On April 26, news outlets reported that the Trump administration was drafting an executive order addressing the potential withdrawal by the United States from the North American Free Trade Agreement (NAFTA) among the United States, Canada, and Mexico. However, later that day, President Trump announced that he had decided not to terminate NAFTA “at this time” but would instead seek a renegotiation of the agreement.
NAFTA entered into force on January 1, 1994 and governs the imposition of tariffs on imported products, as well as nontariff trade barriers (e.g., customs procedures or government procurement practices). The President’s announcement raises questions about the extent to which the executive branch may unilaterally renegotiate the agreement—and implement amendments to the agreement in domestic law—without further action from Congress. This Sidebar post briefly addresses these questions. It does not discuss presidential authority to withdraw from NAFTA or policy implications of U.S. renegotiation of NAFTA (e.g., economic or labor consequences that might result from U.S. action).
The nature and scope of modifications to NAFTA by the Trump Administration that are under consideration are currently unclear. ….