Any Trump NAFTA withdrawal faces stiff
court challenge: legal experts
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[November 22, 2017]
By David Lawder
MEXICO CITY (Reuters) - With NAFTA talks
grinding toward stalemate, U.S. President Donald Trump may be tempted to
carry out his threat to withdraw from the trade pact, but legal experts
say such a decision could be defeated, or delayed significantly by court
challenges.
The constitutional and statutory authority for who can terminate the
1994 North American Free Trade Agreement - Trump or the U.S. Congress -
is deeply disputed, and it may take the U.S. Supreme Court or a truce
between the White House and Capitol Hill to sort it out.
Private sector executives said that major U.S. business groups are
preparing legal challenges to any withdrawal by the United States,
although the plaintiffs had not yet been determined.
Litigation would lay bare the fault lines between Trump's populist
vision and the pro-trade, business friendly lawmakers of his Republican
Party, many of whom are increasingly nervous that NAFTA will collapse
and cause economic damage..
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"I think this is headed for a huge legal morass if the president were to
unilaterally send a notice of withdrawal," said Jennifer Hillman, a
Georgetown University law professor and former World Trade Organization
(WTO) appellate judge. "There will be immediate challenges across the
board."
NAFTA's original text allows a country to withdraw from the agreement
six months after it provides written notice to the other parties, but
neither the agreement nor U.S. implementing legislation specifies how
that should be decided.
Once the six-month period ends, the president can declare the
restoration of U.S. tariffs on Canada and Mexico to WTO levels, although
some legal experts say Congress may ultimately have authority over this.
The three countries were wrapping up a fifth round of talks to update
NAFTA on Tuesday with major differences yet to be resolved.
'ZOMBIE' NAFTA
The NAFTA implementing law would be untouched by a Trump withdrawal,
creating what some call a "zombie" trade pact without tariff-free
access, but other provisions would remain.
Some of those rules are opposed by the Trump administration, including
the "Chapter 19" arbitration system that often thwarts U.S. anti-dumping
cases against Canada and Mexico, as well as labor, environmental and
regional content requirements that U.S. officials see as weak.
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President Donald Trump boards Air Force One as he departs for Palm
Beach, Florida, from Joint Base Andrews, Maryland, U.S., November
21, 2017. REUTERS/Eric Thayer
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Trump would need Congress' approval to repeal that law. Winning that
vote could be extremely difficult, as most congressional Republicans
follow their business and farm constituents in being advocates of free
trade in general and NAFTA in particular.
"The president would want to get Congress on board so that the
implementing legislation is coherent," said Dean Pinkert, a trade
lawyer and former U.S. International Trade Commission member.
CONSTITUTIONAL AUTHORITY
Almost any court challenge would argue that Trump needs
congressional approval to quit NAFTA because Congress has explicit
authority in the U.S. Constitution over tariffs and trade. But the
president historically has held power over foreign policy matters
such as international treaties.
The Supreme Court is often reluctant to rule on questions of
authority between the executive and legislative branches of
government and prefers legislative solutions instead.
In a 1979 case, the court sided with President Jimmy Carter after
Senator Barry Goldwater challenged his authority to nullify a
defense treaty with Taiwan. But that pact did not have a trade
component and was clearly a foreign policy issue.
If the Supreme Court did rule on a NAFTA withdrawal challenge, much
would depend on how the case is argued, said Tim Meyer, an
international law professor at Vanderbilt University in Nashville,
Tennessee.
"If the case is successfully framed as to who has authority over
foreign affairs, I think the president wins," Meyer said.
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Georgetown University's Hillman said her reading of the
constitutional question and implementing legislation stacks up
against Trump - that Congress only explicitly intended for the
president to implement NAFTA, not the reverse.
"NAFTA unequivocally falls under the commerce clause of the
Constitution," Hillman said.
(Reporting by David Lawder; Editing by Christian Plumb and Grant
McCool)
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