President Donald Trump on Wednesday said that terminating the North American
Free Trade Agreement would result in the "best deal" to revamp the
24-year-old trade pact with Canada and Mexico in favor of U.S. interests.
However, lawmakers as well as agricultural and industrial groups have warned
Trump not to quit NAFTA.
"We're renegotiating NAFTA now. We'll see what happens. I may terminate
NAFTA," Trump said in an interview with Reuters.
Trump's comments come less than a week before trade negotiators from the United
States, Canada and Mexico meet in Montreal for the sixth of seven scheduled
rounds of negotiations to update NAFTA.
The talks are viewed as pivotal for the success of the NAFTA renegotiation
effort because major differences remain over aggressive U.S. demands on autos,
dispute settlement and a five-year sunset clause -- proposals that some
business groups have labeled "fatal."
Trump discussed NAFTA and other trade issues last weekend in Florida with U.S.
Trade Representative Robert Lighthizer, who is leading the U.S. negotiating
strategy.
Trump's comments appeared to validate concerns voiced last week by Canadian
government sources that the U.S. president, now a year in office, looked
increasingly likely to announce a pullout from NAFTA..
Canadian Foreign Minister Chrystia Freeland added that U.S. threats to quit NAFTA
had to be taken seriously.
The Reuters interview with Trump also reversed gains on Wednesday in Mexico's
peso, which has been highly sensitive to NAFTA withdrawal talk.
But Trump told the Wall Street Journal last week that he would be "a
little bit flexible" on the withdrawal threat.
Farm state lawmakers have been making the case to Trump in recent weeks that a
NAFTA withdrawal could cause a major tariff increase on U.S. corn and other
crops sold to Mexico, hurting a major political support base for Trump in the
rural United States.