Leaders in Mexico and Canada shrugged off President Donald Trump’s latest threat to pull the U.S. out of NAFTA, chalking up the tough talk to the president’s aggressive style of negotiation.
During a Tuesday night rally in Phoenix, Trump reiterated his promise to withdraw from NAFTA if the 23-year-old trade agreement isn’t renegotiated to his liking. (RELATED: Trump Renews Threat To Dismantle NAFTA At Phoenix Rally)
“Personally, I don’t think we can make a deal. I think we’ll probably end up terminating NAFTA at some point,” Trump said, adding, “I personally don’t think you can make a deal without a termination.”
Trump has long voiced his displeasure with NAFTA, a 1994 trade pact that governs well over a $1 trillion worth of two-way trade in U.S. goods and services. During the 2016 campaign, he blasted NAFTA as a bad deal for American workers, blaming it for an exodus of U.S. jobs to Mexico.
Trump’s latest denunciation of NAFTA came just days after the first round of talks to update the pact ended over the weekend without much progress. Further negotiations are scheduled for September in Mexico City.
Immediately following Trump’s speech, Mexican Foreign Minister Luis Videgaray dismissed the threat to terminate NAFTA, saying it was simply part of the negotiating process.
“No surprise: we’re in negotiations,” he said on Twitter. “Mexico will remain at the table with calmness, firmness and in the national interest going forward.”
A Canadian official made similar comments Thursday, telling Reuters that Trump’s comments didn’t come as a surprise.
This was always a card we knew the president would likely play … it may have been a bit earlier than expected,” the official said on the condition of anonymity. “It’s not going to cause us to waver at all in our position … (we) won’t really be deterred by these statements.
The public back-and-forth over the future of NAFTA highlights the difficulty of renegotiating a trade deal that touches virtually all of the cross-border commerce in one of the world’s largest trading blocs. Trade between the U.S., Canada and Mexico is governed by a complex set of regulations that have become standard practice over two decades, and many companies in the trading bloc are wary of a radical change in the rules.
Still, U.S. trade negotiators have indicated they have no intention of tinkering around the margins.
“I want to be clear that [President Trump] is not interested in a mere tweaking of a few provisions and a couple of updated chapters,” U.S. Trade Representative Robert Lighthizer said last week, according to CNN. “We feel that NAFTA has fundamentally failed many, many Americans and needs major improvement.”
A major sticking point for the Trump administration involves NAFTA’s so-called “rules of origin,” which mandate that a certain amount of the parts in a product must come from across North America.
To protect domestic manufacturers, trade negotiators want to raise the minimum requirements for the amount of parts sourced in North America and in the U.S.
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