FLASHBACK: President Donald Trump said the United States would be ''tweaking'' its trade relationship with Canada, stopping short of calling for a major realignment in a development likely to please visiting Canadian Prime Minister Justin Trudeau. (Reuters)
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WASHINGTON – United States President Donald Trump told the leaders of Canada and Mexico on Wednesday that he will not terminate the NAFTA treaty at this stage, but will move quickly to begin renegotiating it with them, a White House statement said.
The announcement came after White House officials disclosed that Trump and his advisers had been considering issuing an executive order to withdraw the United States from the trade pact with Canada and Mexico, one of the world’s biggest trading blocs.
The White House said Trump spoke by telephone with Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau and that he would hold back from a speedy termination of NAFTA, in what was described as a “pleasant and productive” conversation.
“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,” a White House statement said.
“It is my privilege to bring NAFTA up to date through renegotiation. It is an honour 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,” Trump was quoted as saying in the statement.
The Mexican and Canadian currencies rebounded in Asian trading after Trump said the U.S. would stay in NAFTA for now. The U.S. dollar dropped 0.6 per cent on its Canadian counterpart and 1 per cent on the peso.
The White House had been considering an executive order exiting NAFTA as early as Trump’s 100th day in office on Saturday, but there was a split among his top advisers over whether to take the step.
During his election campaign Trump threatened to renegotiate NAFTA and in the past week complained bitterly about Canadian trade practices.
It was under an executive order signed by Trump on January 23 that the United States pulled out of the sweeping Trans-Pacific Partnership trade deal.
News of the potential presidential action to withdraw from NAFTA earlier drove the Mexican and Canadian currencies lower. (Reuters)