In The Media

We asked 6 experts if Congress could stop Trump from eliminating NAFTA

by Zeeshan Aleem (feat. John Weekes)

October 26, 2017

President Donald Trump looks like he’s setting the stage for pulling out of NAFTA, a move that could trigger economic chaos across North America. Could Congress block him?

That’s the big question that lawmakers, business groups and trade scholars around the country are scrambling to answer. As the possibility of Trump withdrawing from the 23-year-old free trade pact seems to grow by the day, critics are poring over history books and researching arcane legislative procedures to see if they can find a way to stop him.

The reason for their urgency is the dire state of NAFTA renegotiation talks between the US, Canada, and Mexico. Earlier in October, US representatives rolled out some stridently anti-free trade proposals that the Canadian and Mexicans considered absolute nonstarters. The proposals — which included unprecedented ideas like requiring the countries to vote on staying in the agreement every five years, ensuring the pact would be perpetually precarious — seemed designed to get Mexico and Canada to reject the ideas and allow Trump to blame them for the deal’s collapse.

John Weekes, Canada's former chief NAFTA negotiator, argued last week that Trump may be pushing for impossible demands because he’s “looking for an excuse to get out of [NAFTA].”

Weekes and other critics have plenty of ammo for their argument, mostly provided by Trump, who has explicitly warned that he would scrap NAFTA if renegotiation talks collapse. “If we can't make a deal, it'll be terminated and that will be fine," he said in the runup to this last round of negotiations.

But much of Congress doesn’t agree that it will be fine. The congressional Republican leadership is staunchly pro-free trade. Behind closed doors, rank-and-file Republicans are warning the administration that they’re willing to hold a tax reform bill hostage to protect NAFTA.

Even Democrats critical of free trade agreements like Reps. Lloyd Doggett (TX) and Bill Pascrell (NJ) have expressed deep concern about the economic effects of simply torpedoing NAFTA after it’s been in place for decades. And they’re all facing rising pressure from armies of lobbyists sent by automakers and agricultural companies to protect the free trade agreement.

I reached out to six experts to figure out if and how lawmakers can actually block Trump. The answer is that no one knows for sure — but many think Congress could use its powers to prevent a total withdrawal from NAFTA.

Under NAFTA rules, Trump can unilaterally withdraw from the agreement by giving Mexico and Canada six months’ notice. But Congress also has a say, since it ratified and implemented the agreement through legislation. Congress can fight to keep that legislation — the rules governing the way that the US trades with Mexico and Canada under NAFTA — intact. It can also pass new laws designed to boost its own authority over trade agreements. It may even be able to pass a law that preemptively eliminates Trump’s ability to unilaterally give Canada and Mexico notice of withdrawal.

If Congress was able to pass any of these bills, Trump would be in a tough situation. He’d risk a rupture with huge swaths of the GOP if he vetoed the bill. And if they formed a veto-proof majority, he’d be neutered by his own party on one of his key policy priorities.

It’s far from clear whether the administration or Congress really has a decisive edge. But many of the scholars I spoke to think that the answer, on balance, is that Congress could likely prevent Trump from destroying NAFTA.

Their responses, edited for clarity, are below.

Todd Tucker, fellow, the Roosevelt Institute

Congress can’t block Trump from withdrawing, but he will have other problems to deal with if he does so.

The executive branch has exclusive authority over foreign relations. Presidents from William McKinley to Franklin Roosevelt to Jimmy Carter terminated international agreements without explicit congressional authorization — including some that dealt with trade.

The Roosevelt administration, for example, unilaterally withdrew from or terminated the 1927 Convention for the Abolition of Import and Export Prohibitions and Restrictions (in 1933), an 1871 trade pact with Italy (in 1936), and the 1929 Inter American Convention for Trademark and Commercial Protection (in 1944). In each case, the otherwise famously free-trading State Department of Cordell Hull argued that the deals were no longer in the US interest as the administration saw them. Sound familiar?

So Trump can readily notify the other parties, Canada and Mexico, of withdrawal.

Here's the problem: Much of what is in NAFTA is implemented by congressional statute. Trump doesn't get to change that without congressional support. So, in this scenario, we would have a Zombie NAFTA, where America’s formal participation is dead, but our domestic law would still treat Canadian and Mexican products as if it weren't.

That would in turn invite World Trade Organization challenges by other countries, who would try to claim the same treatment for their goods and services that our neighbors get.

Mickey Kantor, US secretary of Commerce and Trade Representative under the Clinton administration

Most people believe there is no answer to this question, but the province of international trade under the Constitution is under the Congress, not under the executive.

The only precedent people cite is how Andrew Johnson in 1866 withdrew from a trade agreement with Canada.

But it appears to me that even if President Trump withdraws that it may not be effective because it’s subject to law — Congress ratified the NAFTA.

Phil Levy, senior economist for trade on President George W. Bush’s Council of Economic Advisers

It took Congress to pass NAFTA and it should take Congress to kill NAFTA. These agreements are not treaties, but rather international deals that only come into effect when Congress passes “implementing legislation.”

As things stand, there is some ambiguity, because the agreement itself allows for countries to withdraw, and the president would be the one to initiate such a withdrawal. But a president should not be able to revoke a law unilaterally. Further, the Constitution grants Congress, not the president, the power “To regulate Commerce with foreign Nations.”

Congress could pass new legislation clarifying this constitutional assignment of responsibilities. One might expect the White House to oppose any diminution of its power, but we’ve already seen Congress overcome such reluctance in the case of sanctions on Russia. To do it here would require some bipartisan understanding of the damage NAFTA withdrawal would do.

Rob Scott, director of trade and manufacturing, Economic Policy Institute

Trump can withdraw from parts of NAFTA without the consent of Congress, but it would have limited effects on trade or investment with Mexico or Canada.

The NAFTA Implementation Act, which cannot be revoked without the consent of Congress, says that if a country ceases to be a NAFTA partner, then tariff provisions of the agreement — rules that say that internationally traded goods are free from border taxes — will cease to be in effect. However, many other aspects of NAFTA would remain in effect, including provisions on government procurement, labor, and environmental conditions, services trade, and arbitration proceedings.

Also, if NAFTA were revoked, the president would be free to raise tariffs, but only to levels agreed to under the World Trade Organization — the so-called most-favored-nation rates. Under those rates, tariffs on imported goods are only 2.7 percent for the United States, 4.6 percent for Mexico, and 2.4 percent for Canada. While noticeable, these tariffs would not cause large initial trade disruptions.

Gary Hufbauer, senior fellow, Peterson Institute for International Economics

If Congress objects to total presidential control of the commercial agenda with Mexico and Canada, what action can it take? Congress could enact a joint resolution calling on President Trump to obtain congressional approval before he invokes Article 2205 of NAFTA, which triggers withdrawal, or the provision in the NAFTA Implementation Act that allows the president to deny NAFTA benefits to Mexico, Canada, or both.

Short of that blockade, the House Ways and Means and Senate Finance Committees could advise the president that he will have a tough time moving other legislation (such as the tax bill) or appointments (such as trade officials) unless he first obtains the majority approval of at least these two committees before taking action that could spell the end of NAFTA.

Douglas Irwin, economic historian, Dartmouth College

Lawyers seem to disagree about whether Trump has the unilateral legal authority to pull us out of NAFTA, or, if he can, whether than even means anything given the NAFTA implementing legislation was passed by Congress and presumably cannot be undone unilaterally by the president.

There is little precedent for such an action, so we really don't know what Congress intended in the withdrawal authority. What is clear is that any presidential determination to leave NAFTA would be immediately challenged in the courts and some members of Congress will fiercely resist it.

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