U.S. won't opt out of NAFTA — for now, Trump says

U.S. President Donald Trump tweets he will seek to renegotiate, rather than cancel, the North American Free Trade Agreement provided a "fair deal for all" can be reached with Canada and Mexico.

Washington seeks 'fair deal for all' with Canada and Mexico

President Donald Trump signed an executive order Wednesday calling for a review of the designation of tens of millions of acres of land as national monuments. While this was going on, White House aides were telling different media outlets that another executive order is being drafted to withdraw the U.S. from NAFTA. (Carolyn Kaster/Associated Press)

U.S. President Donald Trump tweeted early today he will seek to renegotiate, rather than cancel, the North American Free Trade Agreement provided a "fair deal for all" can be reached with Canada and Mexico.

But failing that, the U.S. will cancel the tripartite agreement first struck in the early 1990s, Trump said via Twitter. 

Trump's tweets echoed an earlier statement from the White House, issued amid U.S. media reports on Wednesday that Washington was mulling a plan to pull out of NAFTA, and would begin that process with an executive order. 

Trump said he agreed to renegotiate the deal after phone calls with Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto. 

But "if we do not reach a fair deal for all, we will then terminate NAFTA," Trump said. 

"Relationships are good," he added. "Deal very possible!"

All three leaders committed to proceeding "swiftly," a White House statement claimed.

The online site Politico had reported Trump was looking at an executive order drafted by aides Steve Bannon and economic assistant Peter Navarro. CNN said he might simply go ahead with renegotiations, as originally planned.

The debate played out in the press Wednesday as some outlets quoted officials insisting the signing was imminent, while other officials dismissed the reports as "just a rumour."

The leaks to media appeared to jolt markets. The Canadian dollar fell sharply on Wednesday afternoon, closing at 73.52 cents against the greenback, but rebounded in early morning trading Thursday to about 73.89.

U.S. Commerce Secretary Wilbur Ross told reporters yesterday that if NAFTA was working properly, there wouldn't be disputes over things like dairy products and softwood lumber. (Andrew Harnik/Associated Press)

White House Press Secretary Sean Spicer declined to comment on the reports at his afternoon briefing.

"The president has made addressing the problems of NAFTA a priority throughout the campaign, and once the president makes a decision about how he wants to address that, we'll let you know," he said.

The commerce secretary, at an unrelated briefing Wednesday evening, also didn't tip his hand.

"My practice is to comment on things we've actually done or are doing as opposed to commenting on rumours," Wilbur Ross said.

The Mexican government has said it can't conclude a NAFTA deal after the first quarter of next year. Ross has acknowledged that it gets harder if talks linger too much into next year. 

Mexico has an election in July 2018. Then there's a five-month lame-duck period in Mexico. And in the midst of all that, U.S. lawmakers will be embroiled in their own midterm elections, complicating the task of trade-related tradeoffs. 

By law, Congress must be consulted on negotiations, then vote to ratify a deal.

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"It's been frustratingly slow," Ross said of Congress earlier this month. "They've been very, very slow on completing the hearings and voting on our new U.S. trade representative Bob Lighthizer. That's been not helpful."

As for the law related to terminating NAFTA, pulling out requires six months notice. The White House is also required to give Congress 90 days notice before commencing trade deal talks.

Along with immigration, Trump made trade a dominant theme in his campaign stops, arguing that the U.S. was being hurt by trade deficits and in terms of American job losses by NAFTA.

Within days of taking office, he signed an executive order to withdraw from the 12-nation Trans-Pacific Partnership free-trade deal.

Michael Froman, former U.S. trade representative, told CBC's Power and Politics on Wednesday much of what will be discussed will be familiar ground, albeit with a less predictable partner.

"We already have renegotiated NAFTA – it was called TPP," he said. "Both Canada and Mexico agreed to a number of revisions that were not in NAFTA that helped make it a 21st-century agreement.

"It's unclear at this point what it is that the Trump administration will seek that goes beyond what was in TPP and what the balance of benefits and tradeoffs will be for each of the parties around the table."

Froman, now a distinguished fellow at the Council of Foreign Relations, said that it can be reasonably expected that the White House will want to address supply management in the dairy industry and seek changes with respect to softwood lumber, among the vocal criticisms of the Trump team of late.

With files from The Canadian Press and The Associated Press


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