Inside Donald Trump's sudden reversal on NAFTA

Posted April 29, 2017

By Riki Ozawa and Hiroshi Arimitsu / Yomiuri Shimbun Staff WritersThe leaders of the United States, Canada and Mexico on Wednesday agreed to proceed swiftly with procedures to renegotiate the North American Free Trade Agreement.

Speaking to reporters Thursday before a White House meeting with Argentine President Mauricio Macri, Trump said that he had been planning to "terminate NAFTA as of two or three days from now" but had been persuaded to reconsider, which he acknowledged "would be a pretty big, you know, shock to the system".

The Conservative MP, a vice-chairman of the Canada-United States Inter-Parliamentary Group, said the many years he and other Canadian politicians have spent building relationships with members of Congress contributed to Trump's reversal on scrapping NAFTA. "But we're going to give renegotiation a good strong show", Trump said.

"There's a point at which it is cheaper to import directly and forget about NAFTA", says William Reinsch, a trade expert at the Stimson Center, a Washington-based think tank.

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 Peña Nieto and Canadian Prime Minister Justin Trudeau.

"Trying to undo the integration NAFTA has brought is going to create problems for a lot of manufacturers", he said, since much of the goods we produce domestically include raw materials or components that come from our neighbors.

U.S. media reported on Wednesday that he was likely to give formal notice of pulling the United States out of NAFTA - and then came the White House announcement that the USA would renegotiate the agreement after all. Renegotiate it? As his Harvard-educated son-in-law, Jared Kushner, advised him, "Look, there's pluses and minuses to doing it", Kushner said he told the president, and "either way he would have ended up in a good place".

There is no good reason for President Donald Trump or any other senior American official to ping Canada. Shimp notes, though, that they'd already said they were willing to negotiate changes to NAFTA.

Senate confirmation of Robert Lighthizer as Trump's nominee for USA trade representative, who would lead the United States in NAFTA talks, has taken longer than anticipated.

As he reached his 99th day in office on Friday, Trump moved on from NAFTA to focus on gun rights.

Campaigning for the presidency previous year, Trump repeatedly assailed NAFTA, saying it was a bad deal for America. With hundreds of billions of dollars at stake, it's little wonder those countries' leaders pressed Trump not to abandon the trade agreement. They had not met each other previously. Researchers concluded the deal has had a minor impact on the USA economy.

Last week, Trump derided NAFTA during remarks in Wisconsin meant to highlight American manufacturing. "I think it was more of a benefit, but I do think there is room for improvement".

The New York Times recently quoted an unnamed senior administration official saying that Trump is likely to sign an executive action that would begin the process of withdrawing the U.S. from NAFTA. A new NAFTA negotiation might also be the opportunity finally to settle long-running, if mostly overblown, US lumber industry complaints over Canadian imports, which Mr. Trump has also embraced of late.

The former US secretary of Agriculture was referring to a recent decision by America's northern neighbor to change the way tariffs apply to milk products.