Trump to give NAFTA talks a 'good, strong shot' after Trudeau warns of withdrawal risks

One day after the White House floated a trial balloon about draftingan executive order to withdraw from the North American Free Trade Agreement, U.S. President Donald Trump now says he's fully committed to reworking the deal.

At an event in the Oval Office on Thursday morning, Trump explained his decision not to proceed with the order by saying that to pull out ofNAFTA would be "a pretty big, you know, shock to the system."

"Now, if I'm unable to make a fair deal meaning a fair deal for our workers and our companies, I will terminate NAFTA. But we're going to give renegotiation a good, strong shot," he said.

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Media reports about awithdrawal appearedWednesday morning. By the end of the day, Trump had engaged in phone talks with Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto.

At a farm event in Gray, Sask., on Thursday morning, TrudeausaidTrump had been thinking about cancellingthe deal.

"I highlighted that, quite frankly, that whether or not there was a better deal to come, there were an awful lot of jobs, an awful lot of industries right now that have been developed under the NAFTA context.

"Disruption like cancelling NAFTA, even if theoretically [it]eventually might lead to better outcomes, would cause a lot of short-and medium-term pain for a lot of families," Trudeau said, addingboth leaders were elected on platforms ofhelping, not hurting.

Trudeau says he convinced Trump not to cancel NAFTA

7 years ago

Duration 1:37

PM Justin Trudeau reacts to a tweet from U.S. President Donald Trump saying he was going to terminate NAFTA in just a few days but was convinced by Trudeau and Mexican President Pea Nieto to try and renegotiate instead.

Legal debates continue over whether the U.S. president couldend the free trade deal without congressional approval.

"NAFTA was implemented through domestic legislation. The president can't repeal that," said Simon Lester, a trade policy analyst with the Cato Institute in Washington,a policy think-tank that advocates for free markets."This would definitely be pushing the boundaries there would be some pushback."

Prominent Republicans, includingSenator John McCain, immediately objected.

"It can't be good for his agenda. It just can't be," Lester said. "He's going to really aggravate people he needs for really important domestic priorities and other foreign policy priorities."

Lester said Canada and Mexico may wonder why they should come to the table with a withdrawal order hanging over negotiators' heads.

"If you're really contemplating withdrawal and ending NAFTA, what's the point of this? You're going to be asking [Canada and Mexico] to concede on things that [they]can't possibly concede on, so you're not even taking it seriously."

Trial balloon popped

Unnamed White House aides had, according to U.S. reports, drafted an executive order for Trump to sign. But reports also said the president hadnot decided what to do.

Attacking NAFTA's perceived failures is a familiar tune in the Trump hymn book. But the withdrawal threatwas usually mentioned as something Trumpwould do if renegotiations weren't satisfactory.

Suddenly headlines suggesteda withdrawal order would precede negotiations.

Trump decided to not cancel NAFTA after talking to Canada/Mexico

7 years ago

Duration 1:29

U.S president pulls back after calls from Canadian PM Justin Trudeau and Mexican President Enrique Pea Nieto: 'I like those guys'.

"You can imagine that someone in the Trump administration would think that this gives them negotiating leverage so this is a good idea," Lester said.

"I can imagine that foreign government officials would see through all this and not be intimidated."

The White House had a busy dayWednesday, with its new tax plan and a special briefing for senators on North Korea also capturing headlines.The House intelligence committee has also set its witness list for its probe into ties between Russia and the Trump administration.

Less discussed amid the fray were other significant trade stories.

The Americanslosta World Trade Organization ruling that allowsMexico to levy sanctions until the U.S. stops requiringdolphin-safe labelling ontuna imports.

The Trump administration alsolaunched a controversial investigation intowhether Chinese aluminum imports threaten national security.

In the case of the latter, Lester said he wonders whether sometimes the Trump administration throws out radical ideas"to make the less radical, but still problematic ones, more acceptable."

Lester said drafting anexecutive order could look like the White House hasdone something on NAFTAafter100 days in office, even though Trump's trade representative still isn't confirmed and no scope's been set for the renegotiation.

Earlier Wednesday, Foreign Affairs MinisterChrystiaFreelandtold reporters they shouldbear in mind thatNAFTAnegotiations have not started.

"Canada is ready to come to the table at any time," she said.

'Relationships are good'

The call with Canada came first, late in the afternoon. Canadiansknew that Trump would speak with PenaNieto after.

Trudeau's call was characterized by a government sourceas partly an effort to ask for clarification after the news reports, and partly an attempt to help Trump help himself by reiterating messages previously shared with the Americans about the mutual economic destruction that would result from rash or politically motivated decision-making.

Late Wednesday evening, a White House statement said conversations with both Trudeau and Mexico's presidentwere "pleasant and productive," and the three would proceed swiftly towardthe renegotiation.

Trump said it was his "privilege" to updateNAFTA and an "honour" to deal with the other two.

His tweetsThursday, however, made it seem like the other two leaders came to him asking himnot to terminate, and he consented.

Far from being on the verge of a trade war, as some had speculated afternew softwood lumber duties Tuesday andattacks on Canada's dairy industry last week, "relationships are good," he wrote, "deal very possible!"

A Canadianofficial said they're getting used to Trump's posturing,and the U.S. president is free to portray thingsas he will.

Trudeau told reportersThursdaythat he was always going to defend Canada's interests without confrontation, but in a "firm but responsible and polite way."

Trudeaualso spoke with the Mexican president onThursday. According to a readout of that call provided by the Prime Minister'sOffice, bothleaders welcomed Trump's apparent willingness to renegotiatethe trade pact rather than scrap it.

"Both recognized the importance ofNAFTAas a vehicle for growth in North America and looked forward to the ongoing partnership of our two countries," the statement said.

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