Renegotiation of the North American Free Trade Agreement (NAFTA): What Actions Do Not Require Congressional Approval? Page: 1 of 2
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CRS Reports & Analysis
Renegotiation of the North American Free Trade
Agreement (NAFTA): What Actions Do Not Require
President Trump has announced his intent to renegotiate the North American Free Trade Agreement (NAFTA) among
the United States, Canada, and Mexico. 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. Some observers have speculated that a future renegotiation of NAFTA might touch upon a number of
issues, such as:
" Tariff rates on merchandise trade among the three NAFTA partners;
. Immigration and border security;
" Cooperation on migration from Central America, drug trafficking, illegal flow of arms and money;
" Elimination of investor-state dispute settlement provisions that allow an injured investor of one NAFTA party to
sue another NAFTA party before an international tribunal;
" Rules of origin that set forth the percentage of a product's content that must originate in the NAFTA region for
the product to qualify for preferential tariff treatment; and
" Modifications to NAFTA's general dispute settlement system.
As discussed in more detail in a CRS study, the negotiation of international agreements is generally considered to be the
exclusive prerogative of the Executive. Consequently, the Executive does not appear to need approval from Congress to
discuss changes to NAFTA with representatives of Canada and Mexico. Attention will likely focus on whether the
agreement resulting from these negotiations must be approved by Congress before it may enter into force and take effect
in domestic law.
Federal statutes that provided the foundation for the negotiation, legislative consideration, and implementation of
NAFTA do not appear to address Congress's role in amending the agreement. The applicable statutes include the Trade
Act of 1974, which sets up the procedure for Congress's consideration of implementing legislation; the Omnibus Trade
and Competitiveness Act of 1988, which established the eligibility of NAFTA implementing legislation for expedited
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Library of Congress. Congressional Research Service. Renegotiation of the North American Free Trade Agreement (NAFTA): What Actions Do Not Require Congressional Approval?, report, January 26, 2017; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc1042298/m1/1/: accessed March 21, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.