Trump Says He Was 'Set to Terminate' NAFTA

Kristopher Drake
May 12, 2017

Constant contact between Canadian and American legislators is one reason U.S. President Donald Trump this week backed off plans to scrap the North American Free Trade Agreement (NAFTA).

- President Donald Trump told the leaders of Canada and Mexico he was not immediately planning to end the North American Free Trade Agreement, a pact which he railed against as a candidate and as recently as last week declared was harmful to US workers.

Trump's decision to remain in NAFTA came the same day a senior administration official revealed the White House was considering an executive order to withdraw from the trade accord.

Trump sounded satisfied that his peers had agreed to negotiate swiftly.

'The president. made it clear that if the parties are unable to agree on a deal that is fair for American workers and companies, after giving renegotiation a good shot, he will move forward with termination, ' Spicer told reporters.

NAFTA has been a fixture in USA relations with its two neighbors since it went into effect January 1, 1994 under president Bill Clinton.

Trudeau says the two agreed instead they could sit down and work on ways to make the deal better, a renegotiation process similar to what's been done in the past. "What many Americans don't always fully appreciate is, Canada is the single biggest customer of the United States". Trump's nominee for U.S. trade representative, Robert Lighthizer, has yet to be confirmed by the full Senate.

While campaigning for president, Trump slammed NAFTA as a "disaster" and the "worst trade deal in history".

"Look, my problem is I have established a very good personal relationship with President Xi".

Some analysts watching events this week believe there's a simpler explanation for what's been going on: Trump wants to flex some muscle entering the negotiations and the threat to pull out is his strongest lever.

He also called a new Canadian tariff regime affecting USA dairy products a "disgrace".

Canada sends 75 per cent of all its exports to the United States.

The leaked draft executive order sets a high bar for trade agreements, saying they must "increase America's economic growth, decrease America's trade deficit, raise American wages, maintain the integrity of America's borders, and strengthen the manufacturing and defence industrial bases of the United States". Yet in practice, some economists point out, Trump has been less stridently anti-trade than his campaign rhetoric suggested he would be. In the last one week, he has bitterly complained about some of Canadian trade practices especially over softwood lumber and dairy products.

Another recent example of this phenomenon comes in regard Chinese President Xi Jinping, with whom Trump spent two days at Mar-a-Lago earlier this month.

The reports that Trump might withdraw from NAFTA were followed by a sharp drop in the value of the Mexican peso against the US dollar. But it may have been even harder on the USA, and Trump would have faced intense opposition from business groups and high-profile Republicans in Congress. Immediately the development was announced, the currencies of Canada and Mexico rebounded during the Asian session.

Other reports by Ligue1talk

Discuss This Article