- - Monday, October 16, 2017


The U.S. Chamber of Commerce’s stentorian call to leave the North American Free Trade Agreement (NAFTA) largely undisturbed should be ignored by President Donald Trump.  The Chamber would make the U.S. Constitution subservient to short-term profits.  

Vladimir Lenin captured its avarice in his notorious assertion:  “The Capitalists will sell us the rope with which we shall hang them.”   Halliburton moved its headquarters from Dallas to Dubai.  Contrary to Mitt Romney, corporations are not people.  They feel no patriotism.  They don’t risk that last full measure of devotion in times of war.  Indeed, they exalt the doctrine that their sole purpose is profit maximization for their shareholders.  

President Trump is obligated to thoroughly renegotiate or abandon NAFTA to honor his constitutional oath to “preserve, protect and defend the Constitution of the United States.”  

Consider just one particularly egregious aspect of NAFTA, the investor-state dispute settlement (ISDS) regime. ISDS empowers private attorneys as arbitrators to interpret United States laws and issue enforceable judgments in violation of the Constitution’s Appointments Clause.

ISDS enables foreign investors to challenge actions of the Government of the United States before international arbitration tribunals composed of three private-sector lawyers.   Operating outside our Article III judicial system, these NAFTA arbitrators are empowered to order the United States to pay limitless compensation because of federal or state laws, court rulings, or other government actions which foreign investors claim violate dimly-defined foreign investor rights secured in NAFTA.  Moreover, the tribunals are not required to follow due process guarantees of the Constitution or judicial precedent.  Its rulings may not be appealed on the merits, yet are fully enforceable against the United States in U.S. courts.

A Spanish arbitrator, Juan Fernandez-Armesto, has voiced astonishment at NAFTA’s invasion of national sovereignty:  “When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all […] Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”

The U.S. Supreme Court declared in Buckley v. Valeo that any person exercising significant authority under the laws of the United States must be appointed consistent with the Appointments Clause of Article II.  It requires that all “officers” of the United States be appointed by the President with the advice and consent of the Senate.  NAFTA arbitrators exercise as much or more power than do Article III judges.

NAFTA’s permission to private arbitrators, often with conflicts of interest, to declare our sovereign acts illegal is outlandish.  Chief Justice of the United States, John Roberts, trenchantly observed in BG Group PLC v. Republic of Argentina that ISDS arbitrators possess the alarming power to review a nation’s laws and “effectively annul the authoritative acts of its legislature, executive, and judiciary.”  He added that by submitting to ISDS, a government “grants to private adjudicators not necessarily of its own choosing, who can meet literally anywhere in the world, a power it typically reserves to its own courts, if it grants it at all:  the power to sit in judgment on its sovereign acts.”

President Trump, who is fond of shouting that he was elected president of the United States not president of the World, should honor his words by addressing NAFTA’s unconstitutional overreach, starting with the elimination of ISDS. If that fails, he will have no alternative but to terminate NAFTA altogether.  And Congress should enact a companion law prohibiting any future international agreements from subcontracting out the business of our Article III courts to any international body whatsoever. 

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