US President Donald Trump on Wednesday told the leaders of Mexico and Canada that he would not immediately pull out of the North American Free Trade Agreement (NAFTA), just hours after officials in his administration said he was considering a draft executive order to do just that.
The White House made the surprise announcement in a read-out of calls between Trump, Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau.
“President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries,” the White House said.
Trump said he believes “the end result will make all three countries stronger and better.”
The Mexican government confirmed the conversation in a statement issued late on Wednesday.
Trudeau’s office issued a brief statement saying: “The two leaders continued their dialogue on Canada-US trade relations, with the prime minister reinforcing the importance of stability and job growth in our trade relations.”
The White House announcement came hours after US administration officials said Trump was considering a draft executive order to withdraw the US from the deal — though administration officials cautioned it was just one of a number of options being discussed by the president and his staff.
Some saw the threat as posturing by Trump to gain leverage over Mexico and Canada as he tries to negotiate changes to the deal. Trump railed against the decades-old trade deal during his campaign, describing it as a “disaster.”
Senior White House officials the past few days discussed 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, a person familiar with the president’s thinking said.
The administration on Wednesday appeared to be divided over how and when to proceed, as they balanced a newfound cautiousness with the desire to rack up accomplishments before Trump’s 100th day on the job.
Some were gunning for Trump to sign a draft order this week, while others were weighing the complications surrounding withdrawing from or renegotiating the deal without the US Congress fully on board.
Trump could withdraw from NAFTA, but he would have to give six months’ notice, and it is unclear what would happen next. The law Congress passed to enact the trade pact might remain in place, forcing Trump to wrangle with lawmakers and raising questions about the US president’s authority to raise tariffs on Mexican and Canadian imports.
The decision came days after the administration announced it would slap hefty tariffs on softwood lumber being imported from Canada. Trump has also been railing against changes in Canadian milk product pricing that he says are hurting the US dairy industry.
The Trump administration last month submitted a vague set of guidelines to the US Congress for renegotiating NAFTA, disappointing those who were expecting Trump to demand a major overhaul.
In an eight-page draft letter to Congress, Acting US Trade Representative Stephen Vaughn wrote that the administration intended to start talking with Mexico and Canada about making changes to the pact, which took effect in 1994.
The letter spelled out few details and stuck with broad principles, but it appeared to keep much of the existing agreement in place, including private tribunals that allow companies to challenge national laws on the grounds that they inhibit trade — a provision that critics say allows companies to get around environmental and labor laws.
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