SPONSORED:

Trump runs into GOP opposition with NAFTA threat

Congressional Republicans are warning President TrumpDonald John TrumpTrump rages against '60 Minutes' for interview with Krebs Cornyn spox: Neera Tanden has 'no chance' of being confirmed as Biden's OMB pick Pa. lawmaker was informed of positive coronavirus test while meeting with Trump: report MORE not to withdraw from the North American Free Trade Agreement (NAFTA) with Mexico and Canada as he attempts to push through an updated version of the deal.

“I hope he doesn’t do that. I think that’d be a big mistake,” said Sen. John ThuneJohn Randolph ThuneCongress set for chaotic year-end sprint Republicans ready to become deficit hawks again under a President Biden Democrats brush off calls for Biden to play hardball on Cabinet picks MORE (R-S.D.), who will become the No. 2 GOP senator in the next Congress. 

ADVERTISEMENT

“The president does not have the legal authority to unilaterally withdraw the United States from NAFTA,” Sen. Pat ToomeyPatrick (Pat) Joseph ToomeyAppeals court rules NSA's bulk phone data collection illegal Dunford withdraws from consideration to chair coronavirus oversight panel GOP senators push for quick, partial reopening of economy MORE (R-Pa.) said, adding that “there would be significant negative repercussions if he attempts to.”

Trump threatened to withdraw from the decades-old free trade deal in a tweet on Saturday that served as a form of pressure on the Democratic House to agree to the updated agreement, known as the U.S.-Mexico-Canada Agreement (USMCA).

“I’ll be terminating it within a relatively short period of time,” Trump said Saturday of NAFTA.

If Trump did so, old trade rules and tariffs from before NAFTA was implemented would go back into place, likely raising costs for businesses and consumers in the United States.

This explains the resistance to the idea from Republicans in Congress, and why many believe the president would not follow through on the threat.

The GOP complaints also undermine Trump’s strategy for using the threat as leverage against Democrats, who are demanding changes to the deal to win their approval. Democrats will control the House in January and there is virtually no chance that lawmakers will approve implementing legislation for the NAFTA replacement in the lame-duck Congress over the next two weeks.

Trump has previously threatened to rip up NAFTA, which raised warnings from Republicans, some of whom said it would go beyond Trump’s presidential powers.

In May, Toomey wrote a Wall Street Journal op-ed telling Trump not to “blackmail” Congress with a NAFTA withdrawal, saying it would be “economically harmful and unconstitutional.” 

Toomey wrote that Trump does not have the power to terminate a trade deal.

“Nowhere in the 1993 law, or in any other relevant statute, has Congress delegated to the president authority to terminate a free-trade agreement,” he wrote. “A president can no more repeal Nafta than he can repeal ObamaCare or create a new Nafta without Congress’s approval.”

Other Republicans are less certain than Toomey, but fear Trump’s cancellation of the trade deal would create a legal gray area that would sink the economy.

“Ultimately, the Constitution gives Congress authority over trade,” said outgoing Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchMellman: What happened after Ginsburg? Bottom line Bottom line MORE (R-Utah), who is retiring at the end of this Congress.

“While we have delegated some authority to the executive branch through legislation, this authority is limited. Threats to take unilateral action could destabilize the U.S. economy and may undermine the critical partnership between Congress and the executive with regard to trade policy.”

The economic worries are another reason some observers are skeptical that Trump would follow through on this threat, despite the fact that he has backed up many bellicose words on trade with actions.

Stock markets have fallen this week on fears about the wider trade war between the U.S. and China — a potential concern for Trump as he readies his reelection effort for 2020. A bruised economy would hurt Trump, who has touted economic growth under his stewardship as a reason he should be reelected.

Asked if Trump had the authority to unilaterally kill the agreement, Sen. John KennedyJohn Neely KennedyMORE (R-La.) said he didn’t want to find out the hard way. 

“You know, it’s like somebody’s got a gun and you can gamble whether it’s loaded or not, but if you’re wrong, the consequences are severe,” he said. “It scares me to death.”

“You wanna tank the stock market and knock a point or two off of [gross domestic product], you just get rid of NAFTA,” he added.

The next presidential race is likely to roil the politics surrounding the trade agreement.

Winning approval of the new NAFTA would be a victory for Trump, something Democrats may not want to give him ahead of 2020.

The new treaty conforms to the broad outlines of NAFTA, but includes modernizing elements dealing with digital commerce, changes to wage provisions related to auto manufacturing and a loosening of Canada’s tight grip on its dairy market.

The changes demanded by Democrats include enforcement mechanisms to deal with environmental restrictions and labor issues.

“It’s disappointing but not surprising that President Trump would try to force Congress to reinstate the status quo of NAFTA, when he should be working constructively with Congress to improve his proposed agreement to actually protect and strengthen American workers,” said Henry Connelly, a spokesman for Rep. Nancy PelosiNancy PelosiObama chief economist says Democrats should accept smaller coronavirus relief package if necessary The five biggest challenges facing President-elect Biden Democrats were united on top issues this Congress — but will it hold? MORE (D-Calif.), the likely next Speaker of the House. 

Pelosi met with U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerWhiskey, workers and friends caught in the trade dispute crossfire GOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 MORE on Thursday. She praised the USMCA as having some positives, but said the good things Trump negotiated wouldn’t matter without further changes.

“This bill has good features to it, but they don’t matter at all if you don’t have enforcement,” she said ahead of the meeting,