I've been asked this question, and I'm not completely sure of the answer. This is what a CRS report says:
An interesting question is the basis on which U.S.-Canada trade would be conducted following a withdrawal from NAFTA. Sec. 107 of the NAFTA implementing legislation “suspended” CFTA during the time that the two countries remain parties to NAFTA. It amended CFTA implementing legislation to supersede certain of its provisions while continuing other provisions. The CFTA potentially could “snap-back” into force after a withdrawal from NAFTA, but it may require the issuance of a presidential proclamation to return it into force.
And this is Section 107 of the NAFTA implementing legislation:
SEC. 107. TERMINATION OR SUSPENSION OF UNITED STATES-CANADA FREE-TRADE AGREEMENT.
Section 501(c) of the United States-Canada Free-Trade Implementation Act of 1988 (19 U.S.C. 2112 note) is amended to read as follows:
‘‘(c) TERMINATION OR SUSPENSION OF AGREEMENT.— ‘
‘(1) TERMINATION OF AGREEMENT.—On the date the Agreement ceases to be in force, the provisions of this Act (other than this paragraph and section 410(b)), and the amendments made by this Act, shall cease to have effect.
‘‘(2) EFFECT OF AGREEMENT SUSPENSION.—An agreement by the United States and Canada to suspend the operation of the Agreement shall not be deemed to cause the Agreement to cease to be in force within the meaning of paragraph (1).
‘‘(3) SUSPENSION RESULTING FROM NAFTA.—On the date the United States and Canada agree to suspend the operation of the Agreement by reason of the entry into force between them of the North American Free Trade Agreement, the following provisions of this Act are suspended and shall remain suspended until such time as the suspension of the Agreement may be terminated:
‘‘(A) Sections 204 (a) and (b) and 205(a).
‘‘(B) Sections 302 and 304(f).
‘‘(C) Sections 404, 409, and 410(b).’’
If anyone has further thoughts, feel free to offer them in the comments.
