The North American Free Trade Agreement (NAFTA) could be on the chopping block on President-elect Donald Trump‘s first day in office, according to a new report.
A leaked memo obtained by CNN suggests Trump would begin reshaping the trade policy on Day 1 of his administration. The document, which reportedly lays out plans for the first 200 days of the Trump administration, shows that renegotiating or withdrawing from NAFTA altogether is at the top of Trump’s to-do list.
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According to CNN’s report, Trump will also explore stopping the Trans-Pacific Partnership deal, “unfair imports” and “unfair trade practices,” in addition to “pursuing bilateral trade deals.”
“The Trump trade plan breaks with the globalist wings of both the Republican and Democratic parties,” the memo reportedly states. “The Trump administration will reverse decades of conciliatory trade policy. New trade agreements will be negotiated that provide for the interests of US workers and companies first.”
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The memo suggests Trump would launch a study into the consequences of withdrawing from NAFTA starting on Day 1 and would consider a formal withdrawal from the agreement by 2020.
President Bill Clinton signed the free trade agreement between Canada, Mexico and the United States into law in 1993. Trump has said he wants to get a “better deal” from Mexico and Canada, calling it “the worst trade deal maybe ever signed, anywhere” during one of the presidential debates.
Global News has not independently verified CNN’s report on the memo.
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On Tuesday, Finance Minister Bill Morneau said Canada aims to hold bilateral and trilateral talks with the United States and Mexico over their trade agreements.
“We have an enormous stake in the success of our relationship with the U.S. and with Mexico: our supply chains are intertwined, we’ve developed a very successful economic unit over the course of the last twenty years,” Morneau said at the London School of Economics.
“We will work with the U.S., and this would go with any administration,” he said. “We expect Mexico will be part of that discussion.”
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Both governments have said they are ready to sit down with Trump to discuss NAFTA, its merits and possible ways to modernize it – without renegotiating it entirely.
The United States, Canada, and Mexico have adjusted NAFTA multiple over the years including in 2001, 2004, and 2009 to change the dispute-settlement process, to allow for easier entry for some workers, and to liberalize rules of origin, respectively.
Exports account for about a third of Canada’s GDP. Of these, about three-quarters go to the United States and many Canadian companies are dependent on American imports. A recent study by Export Development Canada estimates exports to the United States could drop by as much as 5 per cent if a 10 per cent tariff were imposed.
– With files from Reuters and The Associated Press