President Trump said Thursday that he has decided to wait to start the formal process of withdrawing the United States from the North American Free Trade Agreement after calls from the leaders of Mexico and Canada.
Trump, speaking in the Oval Office, said he had been days away from signing the order to start the withdrawal process, but he said he has put that plan on hold after Wednesday phone calls from the president of Mexico, Enrique Peña Nieto, and the prime minister of Canada, Justin Trudeau.
Instead, Trump says he will push hard on a renegotiation of the agreement.
“They called me and they said, 'Rather than terminating NAFTA could you please renegotiate?'” Trump recounted. “I like them very much. I respect their countries very much. The relationship is very special. And I said I will hold on the termination. Let’s see if we can make it a fair deal, because NAFTA has been a horrible deal for the United States.”
Trump said if he had decided to sign an order within days announcing an intent to withdraw from NAFTA, it would have represented a “pretty big, you know, shock to the system.”
During his Oval Office comments, Trump left open the possibility that he could still pull the U.S. 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.”
But, he added, “we're going to give renegotiation a good, strong shot.”
Renegotiating or exiting NAFTA had been a top campaign promise from Trump. He said the 1990s trade agreement has “been very good” for both Canada and Mexico but “horrible” for the United States. He has complained that, among other problems, it has allowed Mexico to lure away U.S. factories and eliminate American manufacturing jobs.
Renegotiating or exiting NAFTA requires a formal process. In order to renegotiate the trade deal, he must notify Congress. To announce his intent to withdraw from the trade agreement, he would be required to formally notify Mexico and Canada.
Exiting NAFTA would be a major break from decades of U.S. trade policy, and it's unclear whether the order would been intended as a serious threat to leave the pact or simply an effort to put the country's neighbors on notice that Trump intends to rewrite the rules of North American trade.
Trump criticized Mexico's trade policy repeatedly during his campaign, adding to tensions over Trump's proposed border wall and his disparaging remarks about Mexican immigrants. In recent days, however, he has taken a harder line with Canada, blasting a recent change in the dairy pricing policy there. And Monday, the Commerce Department said it would begin charging a tariff on the import of softwood lumber from Canada into the United States, alleging Canada was improperly subsidizing its domestic timber firms.