WASHINGTON — After reports circulated Wednesday that the Trump administration was drafting an executive order to back out of the North American Free Trade Agreement, President Trump was on the phone with his Canadian and Mexican counterparts that evening and pledged to keep NAFTA “at this time.”
Politico reported that the unveiling of the executive order, which was in the “final stages of review,” according to two White House officials, was expected within days and it had been drafted by Peter Navarro, head of Trump’s National Trade Council, “in close cooperation” with chief White House strategist Steve Bannon.
The buzz of such an order quickly raised alarm among some congressional Republicans, with Sen. John Cornyn (R-Texas) saying the administration told him there wouldn’t be a pullout and Sen. John McCain (R-Ariz.) calling such a move “disgraceful and a disaster.”
Asked about the report on Fox News Wednesday, White House chief of staff Reince Priebus noted Trump “is talking about renegotiating NAFTA — I’m not going to get ahead of ourselves on where we’re at on that.”
“There’s different legal hurdles that you have to satisfy before you actually either renegotiate or withdraw from NAFTA. So those legal hurdles are one thing, withdrawing actually is another thing. The withdrawal is a different issue. So we’re talking about steps prior to withdrawal that have to take place that the president has been talking about,” Priebus said.
The White House said in a late-night statement that Wednesday afternoon Trump spoke with President Enrique Peña Nieto and Prime Minister Justin Trudeau.
“Both conversations were pleasant and productive. President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries,” the readout said.
“President Trump said, ‘it is my privilege to bring NAFTA up to date through renegotiation. It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better.’”
It comes in the same week as the Trump administration slapped a 20 percent tariff on Canadian softwood lumber, with Commerce Secretary Wilbur Ross claiming that the move was unrelated to Trump’s complaints visiting Wisconsin last week that the Canadian dairy industry was being unfair to the state’s dairy farmers.
“There is roughly $15 billion worth of hardwood — softwood lumber used in houses in this country, and about 31.5 percent of that comes from the Canadians. So that’s roughly $5 billion a year; 20 percent tariff on that is essentially $1 billion a year. And the retrospective 90 day feature adds another $250 million to that on a one-time basis,” Ross told reporters at Tuesday’s White House briefings.
“Softwood lumber, as I say, is fundamentally used in single-family houses. We do not think that the price of lumber will go up by anything like the 20 percent, but there may be some small increase in the price of lumber for the house,” he added. “…This investigation had been under way before anything came up about milk. And on the statutory basis, the last day we could’ve released the findings would’ve been today. So the only thing that we did do was accelerate it one day.”
That evening, the White House released a brief statement indicating Trump and Trudeau had spoken by phone: “The two leaders discussed the dairy trade in Wisconsin, New York State, and various other places. They also discussed lumber coming into the United States. It was a very amicable call.”
The version of the call from Trudeau’s office: “The prime minister and the president reaffirmed the importance of the mutually beneficial Canada-U.S. trade relationship. On the issue of softwood lumber, the prime minister refuted the baseless allegations by the U.S. Department of Commerce and the decision to impose unfair duties” and “stressed that the government of Canada will vigorously defend the interests of the Canadian softwood lumber industry, as we have successfully done in all past lumber disputes with the U.S.”
“The prime minister and the president also discussed Canada-US trade in dairy products, trade which heavily favours the US: Canada imports over $550 million of dairy products from the US, but exports just over $110 million to the US,” the readout continued. “The prime minister reaffirmed that Canada upholds its international trade obligations, including the North American Free Trade Agreement, under which the US continues to have duty-free and quota-free access for milk protein substances … and that Canada would continue to defend its interests.”
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