Candidate Trump ran for US president on a platform heavy on fair-trade/anti-globalization rhetoric. Among his campaign statements were proposals to 1) renegotiate NAFTA, 2) impose significant new tariffs on imports from China and 3) scrap the Trans-Pacific Partnership (TPP) trade agreement. This legal update provides the first in a series of analyses on what the incoming administration's options are and what steps it is likely to take on a variety of international trade and economic policies.
The global outlook for trade and international economic policy was already impacted by the decision of the United Kingdom to leave the European Union as well as resistance among EU member states to recent trade agreements negotiated by the EU Commission. A lack of clarity around the steps the Trump administration might take adds to the existing uncertainty. One clear policy development is that TPP will not get a vote in Congress this year. We noted in a prior update that there was little chance for TPP to receive a vote in the "lame duck" session regardless of the election outcome. Under a Trump administration the outlook for TPP beyond this year is poor. If the President-elect follows through on his campaign promises, then the incoming administration will actually withdraw from the agreement entirely. This would set the stage for them to start from scratch on its international economic plan in Asia.
Beyond TPP, negotiations with the European Union over the Trans-Atlantic Trade and Investment Partnership Agreement (TTIP) are in limbo as negotiations, which were already bogged down, cease in the waning days of the Obama administration. The outlook for the Trade in Services Agreement has deteriorated as negotiations have stalled and negotiators are running out of time. Negotiators are giving one last hard push at trying to close out the Environmental Goods and Services Agreement (EGSA). Even if negotiators can conclude the agreement, the notice and consultation requirements laid out in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 ("TPA" or "fast track") likely prevent the current administration from being able to sign the agreement even if negotiations conclude.
Obviously, the proposal to renegotiate or withdraw from NAFTA is one of the headline-grabbing proposals. President-elect Trump's specific proposal is that if Canada and Mexico were unwilling to renegotiate the agreement, he would withdraw from NAFTA. Canada has...