BREAKING NEWS: Trump Will Renegotiate - Not Dump - NAFTA - Global Trade Magazine
  April 27th, 2017 | Written by

BREAKING NEWS: Trump Will Renegotiate – Not Dump – NAFTA

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  • Trump tweets: US won't withdraw from NAFTA.
  • Canada and Mexico had already agreed in principle to negotiate amendments to NAFTA.
  • Dozens of tweaks to NAFTA have been negotiated since 1994.

Hours after the White House signaled that President Donald Trump was considering an executive order which would withdraw the United States from the North American Free Trade Agreement, the president tweeted that he would renegotiate, not withdraw.

Yesterday, The New York Times and other news outlets reported that a draft executive order dumping NAFTA was circulating in the White House. Some thought that news came to create leverage against Canada and Mexico to bring them to the bargaining table. On the face of it the move seemed to have worked brilliantly, except for the fact that the leaders of Canada and Mexico had already agreed in principle to negotiate amendments to the accord. By the way, a couple of dozen tweaks to the agreement have been negotiated since NAFTA first came into force in 1994.

A better explanation for the turnabout has to do with internal White House politics. The executive order dumping NAFTA was drafted and circulated by presidential advisor Stephen Bannon and Peter Navarro, an economist and head of the White House’s National Trade Council, both known as economic nationalists who want to extricate the US from multilateral trade agreements.

But Gary Cohn, chief of the National Economic Council, advised caution and his view seems to have prevailed.

If this all sounds familiar, it’s because the scenario has played out before on infrastructure. Navarro and his team put together a list in the very first days of the administration of 50 high-priority  projects that could count as quick wins. Cohn and is crew had different ideas. They are gathering infrastructure ideas from 16 federal agencies and all 50 states, a process that will take months to complete.

The good news is that in both situations, cooler heads prevailed. But the whiplash-inducing shifts in policy don’t enhance the administration’s credibility at home or overseas.