The Process For Free Trade Agreements
Last fall, President Trump joined Mexico and Canada and signed the United States-Canada-Mexico Agreement (USMCA). Unlike treaties, both the House of Representatives and the Senate must pass free trade agreements. Under Article I Section 8 of the Constitution, Congress is given sole authority to regulate commerce with foreign nations. The same section also requires the House to introduce all legislation that affects revenue, which includes free trade agreements.
Before free trade agreements are voted on, there are a number of steps that must be completed by both the executive and legislative branches. The first step is notifying Congress 90 days before negotiations begin. On May 18, 2017, the Trump administration sent a letter to Congress formally stating its plan to begin renegotiating the North American Free Trade Agreement. Exactly 90 days later, on August 16, 2017, the U.S., Canada and Mexico all met to begin the formal process of renegotiating. Soon after, the U.S. trade office notified Congress that changes to trade law would be necessary. This step must take place 180 days in advance before trade deals can be signed. On August 31, 2018, the Trump administration gave Congress the required 90-day notice that it planned to sign the new free trade agreement with Mexico and Canada. However, before the president can sign an agreement, he must first submit the text to Congress 60 days in advance, which the Office of the U.S. Trade Representative sent in late September.
Although all three countries signed the USMCA in November, there are still additional steps required before it becomes law. In January 2019, 60 days after the agreement was signed, the Trump administration submitted a six-page mandatory document detailing the list of changes the USMCA would make to trade law. After the document was submitted, on April 18, the U.S. International Trade Commission was required to complete an economic impact report of the agreement. Following this release, in late May, the Trump administration sent a Statement of Administrative Action to Congress, which is required at least 30 days in advance, signaling the pact could be coming soon.
Once the administration has submitted the USMCA to Congress, it will have numerous hurdles to pass. First, the free trade agreement will go to the House of Representatives Ways and Means Committee and the Senate Finance Committee for mock mark-ups. During this time, members of Congress will have the ability to discuss what is in the agreement. Failing to report the agreement to the floor within 45 days will result in the agreement automatically being discharged to the House floor. Once the House passes the agreement, it will then go to the Senate, which has 15 days to consider the agreement before automatically being discharged to the Senate floor. After the Senate passes the agreement, it is then signed into law by the President.
Although the process for free trades agreements include a number of steps, it ensures all countries reach the best deal possible. I look forward to completing this process and passing the USMCA.
