Baker Institute expert: Sending a renegotiated NAFTA to a skeptical Congress is risky

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Negotiations between Canada and the United States for a new tripartite agreement with Mexico are now underway. The very real possibility that the U.S. will not reach an agreement with Canada by Sept. 30 and that President Donald Trump’s administration will pursue a bilateral free trade agreement with Mexico has caused great consternation in Congress, according to a new issue brief from Rice University’s Baker Institute for Public Policy.

“The Trump Approach to Trade Negotiations: Risks in Presenting a Renegotiated NAFTA to a Skeptical Congress” was authored by David Gantz, a nonresident fellow for the Baker Institute’s Mexico Center with a focus on international trade and economics. Gantz is the Samuel M. Fegtly Professor of Law at the University of Arizona’s James E. Rogers College of Law and director emeritus of the college’s international trade and business law program.

“Disagreements over a trade dispute settlement mechanism, import restrictions on dairy products (milk proteins), biologic drug protection, continued ‘national security’ tariffs and cultural industries, all of which are highly sensitive within Canada, threaten to prevent Canadian accession, particularly under conditions where the president is taking a hard line against any U.S. concessions,” Gantz writes.

If Canada does not agree to become a part of the agreement, the situation raises a series of complex political and legal challenges for both the Trump administration and Congress, the results of which are currently unpredictable, Gantz said. He posits three challenges if Canada does not join the agreement: whether the president has been authorized by Congress to conclude a bilateral agreement with Mexico; whether the president possesses the legal authority to terminate NAFTA without congressional consent; and, if a bilateral trade agreement is signed by the presidents of the U.S. and Mexico, whether Congress will approve the deal.

“In its primacy over trade matters under the Constitution, Congress has broad authority over new and existing trade agreements, and could – if it had the political will do so and the necessary votes to block the signature of a ‘modernized’ NAFTA that excludes Canada – seek to assure that the duty-free trade within North America provided under the NAFTA Implementation Act continues despite an attempted unilateral termination by the executive branch, or simply decline to approve a revised agreement when it is submitted to Congress under 2015 Trade Promotion Authority legislation procedures,” Gantz concludes.