Bretton Woods Agreements are Not Treaties

Writing for Devex, Jesse Chase-Lubitz raises a number of questions about how the U.S. can withdraw from membership in The World Bank and how its contributions will be repaid.  In her “Could the US Pull Out of the World Bank? Unlikely – But Not Impossible“, she explores the key questions of the actual process.  

Her article correctly points out that the Articles of Agreement creating the bank clearly state the process for withdrawal of a member.  However, confusion sets in on the question of whether the original agreement was a treaty requiring ratification by the U.S. Senate and, therefore, making withdrawal subject to Congressional approval.

Chase-Lubitz quotes Jan Klabbers, an expert on treaties and international organizations as first saying:

“Withdrawal is, as a process on the international level, easy… According to the Bank’s constitution, one simply notifies the Bank, and the withdrawal takes immediate effect.”

With this, I fully agree.  It is his next comment where the problem arises:

“Logic would suggest that since treaties like the Articles of Agreement require approval from the Senate, the same would apply to withdrawing from such treaties,” said Klabbers.

The issue is easily resolved.  The Bretton Woods Agreements under which the World Bank – rather its IBRD lending arm – and the IMF were established were not treaties and were not ratified by the U.S. Senate.  It is plain and simple.

The Bretton Woods Agreements Act through which Congress agreed to the U.S. joining the World Bank and IMF was a simple statute.  It was not a treaty and required only a majority vote in each chamber.

Moreover, it did not compel the President to join either of the Bretton Woods institutions.  Rather, the legislation clearly stated that “the President is hereby authorized to accept membership”. 

The President could have decided not to do so.

It stands to reason that if the President had the option to join or not join, he has the option to withdraw or not withdraw.

Another contributor to the article states it clearly (despite mischaracterizing the agreements as treaties):

Daniel Bradlow, a professor and senior research fellow at the University of Pretoria, said that the government could make the case that because the Articles of Agreement lays out a plan for withdrawal — and Congress agreed to that treaty when it was ratified — the government does not need to regain Congress’s approval in order to withdraw.

The question of Congressional funding is similarly simple.  

The issue is raised that since Congress appropriated funds for the World Bank, Congress has a say in a potential withdrawal.  

However, this is not an issue of impoundment.  Congress appropriated the funds and they were duly paid as contributions.  Nowhere in any appropriation bill is there language binding the President to continued membership in the organizations or prohibiting a refund of appropriated funds in the event of cessation of membership.

The entire question of withdrawal of membership in the World Bank and the IMF clearly comes down to a decision by the President under Article II of the U.S. Constitution.

Some things are just that simple.