The Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials.
A draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration’s intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.
The approach appears designed to extract better terms with Canada and Mexico. President Donald Trump pledged on the campaign trail to renegotiate NAFTA, a trade deal signed in 1994 by former President Bill Clinton that removes tariffs and allows for the free flow of goods and services between the three countries in North America. Trump in recent weeks has stepped up his rhetoric vowing to terminate the agreement altogether.
“NAFTA’s been very, very bad for our country,” he said in a speech last week in Kenosha, Wisconsin. “It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes or we are going to get rid of NAFTA once and for all.”
Peter Navarro, the head of Trump’s National Trade Council, drafted the executive order in close cooperation with White House chief strategist Steve Bannon. The executive order was submitted this week to the staff secretary for the final stages of review, according to one of the White House officials.
The draft executive order could be a hardball negotiating tactic designed to bring Mexico and Canada to the table to renegotiate NAFTA. But once Trump sets the withdrawal process in motion, the prospects for the U.S. pulling out of one of the largest trade deals on the globe become very real.
During his first days in office, Trump signed an executive order withdrawing the U.S. from the Trans-Pacific Partnership trade deal, a sweeping 12-nation pact that was in the final stages of approval.
As part his “America First” approach, Trump promised to renegotiate multilateral trade deals including NAFTA, which he called a “job killer” and the “single worst trade deal ever.“ He has pledged that he will focus on bilateral deals that are more favorable to the United States.
Earlier this week, the U.S. imposed a new tariff on softwood lumber coming from Canada. The relationship between Canada and the U.S. has been tense in recent weeks since Canada lowered it’s pricing on domestic milk, creating more competition for American dairy farmers.
The United States’ relationship with Mexico has been fraught with more tension since the president has pledged to build a border wall that he claims Mexico will pay for.
Some internally see the drafting of the executive order as a win for the “nationalist” faction within the White House led by Bannon, who has been sidelined in recent weeks since he was removed from the National Security Council.
A White House spokesperson did not respond to a request for comment.