Trump says to renegotiate NAFTA, no exit for now


Trump says to renegotiate NAFTA, no exit for now

Washington (AFP) – President Donald Trump stopped short Wednesday of pulling out of NAFTA despite earlier threats to exit the trade deal, saying he will renegotiate the agreement with Canada and Mexico.

The announcement followed US media reports that Trump was considering giving formal notice of pulling the United States out of the North American Free Trade Agreement.

Trump campaigned for president on promises to abandon or renegotiate NAFTA, a deal he claims is a “disaster” that has resulted in millions of US industrial jobs lost mostly to Mexico. He described it as “the worst trade deal maybe ever signed” in a September debate with Hillary Clinton.

Just last week Trump said NAFTA was a “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.”

In phone calls Wednesday to Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau, Trump “agreed not to terminate NAFTA at this time,” the White House said in a statement.

It added that “the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries.”

“It is my privilege to bring NAFTA up to date through renegotiation,” Trump said, according to the White House statement.

“I believe that the end result will make all three countries stronger and better,” Trump said.

NAFTA was established January 1, 1994 under then-president Bill Clinton. It removed tariffs and allows a free flow of goods between the United States, Canada and Mexico.

The US trade deficit in goods and services last year with Mexico was $62 billion, but with Canada the US had a surplus of $8 billion.

The news soothed fears of a possible trade war and sent most Asian markets up Thursday.

– ‘Rumor’ of US exit from NAFTA –

Two White House officials told the Politico news website that a draft executive order for the US exit from NAFTA was in the final stages of review, and could be unveiled within a week or two. A senior administration official told The New York Times that Trump was likely to sign the order.

But late Wednesday Commerce Secretary Wilbur Ross brushed off the reports as “rumor.” 

“There was a rumor today that there would be an executive order, just a rumor, and my practice is to comment on things we have actually done or are doing as opposed to commenting on rumors,” Ross said.

According to The Washington Post, Trump is expected to tell Congress that he intends to renegotiate the deal, but also hold the threat of exiting the agreement to gain more concessions from Mexico and Canada.

The administration’s talk of leaving NAFTA has run into opposition from several prominent Republican lawmakers, including border senators John McCain of Arizona and John Cornyn of Texas, Politico reported.

“I’d be glad to have renegotiation of some of the terms of it, because a lot of time has passed,” McCain told Politico. However a withdrawal would “be disgraceful and a disaster.”

– Trade tension with Canada –

The Trump administration has slapped tariffs in recent days on some imports of Canadian timber and threatened to retaliate against Canadian moves that harm US dairy farmers. Timber and milk, however, are not covered by NAFTA.

The timber dispute between Washington and Ottawa has been going on for at least 35 years, with US producers accusing Canada of exporting lumber at unfairly subsidized prices.

Canada’s dairy sector is protected by tariffs on imports and controls on domestic production as a way to support prices for the country’s farmers.

The latest dairy trade row was triggered when Canada extended those policies to apply to ultrafiltered milk, a product used in cheese production and at the center of a thriving US export business.

President Donald Trump blames NAFTA for the loss of millions of US industrial jobs, mostly to Mexico
Copyright AFP/File PEDRO PARDO
North American Free Trade Agreement
Copyright AFP John SAEKI


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