Death Threat to NAFTA

July 02, 1993

Suddenly, the pending North American Free Trade Agreement is in mortal danger as a result of federal Judge Charles R. Richey's demand for a time-consuming environmental impact study. This is a case of gross judicial overreach that challenges presidential authority to negotiate international treaties over a wide area. The Clinton administration should appeal the Richey ruling on an emergency basis and not flinch from an uphill battle for congressional ratification of NAFTA.

Environmental groups, which increasingly provide cover for the protectionist movement worldwide, are ecstatic. What they had hoped to accomplish by tough political pressure on wavering legislators is now made easier through the ruling of a 69-year-old Nixon appointee who caught the U.S., Mexican and Canadian governments unawares.

Judge Richey's contention that the National Environmental Policy Act required an environmental study for NAFTA is clouded by uncertainty whether this statute applies to international agreements.

It is true enough that the Constitution assigns to Congress the power to regulate foreign commerce. But it is equally true that Congress has recognized the need to give presidents creditable authority to negotiate trade pacts by enacting "fast-track" legislation requiring up-or-down votes without change within 90 days after a treaty is submitted.

Without this self-limitation by Congress, foreign governments would have no reason to think they could negotiate in good faith with Washington. It is just too bad a single federal district judge did not exercise similar restraint.

Ironically, on the very day Judge Richey was dropping his blockbuster on NAFTA, the Senate gave final approval to "fast-track" procedures for handling vital reforms in the General Agreement on Tariffs and Trade to liberalize commerce globally. The Richey ruling now undercuts President Clinton as he goes to the Group of Seven summit in Tokyo to push for a breakthrough in long-delayed GATT revisions -- a move that could help counteract world recession.

Clinton officials have made all the right noises about their intention to appeal and to seek NAFTA ratification this year. But the mischievous Richey edict gives organized labor and environmental groups much greater leverage to carry the load for open and closet protectionists on Capitol Hill.

In foreign policy terms, it is hard to exaggerate the damage to good relationships throughout Latin America that would be caused by the death of NAFTA. Much of the good work achieved by Mexican President Carlos Salinas in opening up his economy and reforming his society could be undermined. And, perversely, Mexican incentives for environmental clean-up under side agreements now nearing completion could vanish. On a global scale, U.S. plans to include agriculture, service industries and intellectual property under GATT rules -- developments of immense potential for the U.S. economy -- are now at risk. What a mess!

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