By William Mauldin
Congressional trade lawyers and attorneys from private firms in
Washington have begun meeting informally to come up with ways to
challenge any decision by President Donald Trump to pull out of the
North American Free Trade Agreement.
The private attorneys and congressional aides say the
contingency planning is in the early stages, and most don't want to
discuss the matter publicly while the talks are continuing. But
with Nafta negotiations having hit their most difficult stage so
far in the round that ended this week, and Mr. Trump repeatedly
warning that he will pull out of the pact if trading partners can't
agree to U.S. demands for "America First" provisions, the talks
over how to respond to a withdrawal have taken on a new urgency,
according to those involved.
The preparations to challenge the president, should he decide
the U.S. should withdraw from Nafta, point to an unanswered
question looming over the recent rounds of trade discussions: How
much authority does the president actually have to scuttle an
existing trade agreement? "This is sort of uncharted territory
where no one really knows," said Warren Maruyama, a former trade
official in the Reagan and two Bush administrations.
The president would almost certainly face legal challenges if he
took steps to negate the 23-year-old pact with Canada and Mexico,
lawyers say, particularly from industries, such as the automotive
business, which have become dependent on free trade across the
continent.
"You will see the auto industry in court the day after that
notice is sent, seeking an injunction," said Tim Meyer, professor
of law at Vanderbilt University. "You will definitely see industry
groups in court with the full support of the U.S. Chamber of
Commerce the day after that notice is sent."
Political resistance to a withdrawal has already developed on
Capitol Hill and within business groups. In Congress, a swath of
centrist, business-backed members in both parties would likely
oppose pullout. The Chamber has called the administration's
proposals for Nafta "highly dangerous" and could be expected to
challenge any unilateral withdrawal.
The U.S. trade representative, Robert Lighthizer, declined to
comment through a spokesman. His predecessor, Michael Froman, now a
fellow at the Council on Foreign Relations, said there is a
vigorous debate about what would happen if Congress opposed a
withdrawal but that he believed "a lot could be done by executive
action."
Mr. Maruyama agreed that the president probably has the power to
cancel or gut Nafta, but he expects challenges -- with a chance of
success -- if Mr. Trump attempts to kill the deal unilaterally.
"There are people who are desperately scouring [key provisions of
trade law] on Capitol Hill and law firms and at the U.S. Chamber of
Commerce right now to try to create some kind of argument that
Trump can't do this," said Mr. Maruyama, now partner at Hogan
Lovells LLP in Washington.
While the Constitution gives Congress broad powers to regulate
international commerce, when it comes to trade agreements Capitol
Hill has delegated to the executive big pieces of that authority --
in a 1974 law, in repeated laws designed to expedite the passage of
trade pacts and in the 1993 law that implemented Nafta.
Legal experts see two main avenues for challenging a withdrawal:
Opponents could challenge the president's ability to exit an
international commercial deal as unconstitutional, or challenge his
ability to reverse a law passed by Congress -- in this case, parts
of the Nafta implementing legislation -- without congressional
consent.
In the first case, the challenge would begin if Mr. Trump
formally informs Mexico and Canada of plans to withdraw from Nafta,
launching the process by which countries are allowed to exit from
the deal under the 1992 treaty. Countries can inform trading
partners of actual withdrawal six months or more after sending
notice.
Lawyers involved in the discussions say it would be difficult to
stop Mr. Trump from sending the initial notice of withdrawal, since
the executive branch enjoys a special ability to communicate
official policy decisions to foreign governments.
But after the notice, lawmakers or companies that stand to be
injured by the withdrawal could seek an injunction in federal court
to prevent it.
"Congress or General Motors might send an injunction to prevent
that second notice to actually withdraw," said Joel Trachtman,
professor of international law at Tufts University, citing a
hypothetical example. "I think any member or Congress can sue and
frankly any business that could be harmed could sue."
Or they could seek to reverse the withdrawal after it occurs,
arguing that Congress needs to be consulted since it regulates
international commerce and because the 1974 law is vague on who has
the power to exit trade agreements.
The Congressional Research Service said in a 2016 report that a
final notice of withdrawal from the president "appears sufficient"
to release the U.S. from its international obligations under Nafta,
but that Congress might wield a variety of powers to dissuade a
president from canceling the deal, including through its control
over the budget. Congress in theory could also pass a law
reinstating Nafta or a similar agreement, but lawmakers are divided
on the issue and unlikely to advance legislation protecting a trade
agreement, especially if they don't have a veto-proof majority.
Many trade experts, including Lori Wallach, trade chief at
consumer watchdog group Public Citizen, say a president would
prevail if he opted to withdraw from a trade agreement, with courts
declining to get in the way. "Their legal case is beyond weak," Ms.
Wallach said of the lawyers who have questioned Mr. Trump's
authority.
The second avenue for challenge questions whether Congress
improperly delegated authority to the president in previous trade
laws. In the 1974 act, supported by subsequent updates granting
"trade promotion authority, " Congress specifically gave the
president the ability to reinstate the tariffs that were eliminated
when a trade agreement entered into force.
The 1993 Nafta implementing law also has a clause aimed at
invalidating the major legal codifications of the pact if the U.S.
withdraws. If the Trump administration sought to end Nafta, it
could point to this language, which appears to cancel major
provisions of Nafta.
But courts have ruled that there are limits to laws that shift
constitutional powers among the branches. For example, the Supreme
Court struck down the line-item veto during the Clinton
administration because it allows a president to cancel a law passed
by Congress.
Ironically, one of Mr. Trump's own nominees for the Supreme
Court -- Justice Neil Gorsuch -- has questioned the ability of
Congress to delegate key powers to the executive branch except
under certain strict conditions, said Mr. Meyer, the Vanderbilt
professor, who previously clerked for Justice Gorsuch.
Write to William Mauldin at william.mauldin@wsj.com
(END) Dow Jones Newswires
October 20, 2017 05:44 ET (09:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.