Category: Donald Trump / World Politics / Trade
Trump steps back from brink of killing North American trade pact
06:49 UTC+8 April 28, 2017
Donald Trump says NAFTA has been a "horrible" deal for the United States. (AP: Alex Brandon, file)
President Donald Trump has said he pulled back from the brink of killing the 23-year-old trade pact with Canada and Mexico following requests from their leaders, but expressed optimism about winning better terms for the United States in a renegotiated deal.
Key points:
- Trump campaigned on pulling out of NAFTA if he could not secure a better deal
- Canadian PM Trudeau says he discussed ways to improve NAFTA with Trump
- Trump maintains that he will "terminate NAFTA" if "unable to make a fair deal"
Mr Trump, during a White House appearance with Argentine President Mauricio Macri, said terminating the North American Free Trade Agreement (NAFTA) — a pact he has long condemned as unfair to the United States — "would be a pretty big shock to the system", though he was planning to do so within two or three days.
Hours after White House officials disclosed that Mr Trump and his advisers had been considering an executive order to withdraw from NAFTA, he said he received telephone calls from Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau.
"They asked me to renegotiate. I will," Mr Trump said.
"And I think we'll be successful in the renegotiation, which frankly would be good because it would be simpler [than killing NAFTA]."
Mr Trudeau said he had warned Mr Trump of the disruption that pulling out of NAFTA would cause, while Mexico's Foreign Minister added that a good outcome for all three countries was possible under a new accord.
"That's not something that either one of us would want," Mr Trudeau said, "so we agreed that we could sit down and get to work on looking at ways to improve NAFTA".
News of the possible US pull-out from NAFTA rattled financial markets yesterday, although relative calm returned after Mr Trump's comments
Mexico, Canada and the United States form one of the world's biggest trading blocs, and trade disruptions among them could adversely affect agricultural, automotive, energy and other sectors across the globe, including in Australia.
When implemented NAFTA erased most trade and tariff barriers between the neighbours, but Mr Trump and other critics have blamed it for deep US job cuts.
Mr Trump campaigned for president last year on a pledge to pull out of NAFTA if he could not renegotiate better terms.
The United States went from running a small goods trade surplus with Mexico in the early 1990s to a $US63 billion ($84 billion) deficit in 2016 — meanwhile, Canada currently sends 75 per cent of all its exports to the United States.
On Thursday, Mr Trump said NAFTA had been "horrible" for the United States but very good for Canada and Mexico.
"If I'm unable to make a fair deal for the United States, meaning a fair deal for our workers and our companies, I will terminate NAFTA," Mr Trump said.
"But we're going to give renegotiation a good strong show."
Reuters
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