White House Is Said to Draft Plan for U.S. Break From Nafta

2017-04-26 18:55:02

 

White House Is Said to Draft Plan for U.S. Break From Nafta

WASHINGTON — President Trump is likely to sign an executive order formally withdrawing the United States from the North American Free Trade Agreement, according to a senior administration official, a move that would set the stage for renegotiating the deal with Canada and Mexico and fulfill one of Mr. Trump’s major campaign promises.

In recent days, the White House has announced that it will impose tariffs on Canadian lumber and asserted that Canada has treated the American dairy industry unfairly.

It was not clear what the language of the executive order would be, or what steps would come next. But an executive order could start a required six-month notification period for withdrawal, during which time talks on renegotiation could be pursued.

The accord, which came into force in 1994, vastly redefined the trade relationships among the three countries, dropping or phasing out tariffs on a vast array of goods. It reshaped the auto industry in particular, with American automakers increasingly turning to Mexico for parts and assembly.

During his presidential campaign, Mr. Trump called Nafta “the worst trade deal” the United States had ever signed.

Last month, however, he was reported to be leaning against withdrawing from the agreement, and instead seeking to renegotiate it. In a draft letter circulated among members of Congress, the administration proposed adding a provision to allow tariffs to be reinstated if a flood of imports threatened to harm a domestic industry.

According to the draft letter, signed by Stephen P. Vaughn, the acting United States trade representative. Mr. Trump wanted to adjust the agreement’s rules of origin, or how much of a product must be made in a Nafta country, and wanted Nafta partners to expand the market for United States-made goods in their government procurement.

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