The Challenge of Renegotiating NAFTA.

• Author: Abboushi, Suhail

INTRODUCTION

Throughout his presidential campaign and during his term in the White House, the US President has objected to the North American Free Trade Agreement (Nafta) and referred to it as "the worst trade deal ever signed by the US," and described it as "very, very bad for our country, " and that it must be amended or deleted (Palmeri, 2017). Upon taking office, the President signed an executive order to begin renegotiating Nafta and, on August 15, 2017, representatives of US, Mexico, and Canada held their first meeting to begin renegotiating the trade agreement that was ratified in Congress back in January 1994 and had superseded the earlier Canada-US Free Trade Agreement (Parilla, 2017). The call for renegotiation, and the actual start of negotiation, have been accompanied by repeated threats that unless negotiation produces a more favorable and expeditious agreement, the US will leave Nafta and, according to White House officials, a draft executive order was actually prepared such that, if signed by the President, the US would withdraw from Nafta in six months (Palmeri, 2017). Furthermore, the call for renegotiation and the threat of termination have been further complicated by repeated declarations on the part of the President that an agreement is unlikely and the effort to renegotiate is hopeless (Murphy, 2018), and declaration by US Trade Representatives that if a tripartite agreement between the three countries were to fail, the US could break up the three-member agreement and pursue bilateral negotiation with Mexico and Canada separately (Stirling, 2018). In the midst of this cloudy negotiation atmosphere, important and worthy relevant questions arise: The rights and conditions of a Nafta member to terminate its membership and, for the US, the constitutional question of whether the President has the unilateral power to withdraw the country from an international treaty without action and support by Congress.

With regard to the first question, and according to Nafta's Chapter Twenty, Article 2205, A Party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties, and interestingly the Article goes on to state that if a Party withdraws, the Agreement shall remain in force for the remaining Parties (Chapter Twenty-Two, 2018). Clearly, Nafta permits a party to withdraw six months after it provides notice, and such notice has not yet been issued. The US government has not issued an executive order to commence the six-month withdrawal notice. Arguably, even if such an order is issued, the US is not locked to exit and if conditions may arise, as in opposition by business or Congress, the US may choose to remain in Nafta prior to or even at the expiration of the six month notice. Unlike the British Brexit case where Britain filed Article 50 with the European Union in March 2017 affirming UK's exit from the EU by March 2019, the US will not be bound to exit if it were to issue the notice. With that in mind, it has even been suggested that issuing such an ultimatum may be deployed as a bargaining tactic to force greater concessions from Mexico and Canada (Lawder, 2018). The US may perceive greater bargaining power than its partners and in such an asymmetrical negotiation structure, ultimatum tactics can be used to emphasize the power asymmetry and influence the process and outcome, a strategy not uncommon in international negotiation (Pfetsch & Landau, 2000).

With regard to the second question, and while the Constitution gives the President power to negotiate with foreign countries, it is silent with regard to the President's power to terminate an international agreement. At the time the constitution was signed, clauses for treaty termination were not common in international laws, and the authority to terminate was not addressed in the text of the US constitution. As a result, the constitution establishes that the President may make treaties "with the Advice and Consent of the Senate," but it leaves unanswered the question of who can terminate a treaty. The question has been worked out over time through what is known as political-branch practice. In the nineteenth century, the "understanding" was that congressional involvement was needed for treaty termination, however, this practice-based understanding gradually gave way to a new understanding in the twentieth century that de-emphasized the role of Congress. Today, legal scholars suggest that it is generally understood and agreed that the President has the power to unilaterally terminate an international treaty without awaiting consent of Congress (Bradley, 2014).

TERMINATION OR RENEGOTIATION

NAFTA provides that the parties may negotiate amendments or additions to the agreement provided that when the changes are approved by legal procedures in each country, the modifications become an integral part of the agreement. In the United States, authority to negotiate is vested with the president, but implementation is not. In principle, implementation of a negotiated treaty may take one of two forms: presidential proclamation within the existing statutory authority where Congress may not be needed, or, if the changes impact US laws (and Nafta was approved by Congress and acquired status of statute), the President must seek implementation legislation from Congress, under the...