White House considers pulling the US out of NAFTA
Posted April 26, 2017 11:25 am.
This article is more than 5 years old.
WASHINGTON, DC. (NEWS 1130) – The White House is telling US media that it’s weighing a plan to pull out of NAFTA, upping the pressure on Congress to get cracking on negotiations under the threat of having the pact obliterated.
Various media say Trump is considering detonating the trade equivalent of a nuclear option: an executive order to withdraw from the trade agreement with Canada and Mexico, a prospect that would terrify industry and business-friendly lawmakers.
These reports also say Trump hasn’t decided what to do yet, while others claim he may just be using this as a threat.
There could be major impacts for the Canadian economy if there is a major change to NAFTA. Trump has recently been targeting Canada by placing new tariffs on softwood lumber and slamming our dairy sector. Some economists have feared those moves were just the tip of the iceberg.
Politico reports Trump is looking at an executive order drafted by aides Steve Bannon and economic assistant Peter Navarro.
The White House has expressed frustration lately at the go-slow attitude of Congress: it has yet to confirm his trade czar or approve a 90-day notice to start NAFTA talks. The administration says it will be hard to get a deal as the Mexican election approaches.
The Mexican government says it can’t conclude a NAFTA deal after the first quarter of next year. Trump’s point man on the negotiation, Commerce Secretary Wilbur Ross, has acknowledged that it gets harder if talks linger too much into next year.
Mexico has an election in July 2018. Then there’s a five-month lame-duck period in Mexico. And in the midst of all that, US lawmakers will be embroiled in their own midterm elections, complicating the task of trade-related trade-offs.
By law, Congress must be consulted on negotiations, then vote to ratify a deal. ”It’s been frustratingly slow,” Ross said earlier this month, of Congress. ”They’ve been very, very slow on completing the hearings and voting on our new US trade representative Bob Lighthizer. That’s been not helpful.”
