“I think NAFTA has been a catastrophic trade deal for the United States and a bad trading agreement for the US. It hurts us with Canada, and it hurts us with Mexico.”
President Trump and the leaders of Mexico and Canada agreed Wednesday to renegotiate the North American Free Trade Agreement (NAFTA).
On Wednesday, President Trump said, “It is my privilege to bring NAFTA up to date through renegotiation. It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the result will make all three countries stronger and better.”
According to a statement issued by the White House, President Trump “agreed not to terminate NAFTA at this time and that all three leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the trade deal to the benefit of all three countries.”
While on the campaign trail before his election, Trump repeatedly spoke against the trade agreement, calling it a “disaster.”
This is classic President Trump “carrot and stick” negotiation style. He had issued a statement indicating the US would pull out of NAFTA if the agreement could not be renegotiated. If the parameters of the withdrawal statement were implemented, it would have given the leaders of Canada and Mexico six months’ notice of the US decision to terminate the agreement.
Upping the ante, President Trump announced on Monday he would slap hefty tariffs on softwood lumber being imported from Canada. Trump has also claimed Canadian milk product pricing policies are hurting the American dairy industry.
Continuing the pressure on the NAFTA partners, President Trump said, “I am very upset with NAFTA. I think NAFTA has been a catastrophic trade deal for the United States and a bad trading agreement for the US. It hurts us with Canada, and it hurts us with Mexico.”
Last month, the Trump administration submitted a set of guidelines to Congress for renegotiating NAFTA. Acting US Trade Representative Stephen Vaughn notified Congress the administration would open talks with Mexico and Canada to renegotiate the pact, which took effect in 1994. Vaughn informed Congress in an eight-page draft letter outlining the president’s intentions.
President Trump’s tactic of threatening strong action forced the leaders of Mexico and Canada to the negotiation table.
Mexican Economy Minister Ildefonso Guajardo said that Mexico would be ready to start NAFTA talks any time after the end of May but would wait until the United States and Canada finished their legislative processes to prepare for negotiations. Speaking at a news conference in Houston on Friday, Canadian Prime Minister Justin Trudeau said he was open to working with the Trump administration to revise NAFTA.
US Commerce Secretary Wilbur Ross stated that sometime in the next couple of weeks, he hopes to send a letter notifying Congress that the Trump administration intends to launch NAFTA negotiations in 90 days. “That’s what triggers the beginnings of the formal process itself,” Ross said while speaking at a news conference with Mexican economy minister, Ildefonso Guajardo.
