Trump to start renegotiating NAFTA soon with Mexico, Canada

Updated 2017-01-23 13:55:35 Xinhua

U.S. President Donald Trump on Sunday reiterated his pledge to renegotiate the North American Free Trade Agreement (NAFTA) in upcoming talks with the leaders of Mexico and Canada.

"We're going to start some negotiations having to do with NAFTA," Trump said while addressing senior White House staff on his second full day in office.

Trump will receive his Mexican counterpart, Enrique Pena Nieto, on Jan. 31, and a meeting with Canadian Prime Minister Justin Trudeau is expected "soon," according to a readout from a call between the two leaders on Saturday.

Pena Nieto and Trudeau, in a phone conversation held Sunday, agreed to join forces to encourage economic integration in North America, according to a statement from the Mexican president's office.

Trump pledged during his presidential campaign that if elected he would renegotiate the 22-year-old trade deal to provide more favorable terms to the United States.

"President Trump is committed to renegotiating NAFTA. If our partners refuse a renegotiation that gives American workers a fair deal, then the president will give notice of the United States' intent to withdraw from NAFTA," reads Trump's America First Foreign Policy published on the website of the White House.

Since Trump's November victory, both Canada and Mexico have announced that they will sit down with the new U.S. administration to reexamine the free trade agreement.

Canada has said it expects to keep its 1989 bilateral free trade agreement with the United States if Trump withdraws from NAFTA.

Canadian Ambassador to the United States David MacNaughton said Sunday that Canada was not the focus of U.S. efforts to renegotiate NAFTA, suggesting that the Trump administration was more concerned about trade deficits with Mexico.

During a surprise trip to Mexico City to meet Pena Nieto in August, Trump said "I shared my strong view (with Pena Nieto) that NAFTA has been a far greater benefit to Mexico than it has been to the U.S., and that it must be improved to make sure that workers, so important, in both countries benefit from fair and reciprocal trade."

Mexico shuddered at the comment. The trade pact has helped Mexico channel 80 percent of exports to its neighbor, and an improvement Trump wants might mean huge losses for Mexico.

NAFTA, which took effect in 1994, created one of the world's largest free trade zones by reducing or eliminating tariffs on most products.

The pact was meant to benefit small businesses by lowering costs and reducing bureaucracy to facilitate buying and selling abroad. Whether it has ultimately helped or harmed Americans is hotly debated in the United States.

"In reality, NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters," the U.S. Congressional Research Service, which provides independent analysis, said in 2015.

"The net overall effect of NAFTA on the U.S. economy appears to have been relatively modest, primarily because trade with Canada and Mexico accounts for a small percentage of U.S. GDP," the think tank said.

Gustavo Vega, a professor at the Center for International Studies at the prestigious Colegio de Mexico, told Xinhua that he believes Trump's trade protectionism would harm U.S. economic interests that benefit from the integration of Mexican and U.S. businesses, especially in border states such as California.

He added that 600,000 jobs in those states depend on NAFTA. "It's very worrying. He doesn't realize he could create a truly serious situation."

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