Trump Hints Major Changes Are Coming to NAFTA

In a White House appearance with the Canadian prime minister, the president says U.S. workers will be his top priority

by Brendan Kirby | Updated 12 Oct 2017 at 6:17 AM

President Donald Trump on Wednesday gave NAFTA the “We’ll see” treatment in the White House, teasing major changes to the 23-year-old trade pact.

Trump often uses the phrase “We’ll see” before dropping the hammer on aides who fall out of favor. Speaking to reporters during a joint appearance with Canadian Prime Minster Justin Trudeau, Trump said he was interested in renegotiating the North America Free Trade Agreement.

"We'll see what happens," he said. "We have a tough negotiation, and it's something that you will know in the not-too-distant future. But we are going to be discussing NAFTA."

The Trump administration gave formal notice earlier this year that it intended to renegotiate the pact and released a set of goals over the summer. The president expressed confidence on Wednesday that an improved deal could be reached.

"I think we have a chance to do something that's very creative that's good for Canada, Mexico, and the United States," he said.

For his part, Trudeau was noncommittal, stressing the close relationship between the two countries.

"We have an incredibly close relationship, our two countries that are interwoven in our economies, in our cultures, and in our peoples," he said. "But we have a good partnership."

Trade was a core issue for Trump during the 2016 campaign and one of the policy areas that set him apart from his competitors in the large GOP primary field. One of his first acts as president was formally killing the proposed Trans-Pacific Partnership trade deal, which his predecessor had negotiated with 11 other countries.

NAFTA is exceedingly popular among business leaders throughout the continent. This week, 310 state and local chambers of commerce urged the Trump administration to stay in NAFTA, and U.S. Chamber of Commerce President Tom Donohue said the Chamber "has had no choice but ring the alarm bells," according to The New York Times.

But Trump insisted on Wednesday that nothing had changed in his approach.

"We're negotiating a NAFTA deal. It's time after all of these years," he said. "And we'll see what happens. It's possible we won't be able to make a deal. And it's possible that we will. We have a great personal relationship."

"Judging from what administration officials are saying on the record, they want to go far beyond a few tweaks."

Trump did say he was open to negotiating a bilateral deal with Canada if talks on the three-nation pact fail.

"They're going to do well, and we're going to do well," he said. "But it has to be fair to both countries."

Alan Tonelson, an economic policy analyst who writes the RealityChek blog, told LifeZette that Trump's comments align with signals the administration has been sending that it intends a major overhaul of NAFTA.

"Judging from what administration officials are saying on the record, they want to go far beyond a few tweaks," he said.

Tonelson said there is still a fair amount of uncertainty about the administration's specific position. The first question, he said, is what percentage of content in products must be North American in various industries. The Trump administration wants to increase the percentage that must be made in one of the three countries.

The second issue revolves around how high punitive tariffs will be, Tonelson said. He said raising the content standards will not mean much if companies do not have to pay a high price for evading them.

Tonelson said the third issue — which could cause Mexico and Canada the most heartache — is whether the United States sticks to indications that it will demand a future NAFTA to require at least half of North American products have U.S. content. This would prevent low-wage Mexico from reaping all of the benefits of increasing the North American content rules.

Trump reiterated that American workers are his top priority.

"We have to protect our workers, and in all fairness, the prime minister wants to protect Canada and his people, also … I've been opposed to NAFTA for a long time in terms of fairness of NAFTA," he said.

(photo credit, homepage image: Justin Trudeau, MP, cut-out, CC BY 2.0, by Alex Guibord / Donald Trump, cut-out, CC BY-SA 2.0, by Gage Skidmore; photo credit, article image: Women Deliver 2019 Conference Location Announcement, cut-out, CC BY 2.0, by Women Deliver)

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