Starting with the North American Free Trade Agreement (NAFTA) in 1994, the United States has signed a number of international trade deals. And over the past 30 years, we’ve seen the disastrous results of these agreements.
Millions of jobs have moved overseas and the United States has lost key parts of its industrial base. But in addition to this lost manufacturing capacity, there’s also another troubling ramification — the erosion of America’s national sovereignty. And now we’re seeing that play out in real-time as Mexico looks to challenge recent actions by the U.S. Commerce Department.
In September, the Commerce Department proposed a ban on imports of “connected” vehicles. The reason for this is eminently sensible — these types of automobiles contain software and hardware from China and Russia. It’s quite possible that such advanced vehicles could collect sensitive data — and pose a national security risk.
Commerce didn’t undertake its decision lightly. In February, the department launched a probe of national security threats within the connected vehicle supply chain. And now, after months of study, Commerce has proposed banning connected software for vehicles starting in 2027. Additionally, vehicles with connected hardware would be banned as of 2030.
In proposing the ban, the Commerce Department explained that “the incorporation of progressively more complex hardware and software systems” in advanced vehicles can be accessed by “malign actors.” In fact, this type of equipment is “easily exploitable by [China] and Russian authorities.”
Specifically, Commerce believes this would allow “foreign adversaries to exfiltrate sensitive data collected by connected vehicles and, potentially, allow remote access and manipulation of connected vehicles driven by U.S. persons.”
Now that Commerce has officially announced the proposed ban, however, Mexico is objecting.
But why should Mexico object?
Because Mexico has become a key assembly point and manufacturing partner for China. As Mexico explained in its opposition to the potential ban: “From Mexico’s perspective, this…could impact vehicles produced domestically and exported to the United States market.”
Essentially, Mexico worries that it could “face disruptions in supply chains from China.” That’s because Mexico acknowledges its newfound reliance on China, and admits that assembly has become a “predominant activity” in its economy.
But even if Mexico were to be impacted by such a national security decision, how could it have the power to nullify the actions of the U.S. government?
Mexico believes that the Commerce rule would violate provisions of both the U.S.-Mexico-Canada Agreement (USMCA) — the updated version of NAFTA that took effect in July 2020—and the World Trade Organization (WTO).
In its official comments, Mexico explained that the proposed Commerce ban should be nullified by USMCA Article 2.11, which states that parties shall not “adopt or maintain any prohibition or restriction on the importation of any good of another Party or on the exportation or sale for export of any good destined for the territory of another Party.”
Essentially, Mexico wants to strike down a U.S. national security measure because it could impact their automotive exports. But that demonstrates precisely why international trade agreements do nothing to support U.S. sovereignty.
If anything, trade deals surrender America’s self-governance. Specifically, they limit the ability of the federal government to respond to threats or to provide favorable treatment for domestically produced goods.
There’s little to be gained by progressively signing away more and more of America’s sovereignty. If the loss of industrial capacity isn’t enough to worry lawmakers, then the idea that another country could overrule U.S. national security should be alarming.
Going forward, the wisest course would be for the United States to disentangle from global trade agreements that clearly do not have America’s best interests at heart.
Zach Mottl is chairman of the Coalition for a Prosperous America and president of Atlas Tool Works. Follow him @ZachMottl
