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This bill would withdraw Congress’ approval for the North American Free Trade Agreement (NAFTA) and set a timeline for renegotiating certain aspects of the agreement related to trade deficits, currency and manufacturing imbalances, and environmental concerns. If certain conditions are met in the renegotiation, the U.S. would continue to participate in NAFTA, otherwise it would withdraw.

Congress would officially retract its approval of NAFTA 365 days after this bill is enacted, and notice of America’s withdrawal would be provided by the president to Canada and Mexico within the first six months of that timeframe.

To stabilize the balance of trade between the parties to NAFTA, emergency tariffs (taxes on imports), quotas, and other measures could be imposed or adjusted to correct a trade deficit with Canada or Mexico that exceeds 10 percent of U.S. exports to that country or tops $500 million for three straight years. Similar adjustments would be permitted to account for the negative effects of rapid or substantial changes in exchange rates between the U.S. dollar and the currencies of Canada or Mexico. NAFTA would also be adjusted to allow for more relief of U.S. agricultural producers when they are unfairly disadvantaged by imports from Canada or Mexico.

The secretaries of several federal agencies would be required to make certifications to Congress about the effects of NAFTA, including Commerce, Labor, Agriculture, and the Attorney General before the U.S. could continue participating in NAFTA. The certifications would verify that:

The number of jobs gained from exports to NAFTA trade partners exceeds the number lost because of imports from NAFTA parties, and that the purchasing power of Americans has increased.
The export of U.S.-manufactured goods to Canada and Mexico exceeds the amount imported from those countries.
That pollution on the U.S.-Mexico border has decreased since NAFTA began, and that fewer products containing pesticides or additives that don’t meet U.S. standards haven’t been imported.
That imports from Canada and Mexico aren’t resulting in an increase in crime related to drugs and controlled substances.
That Mexico’s government is elected in free and fair elections, ensures civil rights, and has a transparent justice system.

Argument in Favor:

Argument Against:

Impact:

Businesses and consumers that buy products from the U.S., Canada, or Mexico; Congress; relevant federal agencies; and the president.

Cost:

A CBO cost estimate is unavailable.

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Does NAFTA Need to be Renegotiated on Terms More Favorable to America?