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After Starting NAFTA Talks, Trump Says He May Terminate the Pact

President Trump told a rally in Phoenix that he may have to kill NAFTA in order to get better trade terms with Canada and Mexico. “Personally, I don’t think we can make a deal,” he said, days after the first round of negotiations for the new NAFTA. “I think we’ll end up probably terminating NAFTA at some point.”

Trump promised repeatedly during the 2016 election campaign to scrap the 1994 free trade agreement if he could not renegotiate its terms to better advantage. U.S. food and ag exports to Canada and Mexico have quadrupled under NAFTA, and U.S. farm groups have urged the administration to avoid any disruption in trade during the negotiations.

U.S. Trade Representative Robert Lighthizer called for “a major improvement” in the pact when talks opened a week ago. The main U.S. goals are the elimination of trade deficits and more manufacturing jobs. The second round of negotiations is scheduled for September 1–5 in Mexico, with Canada to host a third session at the end of September.

Agriculture Secretary Sonny Perdue is credited with helping to persuade Trump in April to renegotiate NAFTA rather than abandon it. To make his point, Perdue reportedly showed Trump a map of the U.S. with bright colors indicating regions that supported his election and would suffer if NAFTA were nixed. Rural America, where Trump rolled up a two-to-one vote margin, was prominently highlighted.

Hours before Trump spoke, Iowa Senator Charles Grassley told reporters the administration was pursuing an aggressive schedule in the talks and that the ideal outcome would be an early agreement on modernizing the 1994 pact. The U.S. will be so preoccupied with NAFTA that it could not conclude trade talks with other nations at the same time, he said.

“Ideally, the process will wrap up quickly,” Grassley said during a teleconference. “However, it’s more important to negotiate a good deal that sets a strong precedent for trade agreements that are going to be negotiated in the future.” As a practical matter, he said, if NAFTA negotiations slow down and become snarled in election-year politics, “it’s going to be difficult to get it done in 2018.” Mexico has presidential elections next July, and the U.S. holds congressional elections next November.

FERN’s Ag Insider. Produced by FERN
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