Wednesday's HOT MIC
President Trump is readying an executive order that would enable the US to pull out of the North American Free Trade Agreement (NAFTA).
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.
Generally speaking, I think the value of trade deals is overblown. NAFTA certainly had some intended and unintended consequences that have damaged some industries -- and boosted some others. If the president is using this executive order as a means to pressure Canada and Mexico, more power to him. But there's a chance that this will make our neighbors even more stubborn. Political leaders in both countries are democratically elected and appearing to cave in to President Trump's demands would not be popular.
It should be noted that the proximity to both Canada and Mexico means that no matter what happens with NAFTA, trade among the North American countries will continue. After all, these were our biggest trading partners before NAFTA and I suspect they would be in a world without the deal.