Comparing the Economic and National Security Provisions in the New U.S. Trade Deals
By my count, we now have the legal texts of five Trump administration trade agreements. Will there be enforcement actions under these agreements? Without a neutral adjudication mechanism, how enforceable are they? I'm not sure about the real world impact of the agreements, but nevertheless, with this many legal texts, we are at the point where it's interesting to compare the wording of specific provisions across the agreements.
In this post, I'm going to look at the provision that tries to induce trading partners to coordinate with the U.S. on import restrictions designed to protect economic and national security. Here is the text of the provision in each of the five agreements:
Article 5.1: Complementary Actions
1. If the United States imposes a customs duty, quota, prohibition, fee, charge, or other import restriction on a good or service of a third country and considers that such measure is relevant to protecting the economic or national security of the United States, the United States intends to notify such measure to Malaysia for the purpose of economic and national security alignment. Upon receiving such notification from the United States, Malaysia shall adopt or maintain a measure with equivalent restrictive effect as the measure adopted by the United States or agree to a timeline for implementation that is acceptable to both Parties, to address a shared economic or national security concern, guided by principles of goodwill and a shared commitment to enhancing bilateral relations between the United States and Malaysia.
Article 5.1: Complementary Actions
1. When the United States imposes a customs duty, quota, prohibition, fee, charge, or other import restriction on a good or service of a third country pursuant to relevant domestic law, the United States intends to notify such measures to Cambodia for the purpose of economic security alignment. Upon receiving such notification from the United States, Cambodia shall regulate the importation of that good or service into its territory through similar measures as those of the United States in a manner that does not infringe on Cambodia’s sovereign interests.
Article 5.1: Complementary Actions
1. When the United States imposes a customs duty, quota, prohibition, fee, charge, or other import restriction on a good or service from a third country pursuant to relevant domestic law, and such measures are taken in furtherance of shared economic and national security objectives, El Salvador shall regulate the importation of that good or service into its territory through measures, deemed appropriate by El Salvador, having an equivalent restrictive effect as those of the United States.
Article 5.1: Complementary Actions
1. The United States and Guatemala intend to strategically align their trade and investment policies to further their shared economic and national security objectives. When the United States imposes a customs duty, quota, prohibition, fee, charge or other import restriction on a good or service of a third country pursuant to relevant domestic law and considers that the measure is relevant to protecting its economic or national security against non-market policies and practices of a third country, Guatemala shall regulate, consistent with Guatemala’s laws and regulations, the importation of that good or service into its territory through measures with equivalent effect as those of the United States. The Parties may discuss such measures in the Working Group.
Article 4.1: Complementary Actions
1. If the United States adopts a border measure or other trade action and considers that such measure is relevant to protecting the economic or national security of the United States, Argentina, when appropriate, shall adopt a measure with similar effect to the measure adopted by the United States.
Focusing on the enforceability of the provisions, all of the provisions seem to provide a good deal of leeway to the trading partner, but each does it with unique wording:
- The Malaysia one says "Malaysia shall adopt or maintain a measure with equivalent restrictive effect as the measure adopted by the United States or agree to a timeline for implementation that is acceptable to both Parties" (emphasis added)
- The Cambodia one says "Cambodia shall regulate the importation of that good or service into its territory through similar measures as those of the United States in a manner that does not infringe on Cambodia’s sovereign interests" (emphasis added)
- The El Salvador one says "El Salvador shall regulate the importation of that good or service into its territory through measures, deemed appropriate by El Salvador, having an equivalent restrictive effect as those of the United States" (emphasis added)
- The Guatemala one says "Guatemala shall regulate, consistent with Guatemala’s laws and regulations, the importation of that good or service into its territory through measures with equivalent effect as those of the United States" (emphasis added)
- The Argentina one says "Argentina, when appropriate, shall adopt a measure with similar effect to the measure adopted by the United States" (emphasis added).
Do all of these variations in the wording get us to the same place? And is that place one in which these governments can basically decide whether to adopt the U.S. import restrictions or not?
Going beyond these differences in wording, in terms of practical outcomes for bilateral relations on this issue, to what extent will the issue come up in discussions between the U.S. and these governments? Will there be informal talks when the U.S. wants these governments to follow U.S. approaches to import restrictions? Will there be formal requests for consultations under the brief consultations provision in each agreement? Will the U.S. just take action unilaterally, as the agreements suggest is possible? And with regard to transparency here, if anything is raised by the U.S. in this area, will the public/Congress be informed about it, or will it all be done confidentially?
At this point, I have lots of questions but no answers.