Pulling out of NAFTA would bring big risks

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October 30, 2017

It’s uncertain whether the Trump administration can resolve its negotiating differences with Mexico and Canada in regard to NAFTA. What is becoming clear, though, is that a failure of negotiations and a U.S. attempt to withdraw from the agreement would raise big complications and concerns, including for Midlands agriculture.

First, there’s considerable debate over how much legal authority a president even has to withdraw from a trade agreement.

If President Donald Trump announced a U.S. withdrawal, for example, the separate act that actually implemented NAFTA would remain in place. The result: Some parts of NAFTA would end, but others (including certain tariffs and certain regulations and procedures) would remain. Such a muddle would create disruptions and confusion for the private sector.

 

Adding to the uncertainty is that lawsuits would likely be filed disputing U.S. actions. Trade-related committees in Congress would joust with the administration over who has proper authority.

Legal experts agree that if the Trump administration moves to unilaterally withdraw from NAFTA, the executive branch does have the authority to end the no-tariff policy that currently allows a wide range of Canadian and Mexican exports to be sold here, duty-free.

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