What is the North American Free Trade Agreement?
- Author: Zachary Reyes May 11, 2017,
May 11, 2017, 17:15
U.S. President Donald Trump told the leaders of Canada and Mexico on Wednesday that he will not terminate the NAFTA treaty at this stage, but will move quickly to begin renegotiating it with them, a White House statement said.
After the obviously failed negotiation, Trump made sure to comment on his remarkable ability by admitting that NAFTA is "very complicated", after talking to leaders for just ten minutes. "Let me think about it", Trump said.
"I like both of these gentlemen very much", Trump said. "It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better".
"We have a very outstanding trade relationship with Canada". 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'.
"It is my privilege to bring Nafta up to date through renegotiation", Mr Trump said in the White House statement.
During his Oval Office comments, Trump left open the possibility that he could still pull the US out of the trade agreement, "if I'm unable to make a fair deal for the United States, meaning a fair deal for our workers and our companies".
Reworking the agreement had been one of Trump's key campaign promises, but it's up against a clock. Let's see if we can make it a fair deal, because NAFTA's been a frightful deal for the United States. He has long accused Mexico of destroying U.S.jobs. In this case, threatening to withdraw would have amounted to a formal step that started the process of giving Mexico and Canada six months notice that Trump meant to start negotiating.
US President Donald Trump has called it the "worst trade deal in history" and blamed it for the loss of about five million manufacturing jobs since 1994.
A veteran of Canada-US free trade said there are multiple layers between an announcement and an actual withdrawal.
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 in all three countries. Relationships are good-deal very possible!
The loonie has been buffeted by trade rhetoric and actions this week, including the imposition of US import duties on Canada's softwood lumber.
Mexican officials continued to talk to their USA counterparts as the hours passed, and toward the end of the day Pena Nieto called Trump for a conversation that lasted about 20 minutes.
A copy of the draft order posted online by the Financial Times says Canada has "continued to exploit the American dairy and lumber industries".
Instead, Mr Trump has asked the two nations to open talks on ways to make the deal more balanced from the U.S. perspective, which is allowed within the framework of the treaty.
"Hey, I'm a nationalist and a globalist", Trump told the Wall Street Journal on Thursday.
News of the possible U.S. pullout from Nafta rattled financial markets on Wednesday. Trump has walked back those sentiments, but withdrawal will remain on the table depending on how negotiations are handled.
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.