Trump says US won't leave NAFTA _ for now

Remigio Civitarese
Aprile 28, 2017

President Donald Trump makes a possibly risky move with two of America's biggest trade relationships - worth a total of $1.2 trillion. The White House notably didn't swat down Wednesday's reports, and merely said it wouldn't comment on rumors. That led to a Pena Nieto phone call with President Donald Trump, a US promise not to leave NAFTA "for now" and a commitment by all three nations in the pact to work on renegotiating it.

Both the Mexican and Canadian governments issued statements confirming their conversation with Trump late Wednesday night. Still, he has yet to make good on his promise to unravel the nuclear deal his predecessor struck with the country - in Trump's eyes, "one of the worst deals I've ever seen".

Prior to Trump's election officials in the United States, Canada and Mexico routinely promoted free trade, notably praising their close ties under Nafta and pointing to the jobs and wealth resulting from the agreement.

"I think we're going to be very favorably disposed", Trump added, joking of their meeting: "I'll tell him about North Korea and he'll tell me about lemons".

The businessman pledged that he would renegotiate or withdraw from NAFTA his first day in office.

The White House had released a statement late Wednesday saying only that Trump assured the two leaders the US wouldn't bolt NAFTA at this time.

Trade experts say repealing NAFTA, which links the U.S., Canadian, and Mexican economies, would disrupt all three economies.

Nafta replaced a 1989 bilateral free trade deal between Canada and the United States which Ottawa has said it would fall back on if the current agreement was dumped.

President Trump has put Mexico and Canada on notice that he wants to change up USA participation in the North American Free Trade Agreement, or NAFTA.

Trump hasn't said exactly what he wants in a new deal. Instead, he is looking to renegotiate a better deal for all three countries.

This is not a wise move as the Trump bravado was exclusively to jump-start free trade negotiations, which it has, not start a trade war, as Clark's proposal if implemented, would surely do. The law Congress passed to enact the trade pact might remain in place, forcing Trump to wrangle with lawmakers and raising questions about the president's authority to raise tariffs on Mexican and Canadian imports.

A week ago, he also blasted Canada for practices he labeled as "disgraceful" that he says have hurt dairy farmers in Wisconsin and upstate NY.

Stock opened slightly higher as a flood of earnings hit the market and investors mull President Trump's tax plan and his decision to stay in NAFTA for now.

After NAFTA opened up the Mexican market, tons of yellow corn from the USA flooded in. He softened his stance after stepping into the Oval Office, though his bombastic rhetoric and repeated policy U-turns on NAFTA may be fraying Washington's relations with Ottawa and Mexico City.

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