Published April 27, 2017
President Trump and the leaders of Mexico and Canada agreed Wednesday to renegotiate the North American Free Trade Agreement (NAFTA), the White House said – though Trump warned Thursday he’d be willing to “terminate” the pact if they can’t strike a “fair deal.”
"It is my privilege to bring NAFTA up to date through renegotiation," Trump said in a statement late Wednesday. "It is an honor to deal with both [Mexican] President [Enrique] Peña Nieto and [Canadian] Prime Minister [Justin] Trudeau, and I believe that the end result will make all three countries stronger and better."
The White House added that Trump "agreed not to terminate NAFTA at this time" and that all three leaders ""agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation" of the trade deal to "the benefit of all three countries."
But Trump tweeted early Thursday that his cooperation is contingent on a fair deal being reached.
"I received calls from the President of Mexico and the Prime Minister of Canada asking to renegotiate NAFTA rather than terminate. I agreed," he tweeted. "... subject to the fact that if we do not reach a fair deal for all, we will then terminate NAFTA. Relationships are good-deal very possible!"
The Mexican government confirmed the conversation in a statement issued late Wednesday.
"The leaders agreed on the convenience of maintaining the North American Free Trade Agreement and working together with Canada to carry out a successful renegotiation for the benefit of all three countries," the statement read.
Trump repeatedly railed against the two-decade-old trade agreement on the campaign trail, describing it repeatedly as a "disaster."
Earlier Wednesday, sources told Fox News that the White House had drafted a notification signaling the United States' intention to withdraw from NAFTA. The document would have given the leaders of Canada and Mexico six months' notice of the administration's intention to exit from the agreement.
On Monday, the administration announced it would slap hefty tariffs on softwood lumber being imported from Canada. Trump has also been railing against changes in Canadian milk product pricing that he says are hurting the American dairy industry.
Trump told The Associated Press in an interview last week that he plans to either renegotiate or terminate NAFTA, which he and other critics blame for wiping out U.S. manufacturing jobs because it allowed companies to move factories to Mexico to take advantage of low-wage labor.
"I am very upset with NAFTA. I think NAFTA has been a catastrophic trade deal for the United States, trading agreement for the United States. It hurts us with Canada, and it hurts us with Mexico," he said.
The Trump administration last month submitted a vague set of guidelines to Congress for renegotiating NAFTA, disappointing those who were expecting Trump to demand a major overhaul.
In an eight-page draft letter to Congress, acting U.S. Trade Representative Stephen Vaughn wrote that the administration intended to start talking with Mexico and Canada about making changes to the pact, which took effect in 1994.
The letter spelled out few details and stuck with broad principles. But it appeared to keep much of the existing agreement in place, including private tribunals that allow companies to challenge national laws on the grounds that they inhibit trade — a provision that critics say allows companies to get around environmental and labor laws.
Reports Wednesday of the possible move drew objections from some in Congress, including Sen. John McCain, R-Ariz.
"Withdrawing from #NAFTA would be a disaster for #Arizona jobs & economy," he tweeted. "@POTUS shouldn't abandon this vital trade agreement."
Fox News' John Roberts and The Associated Press contributed to this report.