Donald Trump agrees not to pull out of Nafta 'at this time' in phone call with Mexican and Canadian leaders
Donald Trump has told the leaders of Mexico and Canada that he will not pull out of the North American Free Trade Agreement "at this time" after reports that the US president had drawn up an executive order to withdraw from the pact.
The White House made the surprise announcement in a read-out of calls on Wednesday with Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau.
Describing the conversations as "pleasant and productive", the statement said: "President Trump agreed not to terminate Nafta at this time and the leaders agreed to proceed swiftly ... to enable the renegotiation of the Nafta deal to the benefit of all three countries".
"It is my privilege to bring Nafta up to date through renegotiation," Mr Trump said.
I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate NAFTA rather than terminate. I agreed..
— Donald J. Trump (@realDonaldTrump) April 27, 2017
...subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA. Relationships are good-deal very possible!
— Donald J. Trump (@realDonaldTrump) April 27, 2017
The Mexican government confirmed the conversation in a statement issued late on Wednesday.
"The leaders agreed on the convenience of maintaining the North American Free Trade Agreement and working together with Canada to carry out a successful renegotiation for the benefit of all three countries," the statement read.
The announcement came after reports that the president was considering issuing an executive order to pull the United States from the agreement as soon as Mr Trump's 100th day in office on Saturday.
Chart - US, Mexican trade balance
Mr Trump had threatened to renegotiate the Nafta pact during the election campaign as he said it had destroyed American jobs, although he has backed off tough action in trade since taking office in January.
A disruption in trade between the three Nafta partners could wreak havoc in the auto sector and other industries, hitting profits at companies that have benefited from zero-level tariffs and Mexico's relatively low labor costs. It would also hit US agricultural exports hard.
The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers...
— Donald J. Trump (@realDonaldTrump) January 26, 2017
Mr Trump has repeatedly vowed to pull out from the 23-year-old trade pact if he is unable to renegotiate it with better terms for America. He has long accused Mexico of destroying US jobs. The United States went from running a small trade surplus with Mexico in the early 1990s to a $63 billion deficit in 2016.
Mr Trump has stopped short of a formal threat to kill Nafta so far, but legal experts say he likely has the authority as president to give a 60-day notice that America is exiting the pact. It was under an executive order signed by Mr Trump on Jan. 23 that the United States pulled out of the sweeping Trans-Pacific Partnership trade deal.
Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!
— Donald J. Trump (@realDonaldTrump) April 25, 2017
Mr Trump recently ramped up his criticism of Canada and this week ordered 20 percent tariffs on imports of Canadian softwood lumber, setting a tense tone as the three countries prepared to renegotiate the pact.
Canada said it was ready to come to talks on renewing Nafta at any time.
"At this moment Nafta negotiations have not started. Canada is ready to come to the table at any time," said Alex Lawrence, a spokesman for Canadian Foreign Minister Chrystia Freeland.
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