The White house has confirmed that the United States is considering pulling out of the North American Free Trade Agreement (NAFTA).
U.S. President Donald Trump was vocally critical of the trade agreement throughout his presidential campaign and since coming to office in January has often pledged to renegotiate the seminal trade agreement altogether.
While Trump is considering an executive order to carry out this plan, reports from the Canadian Press indicate that Trump hasn’t yet decided what to do.
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Politico first reported this story Wednesday morning, stating that Trump is looking to an executive order drafted by Steve Bannon and economic assistant Peter Navarro, though it’s unclear whether Trump’s statements on doing away with NAFTA are to be taken seriously, or if they’re simply a threat.
“NAFTA’s been very bad for our country. It’s been very bad for our workers, and we’re going to make some very big changes or we are going to get rid of NAFTA once and for all,” Trump said in a speech in Kenosha, Wisconsin.
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Amid anticipation of the news Wednesday, Mexican and Canadian stocks and currencies fell dramatically. The Toronto Stock Exchange’s S&P/TSX index was down by 0.11 per cent and Mexico’s IPC fell 1.17 per cent after reaching an earlier record high.
The Canadian dollar weakened by 0.29 per cent against the United States currency as the Mexican peso reached its weakest point in six weeks. The White House has yet to approve the 90-day notice to start trade talks, though the administration says it will be harder to negotiate a deal as the Mexican election draws closer.
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Trump is racing against the clock on NAFTA, as the year ahead will see Mexico’s national election in June 2018, preceded by a five-month lame-duck period, as well as midterm elections for lawmakers in the United States.
A spokesperson for Canada’s Foreign Minister Chrystia Freedland told Reuters that “NAFTA negotiations have not started. Canada is ready to come to the table anytime.”
(With files from the Canadian Press and Reuters.)
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