Trump: US will stay in Nafta for now
Renegotiation process expected to start soon
WASHINGTON: President Donald Trump told the leaders of Mexico and Canada on on Wednesday that he would not immediately move to terminate the North American Free Trade Agreement, only hours after an administration official said he was likely to sign an order that would begin the process of pulling the United States out of the deal.
In what the White House described as “pleasant and productive” evening phone calls with President Enrique Peña Nieto of Mexico and Prime Minister Justin Trudeau of Canada, Trump said he would quickly start the process of renegotiating Nafta — not abandon it, as he said he would do during the 2016 presidential campaign if he could not rework the deal to his satisfaction.
“It is my privilege to bring Nafta up-todate through renegotiation,” Trump said in a statement issued by the White House at 10.33 p.m. “I believe that the end result will make all three countries stronger and better.”
The announcement appeared to be an example of Trump’s deal-making in real time. It followed a day in which officials signaled that he was laying the groundwork to pull out of Nafta — a move intended to increase pressure on Congress to authorise new negotiations, and on Canada and Mexico to accede to US demands.
It was not clear whether the president would still sign an executive action to authorise renegotiation of Nafta, which he once called the worst trade deal ever signed by the United States.
Washington must give Canada and Mexico six months’ notice before exiting the trade agreement, which came into force in 1994. Any action to that effect would start the clock.
But the prospect of the United States’ pulling out obviously alarmed the Canadian and Mexican leaders and prompted their calls to the White House.
The Mexican peso plummeted in trading after news broke at midday Wednesday that the White House had drafted an executive order withdrawing the United States from Nafta. Trudeau called Trump twice, on Tuesday and Wednesday, to discuss the sudden rupture in the trade relationship between the United States and Canada.
On Tuesday, the Trump administration announced that it would impose a tariff on Canadian softwood lumber, in retaliation for what it said was unfair treatment of US dairy farmers.
The president has repeatedly derided Nafta, describing it last week as “very, very bad” for the country, companies and workers, and he promised during his campaign that he would remove the United States from the deal if he could not negotiate improvements.
The White House wants Congress to authorise those negotiations under legislation that would allow expedited approval of the reworked agreement, but talks between administration officials and congressional Republicans have moved slowly.
While some of Trump’s senior advisers, notably Stephen Bannon and economist Peter Navarro, are eager to take strong steps on trade policy, another group — which includes Gary Cohn, the head of the National Economic Council — has argued for a more cautious approach, concerned that larger steps could cause economic disruptions.
Lately, Trump has taken the stronger line, moving to reshape the United States’ economic relationships with foreign nations. The Nafta order would come on the heels of an announcement of new tariffs on imports of Canadian lumber, and of reviews of whether imports of steel and aluminum are undermining national security.
“Nafta’s been very, very bad for our country,” Trump said last week. “It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes, or we are going to get rid of Nafta once and for all.”
Walking away from Nafta would disrupt the economies of the United States, Canada and Mexico and strain broader relations among the countries. Over the past two decades, their economies have become increasingly intertwined. The volume of trade has multiplied, and the manufacture of many goods, notably cars, involves multiple border crossings and factories in all three.