Can President Trump Terminate NAFTA or KORUS Without Congressional Approval?
The Fletcher School of Law and Diplomacy, Tufts University
The Issue:President Trump campaigned on a platform that railed against international trade deals saying the deals were responsible for siphoning jobs away from the United States and for ballooning trade deficits. Since coming into office, he has threatened to withdraw the United States from the North American Free Trade Agreement (NAFTA), as well as from the Korea-U.S. Free Trade Agreement (KORUS). He has also been highly critical of U.S. membership in the World Trade Organization (WTO). Congress is likely to be more conservative, and to wish to retain these agreements. Does a U.S. President have the Constitutional or statutory power to withdraw the United States from these agreements?
The Constitution granted Congress authority to regulate commerce with other nations.
- Current negotiations among the U.S., Canada and Mexico to update NAFTA have not gone especially well, and the Trump Administration has made a number of demands that Canada and Mexico find very difficult to accept. President Trump has threatened to withdraw from NAFTA if these negotiations do not yield the results he demands. NAFTA is a reciprocal agreement by which Mexico and Canada reduce barriers to U.S. exports in exchange for the U.S. reducing barriers to their exports. This means that U.S. industries that export goods and services to Mexico or Canada, including especially agriculture — and the workers in those industries — would be hurt by any termination of NAFTA. Other industries, such as the automotive industry, which rely on extensive cross-border supply chains, would also be hurt. Businesses that depend on access to foreign imports and consumers, who benefit from greater variety of goods and lower prices, would also be affected. On the other hand, businesses that compete with foreign imports would stand to benefit if imports faced higher tariffs. And, the administration argues, a more restricted access to foreign imports would generate jobs for people who would be employed in manufacturing these goods domestically.
- Congressional approval has been a central requirement for the United States to enter into all of the international trade deals currently in force. The United States is party to 14 international free trade agreements with 20 countries. Historically, the President negotiates free trade agreements with foreign countries and submits to Congress legislation that would implement the agreements. U.S. free trade agreements must be approved by a majority of each house of Congress.
- This is because the Constitution granted Congress authority to regulate commerce with other nations. Under the Commerce Clause of the U.S. Constitution, the President has no power to regulate international trade, except as may be statutorily delegated to him by Congress. The Supreme Court has said, in the 1994 case of Barclays v. California that “the Constitution expressly grants Congress, not the president, the power to “regulate commerce with foreign nations.”
- Very soon after taking office, President Trump withdrew from the Trans-Pacific Partnership trade agreement (TPP), which was a 12-nation trade agreement negotiated by the Obama administration. However, this agreement had not yet been ratified by the U.S. Congress so it was not in effect. Therefore, President Trump was able to exit the TPP agreement by removing the Presidential backing to the deal and declining to present it to Congress at all.
- All U.S. free trade agreements that have entered into force, including NAFTA, contain provisions allowing for a party's withdrawal from, or termination of the agreement upon advance notice to the other parties (see this Congressional Research Service report). Because of this, under international law, if the President of the United States gives notice that he intends to exit NAFTA, this move would be likely to carry consequences in international law, starting the 6 month period of notice before the U.S. may withdraw from the agreement. But, the agreements do not specify who in the U.S. may make the decision to withdraw — that issue is left to domestic constitutional and statutory law. Therefore, members of Congress or affected citizens or companies could sue to seek an injunction ordering the President not to send the actual notice of withdrawal, arguing that the President is powerless under domestic law to make this decision by himself.
- While Congress has delegated extensive trade authority to the President, in particular under the Trade Act of 1974 and under the implementing statutes for each of the U.S. international trade agreements, it has never explicitly delegated to the President the power to withdraw the U.S. from any of these agreements. There are some interpretative arguments to the effect that Congress has implicitly authorized the President to terminate trade agreements, for example, by approving the NAFTA agreement which includes a termination clause, but they seem unpersuasive because (i) that termination clause explicitly gives the U.S., not the President, the right to terminate, and (ii) Congress explicitly delegated other powers to the President and meticulously avoided delegating termination power to him.
- Many constitutional scholars believe that the President generally has power to terminate U.S. international agreements, because of his broad foreign affairs powers, and, in part, because Congress seems to have acquiesced in unilateral presidential termination of treaties during the 20th century (see for instance this paper by Curtis Bradley). However, these analyses often fail to take into account the special circumstances of the Commerce Clause, which is clearly understood to deny the President power in this area. In the commerce field, the practice does not support unilateral Presidential termination. While the President is the spokesperson and negotiator for the United States in international relations, including in trade, he has no undelegated power to regulate trade.
What this Means:
There is no doubt that Congress has control over the making of trade agreements. The question of presidential authority unilaterally to terminate these trade agreements should be seen within the broader context of the Constitution, and also within the context of globalization. As globalization has proceeded, more and more aspects of U.S. economic policy are addressed in and through trade agreements. It would be inconsistent with the Constitution’s clear assignment of power to regulate commerce to Congress to accord the President broad power to regulate, or re-regulate, commerce through a unilateral termination power.