White House read­ies or­der to quit NAFTA

Metro USA (New York) - - News -

The White House is con­sid­er­ing a draft ex­ec­u­tive or­der to with­draw the United States from the North Amer­i­can Free Trade Agree­ment, a se­nior Trump ad­min­is­tra­tion of­fi­cial said on Wed­nes­day.

The ac­tion un­der con­sid­er­a­tion could sig­nal height­ened prospects that one of the world’s big­gest trad­ing blocs could un­ravel in an eco­nom­i­cally dam­ag­ing dis­pute.

The pos­si­ble ex­ec­u­tive or­der, first re­ported by Politico, sent stocks and cur­ren­cies fall­ing in Mexico and Canada. In­vestors were re­think­ing their as­sump­tions that Trump would back away from some of the dras­tic ac­tions on trade that he had promised dur­ing the pres­i­den­tial cam­paign.

“It is a clear in­di­ca­tion that they [in the White House] are want­ing changes but we will have to see what emerges,” said Paul Fer­ley, as­sis­tant chief econ­o­mist at Royal Bank of Canada.

Trump has long ac­cused Mexico of de­stroy- ing U.S. jobs and re­cently ramped up his crit­i­cism of Canada, saying last week that Ottawa’s pro­tec­tion of its dairy in­dus­try was “un­fair.”

Trump this week or­dered 20 per­cent tar­iffs on im­ports of Cana­dian soft­wood lum­ber, set­ting a tense tone as the three coun­tries pre­pared to rene­go­ti­ate the 23-year-old trade pact.

The pres­i­dent has faced a series of set­backs since he took of­fice in Jan­uary, with courts block­ing parts of his orders to limit im­mi­gra­tion and the Repub­li­can-con­trolled Congress pulling leg­is­la­tion he backed to over­haul the U.S. health­care sys­tem.

As pres­i­dent, Trump has broad author­ity on trade pol­icy, in­clud­ing the power to with­draw from NAFTA with­out votes by Congress, ac­cord­ing to many le­gal an­a­lysts. It was un­der an ex­ec­u­tive or­der signed by Trump on Jan. 23 that the United States pulled out of the sweep­ing Trans-Pacific Part­ner­ship trade deal.

Mexico had ex­pected to start NAFTA rene­go­ti­a­tions in Au­gust but the pos­si­ble ex­ec­u­tive or­der could add ur­gency to the timeline.

Trump crit­i­cized Mexico ex­ten­sively dur­ing his pres­i­den­tial cam­paign. The United States went from run­ning a small trade sur­plus with Mexico in the early 1990s to a $63 bil­lion deficit in 2016.

Canada said it was ready to come to talks on re­new­ing NAFTA at any time.

“At this mo­ment NAFTA ne­go­ti­a­tions have not started. Canada is ready to come to the ta­ble at any time,” said Alex Lawrence, a spokesman for Cana­dian For­eign Min­is­ter Chrys­tia Free­land.

GETTY IM­AGES

A car car­rier crosses the Peace Bridge over the Ni­a­gara River on the U.S.- Canada bor­der in Buf­falo, New York.

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