President Donald Trump on Wednesday told his Mexican and Canadian counterparts he will not unilaterally pull the USA out of a mutual free trade agreement, but will renegotiate the pact.
Trump tweeted early Thursday that he has agreed to remain a partner in the much-discussed trade agreement in calls he received from Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau.
Senior White House officials had spent recent days discussing steps that could be taken to start the process of renegotiating or withdrawing from NAFTA before the end of Trump's first 100 days in office, according to a person familiar with the president's thinking.
'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, ' Trump said in the statement.
Trump has already removed the United States from another massive trade pact, the Trans Pacific Partnership, which was negotiated under former President Barack Obama.
"Scrapping Nafta would be a disastrously bad idea", Republican Senator Ben Sasse of Nebraska, who was a Trump critic during the campaign, said Wednesday in a statement.
Trump, who says NAFTA has been a disaster for American workers, has threatened several times to walk away from the three-nation pact unless major changes are made. 'Subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA.
White House officials told CBS News the order was being drafted by Peter Navarro, director of the National Trade Council, with help from chief strategist Steve Bannon, the economic nationalists among Mr. Trump's staff.
Analysts warned that US exporters could face high tariffs without NAFTA, because the USA exporters not only have gained greater tariff preferences under the deal, but also have been exempt from potential tariff hikes facing other exporters. But the announcement offers less populist punch than withdrawing from the agreement outright, a move that could cause major disruptions to the economies in Canada, the United States, and Mexico.
Still, about 14 million US jobs depend on trade with Mexico and Canada, according to the US Chamber of Commerce. He has long accused Mexico of destroying U.S.jobs.
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Details about the draft executive order on NAFTA were not immediately available.
Withdrawing from NAFTA would enable him to say he delivered on one of his key campaign promises, but it could also hurt him in states that voted for him in the election.
"Withdrawing from NAFTA would be disastrous for American agriculture".
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The source noted that the administration wanted to tread carefully.
He consistently cast the agreement - which was negotiated by President Bill Clinton, the husband of Trump's presidential opponent Hillary Clinton - as a raw deal for the middle class.
Mexico had expected to start NAFTA renegotiations in August but the possible executive order could add urgency to the timeline.
Trump recently ramped up his criticism of Canada and required a 20 percent tariff on imports of Canadian softwood lumber.
"The letter is fantastic", said Steve Ammerman, public affairs manager for the New York Farm Bureau.