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April 12 2018

Use Nafta to Ease Regulation

The Wall Street Journal
featuring Carrie L. Lukas

Congressional Republicans of late have become innovative about using procedural means to further their policies. Witness the latest idea from a trio of senators to transform the regulatory landscape.

In a March 20 letter to President Trump, Ted Cruz of Texas, Steve Daines of Montana and Cory Gardner of Colorado urged him to use the renegotiation of the North American Free Trade Agreement to reform domestic regulation and enhance U.S. competitiveness. Specifically, they suggested he include a “competitiveness” chapter in the new Nafta, streamlining permitting for projects, bolstering infrastructure and codifying key regulatory reforms. “Rather than pursuing a defensive strategy that focuses solely on what other countries are doing to us, we need to develop a more comprehensive, offensive U.S. strategy to strengthen our economy from within,” wrote the senators.

These ideas aren’t new. Congressional Republicans have been pushing them for years, and Mr. Trump campaigned on them. The novelty is the legislative vehicle: Nafta. Any final trade agreement will be ratified under Trade Promotion Authority, which requires only 50 votes in the Senate, and therefore escapes a Democratic filibuster. A competitiveness chapter can be included as an annex that applies only to the U.S., so that neither Mexico nor Canada would need to agree.

The Nafta vehicle would allow Republicans to multiply the Trump administration’s deregulatory wins, further bolstering the economy. Take project permitting. Washington can take years to conduct environmental assessments, turning off investors and running up costs. Alaska Sen. Dan Sullivan already has a proposal to overhaul the decades-old system that is ready-made for a new Nafta competitiveness chapter.

Equally important, such a chapter would allow Republicans to guard against regulatory incursions by future Democratic presidents. Mr. Trump has been aggressive in rolling back the Obama regulatory agenda, but a President Elizabeth Warren could pile the crushing rules back on. The Cruz-Daines-Gardner letter proposes including in any Nafta chapter the Regulations From the Executive in Need of Scrutiny Act, or Reins Act, a proposal that would require congressional approval of any regulation costing $100 million or more. The House passed that bill a year ago, but Senate Democrats stymied it with the threat of a filibuster.

Some conservatives feel uneasy about the idea of muddying up traditional trade talks. But it’s hard to envision this roiling Nafta negotiations as it would impose no obligations on the other parties.

Supporters argue that all trade discussions would benefit from an emphasis on structural issues that affect domestic competitiveness. Americans gripe about bad deals and unfair practices, while ignoring the barriers imposed by Washington. Instead of seeking to protect U.S. companies with tariffs or subsidies, why not put an emphasis on true competitive advantage? Such provisions might even make Nafta and other trade agreements more attractive to wavering Republicans—free-traders and protectionists alike.

Then there’s the worry that this would set a precedent, allowing that future President Warren to codify, say, union card check. But the better question is why she’d need precedent as her excuse. The idea is already out there. Democrats have long used trade talks to try to force costly labor rules, and they’ve never been deterred by Republican restraint before. President Obama (whose use of recess appointments the Supreme Court found unconstitutional) and Harry Reid (who killed the filibuster for nominations) proved the left isn’t constrained by procedural norms that get in the way of its agenda.

That realization has inspired Republicans to think more creatively about procedure—from bolder use of the Congressional Review Act, to the revival of congressional spending-rescission powers, to this Nafta plan. They recognize that they may have a brief window of power, a chance to do real good. They also see an icy Democratic resistance, which—also expecting the GOP’s time in power to be short—steadfastly refuses to compromise. Thwarting that blockade, taking this opportunity, requires a fresh approach to how things have traditionally been done.

That would be another accomplishment Republicans could use to motivate their base in the midterms—and another Trump promise fulfilled.

 

 

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Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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