CATCH-22: Trump May Have To Comply With NAFTA Even If He Withdraws From It
President Donald Trump will not be able to remove the United States from the North American Free Trade Agreement (NAFTA) without congressional approval, according to some legal commentators.
The free trade agreement that eliminates most tariffs for trade between the United States, Canada and Mexico emerged into operation in 1994. President George H. W. Bush signed the agreement in 1992. Congress passed NAFTA — and President Bill Clinton signed it into law — two years later.
Thus, NAFTA is composed of two different instruments: the international agreement Bush signed and the domestic law Congress passed to implement the agreement.
The law passed by Congress — the North American Free Trade Agreement Implementation Act — is critical because it directs the president to implement the terms of the NAFTA agreement.
“When it consented to NAFTA, Congress passed a statute called the NAFTA Implementation Act, which delegates to the president the authority and responsibility to implement NAFTA,” Vanderbilt University law professor Timothy Meyer told The Daily Caller.
Only Congress can repeal the statute implementing NAFTA.
Paradoxically, then, Trump would still be bound to continue implementing the NAFTA law Congress passed even if he decides to formally withdraw the United States from NAFTA as an international agreement.
“The president may, in my view, withdraw from the international agreement. Only Congress can repeal the statute, and it is the statute that controls the president’s responsibilities as a matter of U.S. law,” Meyer said.
However, “the president remains bound to comply with the NAFTA Implementation Act unless and until Congress repeals the statute.”
“Unless Congress says otherwise, the administration could end up having to comply with many of the terms of NAFTA even though the United States is not formally a party to the agreement under international law.”
Meyer also said he believes business groups in the United States will exert significant pressure to convince Trump to forge a deal preventing NAFTA’s collapse.
If Trump does choose to withdraw from the agreement, lawsuits will surely follow, the professor said.
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“That litigation will claim both that the president cannot withdraw the United States unilaterally, and that even if he can, he remains bound by the NAFTA Implementation Act,” Meyer told TheDC.
Meyer says he is “cautiously optimistic” that the United States, Mexico and Canada will reach an agreement that will prevent any challenge to Congress’s lawmaking authority. However, he expects NAFTA negotiations to drag into 2018.
Also, Trump’s negotiation team has made a series of proposals in the latest round of NAFTA negotiations with which Canada and Mexico are unlikely to agree.
Among the Trump proposals are a provision to require re-approval of NATA every five years, a proposal to abolish special procedures for the review of anti-dumping remedies and a requirement that automobiles made by U.S.-based companies have a certain percentage of U.S.-made parts.
Any successful withdrawal from NAFTA would cause tariffs to reappear on goods traded among Canada, Mexico and the United States.
The United States would get the raw end of that result. The United States currently taxes foreign goods at rate of 3.5 percent on average. Mexico taxes foreign goods at an average rate of 7.1 percent.
“So U.S. exporters would go from facing zero tariffs currently for their sales to the Mexican market under NAFTA to 7.1 percent on average without NAFTA,” Chad Bown, a senior fellow at the Peterson Institute for International Economics, told the Chicago Tribune.
Representatives from the United States, Mexico and Canada are currently engaged in the fourth of several scheduled rounds of NAFTA negotiations. The fourth round will end on Oct. 17.