

217
5.3.1 Historical Background

Switzerland‟s federal constitution, adopted in 1848 after a civil war, was a compromise
that sought to contain both the liberals (mainly Protestants) promoting a unitary state
and conservatives (mainly Roman Catholics) were defending the former
Confederations. It became the second federation to come into existence which was
strongly influenced by American federalism. The Cantons maintained their original
autonomy, now as “self-rule” within a federation, and shared their sovereignty with the
federation.26 Ramesh Chandra Ghosh in his book entitled “Treaties and Federal
Constitutions: Their Mutual Impact” asserted that the Confederation required this power
so long as it could not become a State independent of external control. When Uri,
Schwyz and Ultewalden formed the perpetual league in 1291 they were not sovereign
Cantons but slaves of Hapsburgs. In 1513, the membership of the Confederacy
increased to thirteen Cantons, and it was agreed that they would come to provide
assistance to others in case of foreign attack, and will settle their disputes by arbitration.
It was further agreed by the Covenants of Sempach (1386) and of Stanz (1481) that they
would jointly decide upon war and sue it in accordance with certain common rules
while giving up separate alliances and empower the Diet of the Confederation to help a
Canton to curb an internal revolt. The reformation drove the Cantons into adverse
camps and the Diet disappeared during the course of the Thirty years war. At its close,
the Diet was revived, and the European Powers recognized the Confederation by the
Treaty of Westphalia (1648) at the same time its release from the dominion of the
Empire. But the Cantons do not seem to have surrendered any part of their real
sovereignty to the Diet; for they continued entering into treaties with foreign powers
independently of it. 27

According to Ramesh Chandra Ghosh, before the French invasion of Switzerland in

1798, the Confederation existed only in name. There was no central government, no
common citizenship, and the thirteen Cantons honored the decision of the Diet more in
the breach than in observance. But they lost this wild independence, when France, after
her easy victory over them, established the Helvetica Republic “une et indivisible”

26
Sarah Byrne & Thomas Fleiner, 2005, Vol. 2, pp. 30-31.
27
Ramesh Chandra Ghosh, “Treaties and Federal Constitutions: Their Mutual Impact”, World Press
Pvt. Ltd., Calcutta, 1961, pp. 9-10.

218
(Article 1). The new Constitution “placed sovereign powers in the totality of the citizens
and declared representative democracy to be the future form of the Swiss State”. When
this Constitution failed to function properly, it was replaced by the Act of Mediation of
1803 which set up a federal form of the government. The old Cantons reappeared and
with them new six Cantons became constituent units of the semi-sovereign federation.
The Act provides to the Federal Diet the power to declare war, to conclude treaties of
peace, alliance, commerce and capitulations. The Cantons were given residuary powers,
and could make agreements with foreign states on Cantonal subjects but only with the
consent of the Diet. With the decline of Napoleon, the Act of Mediation disappeared
and the Cantons attained a large part of their former sovereignty while transferring the
residue to a Diet set up by the “pact federale” of August 7, 1815. Thus, a loose
confederation was re-established. The Cantons kept, “the right of concluding
capitulation and treaties on the subjects of economic regulation and police relations
based on the conditions that they would be previously approved by the Diet and would
not be repugnant to the “pacte federale” the existing alliances or the constitutional rights
of Cantons not parties to such treaties”. The limited treaty-making power of the Diet
was swiftly falling pari-passu with the withdrawal of loyalty by the Cantons who
violated the “pacte” when it was in accordance with their purpose and formed mutually
belligerent leagues like the “Concordat of Seven”, “the League of Sarnen”, “and the
Sonder-bund”. It was only after the Civil War of 1847 that the “pacte federale” of 1815,
which was significantly a treaty among sovereign Cantons, was replaced by a Federal
Constitution adopted by a majority of the Cantons and of the voters participating in the
referendum of August 5-September 2, 1848. “A loose „Statenbund‟ with a doubtful
international personality being thus, transformed into a strong Bund estate, a real state
having a central government capable of enforcing its laws and implementing its
international agreements against any recalcitrant Cantons. Thus, Switzerland acquired
the status of a full international Person with a treaty-making power equal to that of any
sovereign member of the Family of Nations”.28

5.3.2 Role of Cantons in International Agreements

Thomas Fleiner in his Article “Swiss Confederation” asserted that the Constitution,
while considering its importance to Switzerland does not expressly mention foreign

28
Ramesh Chandra Ghosh, 1961, pp. 10-11.

219
trade policy except for Article 101(1), which allocates to the Confederation, the power
to safeguard the interests of the Swiss economy abroad. Article 42 of the Switzerland‟s
Constitution provides the principle that, “the federal government possesses all those
powers the federal Constitution affords to it”. Article 54(1) state, “the foreign relations
and treaty-making are the prerogative of the sovereign state and area a federal matter.
However, the Cantons can participate in the preparation of federal policy decision that
concern their powers or essential interests”. In addition, the Confederation, in a timely
manner, has to fully inform and consult with the Cantons. Furthermore, whenever the
powers of Cantons are concerned, their position has particular pressure. In such cases, if
it is appropriate as provided under Article 55, the interested Cantons will participate in
international negotiations. As a rule, relations between the Cantons and foreign
countries are administered by the Confederation on behalf of the Cantons. However,
according to Article 56 (1), the Cantons are authorized to conclude treaties with foreign
nations.29 The Constitution requires that:

(i) The matters be within the scope of the powers of the Cantons (Article 56 (1));
(ii) The treaty between one or more Cantons and a foreign nation is not contrary to
the law or interests of the Confederation or to the laws of other Cantons (Article
56 (2));
(iii) The Cantons inform the Confederation before the conclusion of a treaty (Article
56 (2)). The cantons are allowed to deal directly with lower ranking foreign
authorities (Article 56 (3)) of the Constitution.

He further insisted that in all other cases, the Confederation will act on behalf of the
Cantons. In the 1999 Constitution, the element of cooperation has, as a rectification for
decreasing cantonal autonomy, achieved importance. In the context of foreign affairs,
the Constitution emphasizes the role of the Cantons in the decision making process as
well as the relation between the Cantons and foreign nations. While complying with the
concept of cooperative federalism, Article 55 (1) accommodates the Cantons into the
foreign policy decision-making process when their power and essential interest are at
stake. Additionally, in order to avoid centralization through foreign policy, the Federal

29
Thomas Fleiner, “Swiss Confederation” in Akhtar Majeed (ed.), Distribution of Powers and
Responsibilities in Federal Countries, McGill-Queen‟s University Press, London, 2005, pp. 265-295,
pp. 282-284.

220
Participation Act reconfirms the role of the Cantons in the federal foreign policy
process, notwithstanding without adding anything new to Article 55. Besides, the right
of the Cantons to be timely and fully informed, and the obligation of the Confederation
to consult with it under Article 55(2), the Constitution authorizes the Cantons further
participatory rights in international negotiations under Article 55(3). The Conference of
the Cantonal Governments was created by inter-cantonal agreement in 1993 in
consequence of the inadequate flow of information during the negotiations for entry into
the European Economic Space in the 1990s. The conference is not entirely concentrated
either on foreign policy or on European Union policy; rather its objective is to
coordinate the decision-making process among Cantons so that they can exercise joint
influence at the federal level. All twenty six cantons are members of the conference
whereas the vote of eighteen of them is enough to ratify a decision.30

In general, the Swiss political system places heavy emphasis on a broad consensus
supporting its decisions. Its orientation has helped Switzerland to maintain peculiar
stability over the last hundred and fifty years. One of these consensus-based devices is
the need for the federal executive to have the sanction of the Parliament for the
ratification of the international treaties. Article 166, Section 2, of the Switzerland
Constitution states, “The Federal Assembly shall approve international treaties, with the
exception of those that are concluded by the Federal Council under a statutory provision
or an international treaty.” The Federal Council has the power to ratify international
treaties of limited importance without parliamentary approval. Such treaties include, but
are not limited to those that:31

(i) Do not create new obligations for Switzerland or do not waive any existing
rights;
(ii) Help to implement treaties approved by the Legislative Assembly;
(iii) Certain issues within the powers of the Federal Council, and whose regulation in
an international treaty seems necessary;
(iv) Answer primarily the authorities, govern questions of an administrative-
technical nature, or do not involve considerable financial expenditure.

30
Thomas Fleiner, 2005, pp. 282-284.
31
Markus Schefer, “International Treaties and the Distribution of Powers in the Federal State: The case
of Switzerland” in G. Gopa Kumar (ed.), Foreign Policy, Federalism and International Treaties, New
Century Publication, New Delhi, 2011, pp. 1-12, p. 7.

221
All other treaties which are of some importance need parliamentary approval. Since
both chambers of the parliament will provide approval for ratification but the Cantons‟
views will be brought to convey mainly in the Council of States. Additionally, under
some circumstances, public referendum tends to safeguard the views of the Cantons in
concluding international treaties. Article 141, Section 1 (d) of the Constitution allows
for a public referendum against international treaties in the following situations where
international treaties have:32

(i) Unlimited duration and may not be terminated.

(ii) Provided for accession to an international organization.
(iii) Contained important legislative provisions or whose implementation requires the
enactment of federal legislation.

Markus Schefer in his Article “International Treaties and the Distribution of Powers in
the Federal State: The case of Switzerland” affirmed that most of the treaties of some
importance covered under one of the above-mentioned three categories. However, the
referendum is, not compulsory as it is with respect to the accretion to super national
organization and organizations for collective security. So far, the implementation of the
international treaties are concerned, no doubt the federal government has the power to
enter into international treaties in all areas of the life, though, it is not competent to
implement all of them. The Cantons have to implement a treaty though it covers a
subject-matter not given to the federal government by the Constitution, but reserved for
the Cantons.33 Thus, federalism is one of the basic elements of the Switzerland‟s
political culture and its political system. Swiss federalism is facing many new
challenges and appears to be in the need of reform. The growing Globalization and
Europeanization has posed a new challenge for the Switzerland‟s politics which in
result decreasing national autonomy and sovereignty. The Swiss government adopts
many EU regulations and seeks to make new domestic regulations EU compatible so
that Switzerland should not be cut-off from the market.34

32
Markus Schefer, 2011, p. 8.
33
Id., p. 10.
34
Fritz Sager & Christine Zollinger, “The Swiss Political System in Comparative Perspective”, in
Christine Trampusuch & Andre Mach (eds.), Switzerland in Europe Continuity and Change in Swiss
Political Economy, Taylor and Francis, New York, 2011, pp. 27-42, pp. 31-32.

222
Thus, according to Markus Schefer, Swiss Federalism endeavors to make a balance
between self-rule and shared-rule. The constitutional revision of 1999 is contrary to a
centralization convinced by Switzerland‟s increasingly active and open foreign policy
that warned to upset this balance. Above all, it grafted the Cantons with more
opportunities to participate in the confederation‟s conduct of foreign relations. The
conflicts in the early 1990s between the confederation and the Cantons regarding
foreign policy seems to have been sought out for the time being: intergovernmental
relations are again working according to the principle of cooperative federalism. The
conduct and content of foreign relations are today combative issues more in civil
society; many citizens feel they are not participating in and benefitting from the
activities of all three orders of government as they should be. Swiss foreign policy must
prove itself to be representative as well as logical and effective. The Federal Council
has generally viewed self-rule and shared rule in foreign relations as advantageous for
both the confederation and the cantons. It is believed by the Cantons that their
participation in the confederation‟s foreign policy and their relations with foreign
countries increase democratic co-determination, the attachment of citizens to their local
authority, and the legitimacy of foreign policy generally. 35

5.4 Canada

Canada varies from other established federations, as it contains two entirely different
views of its federal structure. From the outset, francophone Quebeckers have
understood Canada as an agreement between two equal partners and founding cultures,
i.e. French and English. Though Americans intentionally broke with British governance
traditions, yet Canadians remained loyal to them. Canada superimposed the British
Parliamentary system with a federal system to entertain the different interests of English
Canada and Quebec. This structure allowed the two levels of the government to operate
freely within their respective spheres of powers.36 The relationship between Canadian
Federalism and foreign policy is very important and there are three reasons for it:37

35
Daniel Thurer and Malcolm Maclaren, 2009, p. 288.
36
Thomas. O. Hueglin, “Canada: Federalism Behind (Almost) Closed Doors” in Raoul Blindenbacher &
Abigail Ostein (eds.), Dialogues on Legislative and Executive Governance in Federal Countries, Vol.
3, Mc-Gill Queen‟s University Press, London, 2005, pp. 13-15, pp. 13-14.
37
Andre Lecours, “Canada” in Hans Michelmann (ed.), Foreign Relations in Federal Countries,
McGill-Queen‟s University Press, London, 2009, pp. 114- 140, p. 115.

223
a) the provinces play a significant role in treaty implementation which means that
there are typically intergovernmental relations surrounding treaty negotiations;

b) the international action of some provinces is quite developed and includes the
presence of offices abroad, conducting formal visits and missions and signing
international agreements;

c) the claims of Quebec for an increased international role pose a serious dilemma
for the federal government, even to the point of presenting implications for
national unity.

Andre Lecours in his Article “Canada” said that in Canada, the international roles of the
provinces are very important question as the country has always been very active
internationally. The international action of Canada until 1930s was bound by its
dominion status in the British Empire, which meant that the foreign policy of the
country needed to follow that of the United Kingdom. When Canada became a fully
sovereign international actor, its foreign policy and international involvement made it a
classic middle power. Canadian governments have invested in a wide collection of
international organizations such as World Trade Organization (WTO), the World Health
Organization (WHO), and various UN agencies, such as United Nations Education,
Scientific, Cultural Organization (UNESCO) and the United Nation Conference on
Trade and Development (UNCTAD).38

5.4.1 Historical Background

The treaty-making power of the Dominion of Canada is wholly centralized in the

Central Government and not a part of it is exercisable by the Provinces. The British
North America Act, 1867 is very peculiar about the powers of the Executive; and
especially about the treaty-making power. No doubt, Section 132 of the Act provides
powers to the Dominion Parliament to implement a treaty between the British Empire
and foreign countries. It says, “Parliament and the Government of Canada were
empowered to perform “the obligations of Canada or any province thereof, as part of
the British Empire, towards foreign countries arise under Treaties between the Empire
and such other foreign countries”. But these treaties were made by the imperial
executive responsible to and controlled by the imperial Parliament and ceased to be
38
Andre Lecours, 2009, p. 117.

224
made when Canada got the status of full sovereign State. There are no such provisions
in the Act which expressly provide treaty-making power in the Dominion Executive or
distributing this power between it and the provincial governments. Actually, it was out
of the imaginations of anybody in 1867 that the Dominion would ever make treaties
with foreign powers independently of the Imperial Government. The Privy Council in
late 1919 had made observations through Lord Haldane that, “the omission of any
provision in the British North America Act corresponding to Section 61 of the
Commonwealth of Australia Act was very significant and sufficient “to negative the
theory that the Governor General of Canada is made a Viceroy in the full sense”, and to
nullify the assumption that prerogative powers other than those contained in his
commission had passed to him”.39

But this opinion of Privy Council within a decade became an antiquated as Dominion
Government had participated in the Peace Conference, while signing the Peace Treaties
jointly with the British diplomats, represented Canada in the League of the Nations,
independently concluded the Halibut Fisheries Treaty with the United States. The
practice followed in the conclusion of the Halibut treaty was approved by the Imperial
Conference of 1923. The powers of the Dominion to conclude agreements in inter-
governmental form which excluded the possibility of Royal intervention were
recognized by the Conference of 1926. Moreover, two resolutions were passed by the
Conference amongst which one was regarding the status of Dominions, which declares
that the Dominions are sovereign in their external affairs like Britain and the other one
was regarding the status of their Governors-General which announces that the
Governor-General is “the representative of the Crown holding in all the essential
respects the same position in relation to the administration of public affairs in the
Dominion as is held by His Majesty the King in Great Britain, and that he is not
representative or agent of His Majesty‟s Government in Great Britain”.40

So far the opinion of Privy Council in Bonanza case is related to the status and powers
of the Governor-General of Canada lost all its relevance within ten years. The Royal
prerogative of giving recognition by the Imperial government of the constitutional
validity of International agreements made by the Dominion Government in the form of

39
Bononza Creek Gold Mining Company v. The King, (1916) 1 A.C. 566, 586.
40
Ramesh Chandra Ghosh, 1961, pp. 45-46.

225
conventions, protocols, exchange of notes, etc. remain continued. The Privy Council
impliedly recognized this mode of ratification till 1927. But in 1933 and again in 1935,
Keith expressed the view that “the vital external prerogatives”, including that of
concluding treaties, could not be regarded as having passed to the Dominion Governors-
General merely by virtue of the Resolutions of the Imperial Conferences of 1926 and
1930. In 1935 Canada adopted three draft conventions of the I.L.O relating to Hours of
Work, Weekly Rest and Creation of Minimum Wage Fixing Machinery. The
instruments of ratifications were signed and sealed by Mr. Bennet, Prime Minister and
Secretary of State for External Affairs after the conventions were approved by the
Parliament and the Governor-General in Council.41

While determining the judicial validity of these three implementing statutes, Chief
Justice Duff said that, “The conventions were properly ratified. While rejecting the
contentions of some Provinces that the Dominion Government had no authority to
conclude agreements with foreign states, Chief Justice Duff said that the Imperial
Conference of 1926 categorically recognizes treaties in the form of agreements between
Governments in which His Majesty does not formally appear, and in respect of which
there has been no Royal intervention. Although the Chief Justice admitted that
crystallization of constitutional usage into a rule of constitutional law is a slow process
extending over a long period of time, yet in view of post-war developments, he thought
that time had come when the usages embodied in the Resolutions of the Imperial
Conferences must be recognized by the Courts as having the force of law”.42

Thus, it is highly believed by the Chief Justice in Labor Conventions Case that there
was sufficient delegation of royal prerogative to the Dominion executive for the validity
of ratification of the convention in question. He further said that “the authority of the
Dominion Government to conclude international agreements could be found in the
general clause of section 91 whereas the subjects of the agreements with foreign
countries is not one of the subjects enumerated in Section 92”. In the views of Chief
Justice Duff, the Dominion Parliament had the power to determine the conditions upon
which international agreements should be entered into as well as the manner in which
they should be performed. In this case, the courts were being equally divided as Davis

41
Ramesh Chandra Ghosh, 1961, pp. 47-48.
42
Attorney General for Canada v. Attorney General for Ontario, (1936), 3 D.L.R, pp. 673, 691 and 701.

226
and Kerwin JJ. agreed with the views of the Chief Justice Duff whereas Justice Reinfret,
Justice Cannon and Justice Crocket were of the view that it was directly against the
intendment of the British North America (B.N.A) Act that the king or the Governor-
General should enter into an international agreement dealing with the matters
exclusively covered within the jurisdiction of the Provinces solely upon the advice of
the federal Ministers. It would be fatal to the validity of the ratification of the
Conventions if the dominion government is failed to submit the convention to the
provinces for their approval.43

Therefore, the appeal was taken by special leave to the Privy Council. Lord Atkins
while delivering the opinion of the Committee said that “Counsel did not suggest any
doubt as to the international status which Canada had now attained, involving her
competence to enter into international treaties as an international juristic person.
Questions were raised both generally as to how the executive power was to be exercised
to bind Canada, whether the prerogative right of making treaties in respect of Canada,
was now vested in the Governor General in Council or his Ministers, whether by
constitutional usage or otherwise….Their Lordship mention these points for the purpose
of making it clear that they express no opinion upon them”. The Committee thereby left
three important questions unanswered:44

i) Is the treaty-making power of Canada exclusively vested in the Dominion

Government?

ii) How is this power to be exercised so as to bind Canada validly in international

law?

iii) Can the Dominion Government make treaties on Provincial subjects without the
consent of the Provincial Governments?

The Committee declared the three enabling statutes ultra vires of the Parliament of
Canada; but its silence on the other points gave birth to various speculations. Thereafter,
in the same year, the Dominion Parliament passed the Seals Act which provides Canada
with a great Seal and enables the Governor General to ratify treaties concluded in the
Heads of States form. But on the basis of decision of Privy Council in British Coal
Corporation case, many were of the opinion that, “in the absence of an Imperial Act

43
British Coal Corporation v. The King, (1935) A.C. 500, 519.
44
Ibid.

227
endowing the Dominion Parliament by its express terms or by necessary intendment,
with the authority to curtail the Royal prerogative, the position of the Seals Act was not
constitutionally very strong”. In 1947, the opportunity for the appointment of the
Governor-General for Canada was availed by Prime Minister Mackenzie King for the
issuance of new Letters Patent by His Majesty while authorizing the Governor-General
to exercise all the prerogative powers of the Crown. Clause 2 and 3 of the new Letters
Patent are as follow:45

Clause II: “And We do hereby authorize and empower our Governor-General with the
advice of our Privy Council for Canada or of any members thereof or individually, as
the case requires, to exercise all powers and authorities lawfully belonging to us in
respect of Canada….”

Clause III: “And We hereby authorize and empower our Governor-General to keep and
use Our Great Seal of Canada for sealing all things whatsoever that may be passed
under Our Great Seal of Canada.”

In 1948, a statement was made by Prime Minister St. Laurent in the House of Commons
that did not limit the King‟s prerogatives but made it possible for the Government of
Canada “to determine, in any prerogative matters affecting Canada, whether the
submission should go to His Majesty or to the Governor-General”. Thus, now it is
admitted by all legal purist that the Dominion Government has full treaty-making
power. The British North America Act provides power to Provincial Legislature to
legislate only on certain enumerated subjects of which the subject of agreements with
the foreign countries with respect to matters within their legislative competence is not
one. The Act does not contains any provisions like those in the Constitutions of the
Unites States and Switzerland which permit the member-States limited power to make
agreements with the consent of the Federal Government. As Chief Justice Duff said
that, “the Lieutenant- Governors of the Provinces do not in any manner represent His
Majesty in external affairs….the Provincial Governments are not concerned with such
affairs”. Thus, it may be summarized that the British North America Act, 1867, the
constitutional position of the Provincial Governors, the Letters Patent of 1947, as well
as the treaty-making practice in Canada since 1919, have totally foreclosed the

45
British Coal Corporation v. The King, (1935) A.C. 500, 519.

228
possibility of the exercise of the treaty-making power by the Provinces even with
respect to subjects within their legislative competence. On the other hand, the
limitations upon the legislative competence of the Dominion Parliament to implement a
treaty made by the Dominion Executive on a Provincial subject emphasizes the need of
extra-constitutional Dominion-Provincial cooperation in the conclusion of such a
treaty.46

5.4.2 Role of Dominions in International Agreements

In 2008, the Canadian government adopted a new policy under which “members of the
House of Commons may review and discuss the treaty . . . before Canada formally
agrees to ratify it”. The news release issued at that time underlines that “the government
will maintain the executive role in negotiating agreements” and “the legal authority to
decide whether to ratify the treaty”. Parliament, therefore, has only a non-binding
consultative role at a point when negotiations have been completed and the content of
the treaty cannot be changed. Moreover, provincial business interests have influenced
not only Canadian foreign trade policy but also the development of international norms
and standards. Specific examples include the WTO Agreement on Subsidies and
Countervailing Measures (SCM), the General Agreement on Trade in Services (GATS),
the North American Free Trade Agreement‟s (NAFTA‟s) service provisions, and recent
agreement on Wines and Labeling. The impact of these actors differs among and often
within specific sectors which is discussed under following three sub-headings.47

5.4.2.1 Agriculture

Christopher J. Kukucha in his book entitled “The Provinces and Canadian Foreign
Trade Policy” has alleged that in the case of agriculture and the WTO, the decision of
Canada to reject US proposals related to Article 2.2 of the Agreement on Subsidies and
Countervailing Measures (SCM) was directly linked to sub federal subsidy programs.
Though Agriculture was a combative issue during the NAFTA and Uruguay Round
Negotiations, both agreements had only a prudent impact on Canadian trade policy.
According to Grace Skogstad, the WTO‟s Agreement on Agriculture was remarkable
for its lack of eagerness. The earlier quota system for dairy, poultry, and eggs was

46
Ramesh Chandra Ghosh, 1961, pp. 49-50.
47
Christopher J. Kukucha, The Provinces and Canadian Foreign Trade Policy, UBC Press, Toronto,
2008, p. 98.

229
replaced with tariffs, but these were set at higher average rates than previous import
quotas. Additionally, Canada had already reduced domestic aggregate supports by the
amounts required in the agreement and was already reforming the grain sector in
relation to income safety nets. As part of its deficit reduction strategy, Ottawa had also
removed export grain subsidies in its 1995 federal budget, in this way exceeding the 36
percent target set by the WTO. Even in the sensitive supply-managed sectors, the
Canadian government met and in some cases outweighs WTO targets.48

He further said that finally, as compared to Europe and the United States, Canada now
had one of the lowest transfers as a percentage of total value of production, especially in
terms of wheat. The WTO Subsidies and Countervailing Measures (SCM) Agreement
also has implications for agriculture. The final texts of the agreement serves as another
example of the provinces‟ impact on the Uruguay Round talks. There was considerable
American pressure to alter Article 2.2 of the SCM, which provides that “the setting or
change of generally applicable tax rates by all levels of government entitled to do so
shall not be deemed to be a specific subsidy for the purposes of this Agreement.” But
the Canada rejected this as it posed a threat to regional subsidy programs. As one
official pointed out, “the US proposal would have made provincial programs counter
available and all provinces, not simply Ontario and Quebec, opposed it. The other
important factor, he suggested was that, “the regional subsidies in the US are primarily
state-driven programs, whereas in Canada the provinces rely almost exclusively on
funding from the federal government”.49

5.4.2.2 Services

According to Christopher J. Kukucha, another specific interest for Canadian provinces

is services. During the NAFTA and Uruguay Round negotiation, several provinces did
not have well developed positions for this policy area. In fact, both levels of the
government were uncertain about the extent to which services would be included in any
final agreement. Also limited bureaucratic resources made it difficult for some
provinces to develop negotiating positions, especially when other issues had higher
economic priority. In other cases there were open disagreements among provincial
governments in terms of health and education services, some provinces supported the
48
Christopher J. Kukucha, 2008, p. 103.
49
Id., p. 104.

230
idea of further liberalization, due to a recognized comparative advantage, while others
supported greater protectionism. The movement of service based professionals added
another vital to these discussions. In the decade following GATS, most provinces
developed clearer priorities related to service-based industries. Provincial officials
reviewed existing laws and regulations and are now aware that future GATS
negotiations will have direct implications for areas of sub federal jurisdiction.50

5.4.2.3 Financial Services and Government Procurement

Christopher J. Kukucha in his book entitled “The Provinces and Canadian Foreign Trade
Policy” has explained that the financial services agreement was in many ways related to
the NAFTA provisions. It contained a “so-called „prudential carve-out‟ for domestic
regulation on financial services”, which provided considerable flexibility for signatories,
just as in NAFTA. However, Canadian interests did not play a significant role in this part
of the agreement. Instead, the final legal text emulated the interests of developing
countries, which feared the impact of liberalization on the regulation and management of
domestic financial services, in this sense, the provinces benefitted from a form of
“autonomy by proxy”, which allowed provincial bureaucrats to dedicate their limited time
and resources to other issues. The Provinces were also able to protect specific interests
related to the government procurement. The Canada-US Free Trade Agreement (FTA)
had restricted itself to federal procurement. Participation in the WTO Government
Procurement Agreement (GPA) was limited mainly to developed countries. Unlike other
signatories, however Canada did not grant foreign parties equal status with domestic
suppliers when it came to bids for government procurement contracts. Also, Ottawa was
able to exempt provincial, municipal, and regional governments from the Government
Procurement Agreement (GPA). Thus, Canada is not able to bid on government contracts
in the jurisdictions of other signatories. Canadian provinces, however can gain access to
procurement contracts in US states.51

France Morrissette in his Article “Provincial Involvement in International Treaty

Making: The European Union as a Possible Model” has asserted that the provinces‟
consultative exercises with sectoral interest take no standard form. Modern international
conventions often regulate subjects within provincial legislative competence. In 2004,
50
Christopher J. Kukucha, 2008, pp. 104-107.
51
Id., pp. 107-109.

231
while acknowledging that fact, the Council of the Federation requested for the
development of formal devices for participation of the provinces in the negotiation of
such international treaties. These were not new demands. As far back as 1972, it was
asserted by the Special Joint Committee of the House of Commons and the Senate on
the Canadian Constitution that the federal government should not commit to treaties in
areas of provincial jurisdiction without having consulted each affected province. In
1985, the report of the Royal Commission on the Economic Union and Development
Prospects for Canada made several proposals on this matter. During the annual
conference of provincial first ministers in July 1996, the provinces, then led by Alberta,
requested for a formal federal-provincial agreement which would confer a genuine
provincial role in the development of Canadian trade policies and strategies during
treaty negotiations in this sector. Several possible channels that would help to avoid
conflicts with the provinces on these questions were offered by International laws which
are as follows:52

(i) On matters within provincial legislative competence, Ottawa could enter into a
framework treaty with a foreign state which would authorize the provinces to
conclude future agreements in conformity with that treaty.

(ii) If the particular treaty expressly or implicitly allowed it, Ottawa could, at the
time of ratification, issue a reservation which would limit Canada‟s international
commitment to the obligations falling within federal jurisdiction.

(iii) Ottawa could negotiate the inclusion of a federal state clause in a treaty.
Depending on its wording, such a clause could achieve the same result as a
federal reservation, or it could allow Ottawa (upon ratifying the accord) to
exclude any part of the country from its application. However, a federal state
clause may be difficult to negotiate with other states and they may not accept a
reservation.

France Morrissette further said that most modern treaties, including those that deal only
with topics falling within federal jurisdiction, are likely to have significant impact on
provincial governance. It, therefore, seems unacceptable that Ottawa could unilaterally

52
France Morrissette, “Provincial Involvement in International Treaty Making: The European Union as
a Possible Model”, retrieved from http:// queensu.ca/lawjournal/issues/pastissues/6-Morrissette.pdf,
last visited on 7 September 2014 at 4:15 pm.

232
impose a treaty on the entire population and on all governmental players without first
informing them of the content of the treaty and convincing them of its necessity. Proper
consultation and participation mechanisms in the negotiation and conclusion of
international conventions represent the best way to obtain a wide-ranging consensus on
treaties and to ensure that they will be respected. 53

5.5 Australia

Clement Macintyre & John Williams in his Article “Australia: A Quiet Revolution in
the Balance of Power” had asserted that despite very few constitutional changes over
the past century, significant revisions effectively have been made to the distribution of
powers and responsibilities in the Australian federation. The national sphere of the
government, or the Commonwealth, has gradually acquired more powers at the expense
of the states in order to meet the changing role and responsibilities of the government.
Thus, Australia‟s federal system has developed not so much through deliberate
amendment, but as a result of judicial interpretation of the Constitution and clever
political manipulations.54

Australia is a federation in which the Centre and constituent units have an almost
complete set of institutions of government in a style i.e. broadly typical of a common
law parliamentary democracy. Each jurisdiction on the face of the Australian
Constitution has considerable autonomy from the others in the design and operation of
its own institutions. Like any other federation, there are various ways in which the
federal character of the policy affects the structure and functions of the institutions and
in which the choice of the institutions affects the passage of the federal system. Some
are the results of the original design of the system of the government whereas others are
the results of the developments that have taken place in Australia over the course of the
more than 100 years since the establishment of Australian federation. Australia was
settled by the British from the end of the 18 th century as the six separate colonies
widespread around the coast of the Australian continent and on the island of Tasmania.
Over the following 100 years, the colonies became self governing gradually with their

53
France Morrissette, “Provincial Involvement in International Treaty Making: The European Union as
a Possible Model”, retreived from http:// queensu.ca/lawjournal/issues/pastissues/6-Morrissette.pdf,
last visited on 7 September 2014 at 4:15 pm.
54
Clement Macintyre & John Williams, “Australia: A Quiet Revolution in the Balance of Power” in
Raoul Blindenbacher & Abigail Ostein (eds.), Dialogues on Legislative and Executive Governance in
Federal Countries, Vol. 2, Mc-Gill Queen‟s University Press, Canada, 2003, pp. 3-5, p. 3.

233
own constitutions and their own governing institutions. By the end of 19th century, each
colony had a parliamentary system with a bicameral legislature, from which the
executive government was drawn; a governor who represented the crown while acting
as local head of the State; and a court system having a Supreme Court at the apex within
each colony, from which appeals could go to the Privy Council in London. 55

In spite of few constitutional changes in the past century, significant revisions

absolutely have been made to the distribution of powers and responsibilities in the
Australian federation. The constitutional distribution of powers and responsibilities in
the Australian federation has proved to be extremely flexible. Originally understood as
a decentralized federation with large powers remaining in the hands of the states, in
fact, there has been a constant accumulation of power to the Commonwealth
government since shortly after federation in 1901. Although, there is limitation on the
formal amendment of the constitution, but the changing interpretation by the High
Court and the exercise of financial control by the Commonwealth have resulted in
growing power and responsibility to be exercised by the Commonwealth government.
The Constitution gives few exclusive powers to the Commonwealth Parliament under
Section 51 and 52 which include aspects of defence, external affairs, coinage, and
commonwealth places. The federal government through its external powers may enter
into treaties and conventions and allows the Commonwealth Parliament to introduce the
terms of those international instruments into domestic law. The Commonwealth and the
states under the Constitution held the totality of the legislative authority concurrently
between themselves. However, in practice, once the Commonwealth has determined to
exercise its capacity, it will have coverage of the area to the extent of the scope of the
legislative power.56

5.5.1 Historical background

Australia is simultaneously one of the youngest democracies and one of the oldest
federations. It is a federation consisting of six states- New South Wales, Queensland,
South Australia, Tasmania, Victoria, and Western Australia- as well as a number of

55
Katy Le Roy & Cheryl Saunders, “ Australia: Dualist in Form, Cooperative in Practice” in Raoul
Blindenbacher & Abigail Ostein (eds.), Dialogues on Legislative and Executive Governance in
Federal Countries, Vol. 3, Mc-Gill Queen‟s University Press, Canada, pp. 6-9, pp.6-7.
56
John M. Williams and Clement Macintyre, “Commonwealth of Australia” in Akhtar Majeed (ed.),
Distribution of Powers and Responsibilities in Federal Countries, McGill-Queen‟s University Press,
London, 2005, pp. 8- 33, p. 14.

234
self-governing and non-self governing territories. Each State was a self-governing
colony of the British Empire with its own legislature and government prior to federation
in 1901. In 1901, the six Australian colonies united in “one indissoluble federal
Commonwealth under the Crown of the United Kingdom” which was the result of the
discussion, compromise, and debate over the needs and goals of the community though
especially it excluded any consultation with the native people. Federation, in 1901, did
not completely change the Australian colonies into a sovereign nation but it merely
joined six colonies into one large federated colony. The British government had still
conducted political foreign policy. Australia may be characterized as a dual federation
in the sense that each sphere of government has a complete set of institutions;
legislative, executive and, with some capabilities, courts. Accordingly, the Constitution
provides for the federal division of executive, judicial as well as legislative power. The
Australian Constitution empowers enumerated powers to the Commonwealth while
leaving the residue to the States. The listed Commonwealth powers cover essential
national functions which includes defence and external affairs; major commercial
functions, displaying from inter-state industrial disputes by conciliation and arbitration;
and some social functions which include marriage and matrimonial causes. As most
Commonwealth powers are concurrent, in the sense that if there is inconsistency in a
valid Commonwealth law and a state law, the Commonwealth law prevails.57

Anne Twomey in her article “Commonwealth of Australia” has asserted that the
Constitution contained no express power for giving binding effect to treaties or any
provision. Instead in Section 51(xxix), the Commonwealth Parliament was authorized to
make laws with respect to “external affairs”. The word “external” was used to
encompass relations within the empire as well as relations with foreign countries. After
the First World War, the relationship between the United Kingdom and its dominions
gradually changed. Australia became a member of both the League of Nations and the
International Labor Organization (ILO) having full voting rights. It began, reluctantly,
to develop its foreign policy. The empire, at the Imperial Conferences of 1923 and 1926
recognized the powers of dominions, including the Commonwealth of Australia, to
enter into treaties on their own behalf. The Statue of Westminster, 1931 increased
57
Cheryl Saunders, “Australia (Commonwealth of Australia)” in Anne L. Griffiths & Karl Nerenberg
(eds.), Handbook of Federal Countries, McGill- Queen‟s University Press, London, 2005, pp. 31-44,
p. 33.

235
Commonwealth legislative power by allowing the Commonwealth Parliament to make
laws having extra territorial effect and laws that amended or repealed British laws
which were formerly applied by superior force.58

She further explained that the Statue of Westminster, 1931 did not deal with the
Commonwealth‟s executive power, and no formal change was made to the
Commonwealth Constitution. Therefore, Courts are bound to give an expanded
interpretation of the executive power in Section 61 of the Constitution in order to
entertain a treaty-making power that did not exist at federation. It is historically shown
that most powers until after federation in relations to foreign affairs was not made
exercisable in Australia and, therefore, entrusted to the Commonwealth rather than the
States. The absence of any formal constitutional amendment affecting this change has
meant that the constitution has had to be reinterpreted by the courts to conform to
reality. No doubt, this has led to controversy about the extent of the Commonwealth‟s
power, especially in relation to the enactment of legislation that intrudes on traditional
areas of state jurisdiction. Moreover, there is a general acceptance in Australia that the
commonwealth has a primary role in foreign affairs.59

5.5.2 Role of Colonies in International Agreements

At present, Australia is considered as one of the most centralized federal systems in the
world. The drafting of the Australian Constitution was a project in comparative
constitutional law and politics. The framers, brought up on a diet of responsible
government which was based on the Westminster system, had to find ways to contain
the advantages of union and the need of the colonies for freedom. They implanted a
federal structure to the system of responsible government for which inspiration can
most obviously be found in the United States. Ironically, the framers chose the
American model of federation over the Canadian system, as they were concerned about
the latter‟s recognized centralizing federalism. The framers chose a concurrent system
of powers and responsibilities while following the examples of the United States
Constitution. They provided in their Constitution a list of matters over which the
Commonwealth could make concurrent laws with the states, including taxation, the

58
Anne Twomey, “Commonwealth of Australia” in Hans Michelmann (ed.), Foreign Relations in
Federal Countries, McGill-Queen‟s University Press, London, 2009, pp. 36-65, p. 40.
59
Id., p. 41.

236
regulation of certain types of corporations, immigration and marriage and divorce. As a
matter of law, the framers left the residue to the states for the purpose of granting to the
Commonwealth Parliament a defined list of powers. The Commonwealth has come to
exercise its command over the Australian federation because of constitutional
interpretation and clever political planning. The increasing number of international
treaties and their areas has extended the powers of Commonwealth.60

Anne Twomey has further explained that the external affairs power in Section 51 (xxix)
has proved to one of the most controversial powers in the Commonwealth Constitution.
In the consequences of this, the federal system was established in Australia. Though, the
Constitution does not keep specific subjects of Legislative power for the states but it
lists the legislative powers of the Commonwealth with respect to specific subjects, the
most of which are concurrent rather than exclusive. States‟ constitutions provide
plenary legislative power on states‟ parliaments which is subject to any express or
implied prohibitions in the Commonwealth Constitution. Section 109 provides that the
Commonwealth law prevails if there is an inconsistency and the state law is ineffective
to the extent of the inconsistency. Treaties are not self-executing in Australia. They
must be implemented by legislation before these are binding under Australian law.
Although there may be legitimate expectations recognized by administrative law that
the Commonwealth government, while making administrative decisions will take into
account its treaty obligations. Treaties do not have the force of law in Australia unless
implemented by Commonwealth or State legislation. The High Court developed and
defined the limits of the external power with respect to treaty implementation in a series
of subsequent cases. It is not necessary that the whole of the treaty be implemented; the
legislation that implements a treaty in a partial manner will be supported by Section 51
(xxix). But if the implementation is so selective as to deny the law the character of a
measure that implements the treaty and if, in combination with other provisions, the law
is substantially inconsistent with the treaty, and then it will not be supported by any
legislation. The treaty itself must impose sufficiently exact obligations, rather than mere
desires that could be implemented by a variety of possible conflicting measures. The
method chosen by the Commonwealth Parliament for the implementation of the treaty
must be “reasonable capable of being considered appropriate and adapted to
implementing the treaty” which is sometimes interpreted as requiring reasonable
60
Clement Macintyre & John Williams, 2003, pp. 4-5.

237
relations between the object of the treaty and the means used to implement it. If a
Commonwealth law is unnecessarily wide in its implied implementation of a treaty, it
may be repealed.61

Anne Twomey further described that the States do not have any international
personality, therefore, cannot enter into treaties on their own behalf. The ambit of their
powers to enter into agreement of less than treaty status and to participate in
international affairs remains uncertain. Some observers, as a matter of theory, would
deny that the states have any such power, but as a matter of practice, states do from time
to time enter into memoranda of understanding and other agreements of less than treaty
status with national or sub national governments. The most internationally active states
like Queensland and Western Australia are trying to expand their export markets and
therefore, seeking cooperation with foreign governments as well as business. States
often legislate to give effect to treaties as the Constitution, itself, does not deny
legislative powers of states with respect to external affairs. While entering into a treaty,
an agreement is made between the Commonwealth and the states that it will be
implemented by state legislation because the states are having the most appropriate
institution or mechanisms to do so and if a state law is inconsistent with a valid
Commonwealth law, the Commonwealth law prevails under Section 109 of the
Constitution. Further, the validity of such legislation would be highly questionable, if
state legislation tried to confer treaty-making powers upon the state executive.62

She pointed out that throughout most of the twentieth century; the consultation with the
states was undertaken as a matter of course by the Commonwealth before entering into
those treaties which are likely to affect the states. In October 1977, the Commonwealth
and the states agreed on a set of principles for treaty making which provide for
consultation with states early in treaty negotiations, consultation regarding the
implementation of treaties, a first option to the states to legislate to implement treaties
within the areas of state jurisdiction, the representation of states in delegations to
international conferences, and the inclusion of federal clauses in treaties in appropriate
cases. In July 1991, a Special Premiers‟ Conference agreed to establish a Standing
Committee on Treaties (SCOT) and to revise the Principles and Procedures. The revised
version was adopted in 1992. It provided that Standing Committee on Treaties (SCOT)

61
Anne Twomey, 2009, pp. 42-43.
62
Id., pp. 44-46.

238
would comprise senior officials from the Commonwealth, states, and territories and
would meet at least twice a year to:63

a. Identify treaty and other international negotiations of particular features or

importance to the states and propose an appropriate device for state involvement in
the negotiation process;

b. Oversee and report on the implementation of particular treaties where

implementation of the treaty has strategic implications, including significant cross-
portfolio interests, for states; and

c. Coordinate as requires the process for nominating state representation on

delegations where such representation is appropriate.

Since from its beginning, Australian federalism has continuously tried to draw clear
legal lines of power and responsibilities between the Commonwealth and the States
though there has been a quiet revolution in the balance of powers and responsibilities
between the centre and the states. Even though the lines have slowly shifted, through a
combination of cooperation, litigation and history, the Australian federation has proved
comparatively successful system of governance. Internationalization and globalization
have had great impact on the motions of the Australian federation. Most obviously, the
conception of the treaties associated with internationalization has placed distress on
both the division of federal powers and on executive-legislative relations. In the light of
internationalization, the High Court held that “the federal „external affairs‟ power under
Section 51 (xxix) empowers Parliament to legislate any international legal obligations
undertaken by Australia”. In fact, this means that the Commonwealth can interfere in
areas only of state concern, the most sensitive of which includes the environment and
human rights.64

The Commonwealth secretariat for SCOT is established in the Department of the Prime
Minister and Cabinet which also includes representatives of both the Department of
Foreign Affairs and Trade and the Commonwealth Attorney-General‟s Department. At
first, in practice, SCOT did not prove to be an effective consultation mechanism.
Rather, it was a clearing house for information which also facilitated little discussion of

63
Anne Twomey, 2009, pp. 46-47.
64
Cheryl Saunders, 2005, p. 39.

239
matters such as implementation of treaties. The States remain unhappy about the level
of consultation on treaties. So far the implementation of the treaties are concerned, the
Commonwealth likely to take a careful approach for the implementation of the treaties,
where a treaty affected areas are of state legislature. Moreover, the Commonwealth
would ratify the treaty only, if the states supported ratification or if state laws were
otherwise already consistent with the treaty. The Commonwealth regarded the states as
under an “honorable obligation not to amend the law so as to infringe the convention
save after consultation with the Commonwealth”. Treaties ratified by Australia have
often been implemented by the states which were not only due to uncertainty about the
scope of the external affairs power but also to administrative efficiency and
convenience. Existing state bodies and systems were used to implement treaties rather
than copying them at the Commonwealth level.65

With the development of jurisprudence, relations between the Commonwealth and the
states over international affairs were resolved through a series of agreed principles and
procedures while recognizing the Commonwealth‟s final authority but providing
mechanisms for prior consultations. The establishment of an inter-governmental
Treaties Council subsequently supported these arrangements. Additionally, new
procedures were put in place in the Commonwealth Parliament for enabling more
timely and effective parliamentary involvement in the treaty-making process. The new
procedures have been considered once and now it seems to be working well.66

5.6 Conclusion

Ronald L. Watts in his Article “Comparative Reflections” affirmed that a constitutional

distribution of legislative and executive authority and finances among the general and
constituent unit governments has constituted a fundamental, indeed defining aspect in
the design and operation of these federations. But while a constitutional distribution of
authority, responsibilities and finances among the orders of the government has been a
basic feature common to them, there have been various variations in the constitutional
form and scope and in the operation of the distribution of the powers in different
federations. Different geographical, historical, economic, security, demographic,

65
Anne Twomey, 2009, p. 50.
66
Cheryl Saunders, 2005, p. 39.

240
linguistic, cultural, intellectual and international factors have affected the strength of the
common interest and of diversity particularly to each federation. In terms of the scope
of the constitutional powers, there have been substantial differences in the relative roles
of government in different policy areas. The financial arrangements and the degree of
confidence upon intergovernmental financial transfers have also changed. As a result,
there has been considerable variation in the degrees of centralization and non-
centralization and of intergovernmental cooperation or competition among governments
within different federations.67

The international institutions very often engage in their activities in an area that goes
beyond matters considered exclusively federal in terms of the domestic legal system. It
is also suitable to involve sub-national units in representing their country within the
organs of these inter-governmental organisations. In Austria, Belgium, Canada,
Germany, Switzerland and to a lesser extent, Australia, United States, the sub-national
units are involved not only in preliminary policy-making, but also representing the
federal government within technical conferences and organisations like United Nations
Educational, Scientific and Cultural Organization (UNESCO), Organization for
Economic Cooperation and Development (OECD), International Labour Organization
(ILO), World Health Organization (WHO), Food and Agricultural Organization (FAO)
etc. whose activities cover some of the areas that come under their jurisdiction. The
federal system for allowing the sub-national units to participate in the federation‟s
foreign policy is quite different from one another in nature. In certain cases the
participation of sub-national units can be seen as compensation for the powers they
have lost. In other cases, allowing the sub-national units to participate in the drafting of
the international or European rules to be implemented may be seen as the solution to the
problem of the failure of these units to implement international or European law. The
imagination of politician and lawyers is endless when it comes to preparing methods
which are likely to give the sub-national units mediated access to the international or
European scene.68

67
Ronald L. Watts, “Comparative Reflections” in Raoul Blindenbacher & Abigail Ostein (eds.),
Dialogues on Legislative and Executive Governance in Federal Countries, Vol. 3, Mc-Gill Queen‟s
University Press, London, 2005, pp. 36-38, pp. 36-37.
68
Yves Lejeune, 2000, pp. 103-113.

241
As the debate continues and traditional notions of nation-state sovereignty evolve, the
impact of globalization and supranational regulation of trade on the autonomy of
subsidiary governments located within nation states must be reassessed. This subject
has largely been ignored in the current international sovereignty debate. One notable
exception is the expansion of the “disaggregated state” theory. In contrast to the
“upward” transfer of sovereign authority from nation-states to international institutions,
the “disaggregated state” theory focuses on the “downward” transfer of power from the
nation-state to regional and local governments. As nation-states become more
interconnected and interdependent, centralized international relations dependent upon
central government control decline. This in turn leads to a infusion of central
government responsibility and a fundamental shift in the institutional structure of the
global system, forcing a re-examination of old constitutional and international norms in
light of the new circumstances69. As the major proponent of this theory describes it:

“The institutionalization of interstate relations, the disaggregation of the

state, and economic globalization all suggest foundational shifts in the
structure of the global system. To the extent constitutional doctrines have
been grounded in the old framework, they must be re-examined against
the new. Frameworks conceived in other times may emerge inappropriate
in the changed global context.”70
As a consequence of these fundamental structural changes, this theory concludes that
“states and other sub-federal actors should no longer suffer any constitutional bar from
foreign policy-making activities.”71

69
Edward T. Hayes, “Changing Notions of Sovereignty and Federalism in the International Economic
System: A Reassessment of WTO Regulation of Federal States and the Regional and Local
Governments Within Their Territories”, North-Western Journal of International Law & Business,
Volume 25, 2004 retrieved from http://scholarlycommons. Law. Northwestern .edu /cgi / viewcontent
.cgi?article..., last visited on 10 November 2014 at 11:48 pm. (Also cited in http://www.
leakeandersson.com/images/pubs/22.pdf)
70
Ibid.
71
Ibid.

242