Amid rising trade tensions, the Trump Administration is reportedly considering an executive order on withdrawing the United States from the North American Free Trade Agreement (NAFTA).
The order itself would not withdraw the United States from NAFTA. Instead, it would show their intent to withdraw. Under the agreement, signatories must give warning of their intention to leave the agreement, which the executive order would do.
While the order would be widely seen as a negotiating tactic as NAFTA re-negotiation gets underway, the process for US withdrawal from the trade pact would begin for real. That means any failure in negotiations could easily lead to the end of NAFTA.
Bannon & Navarro behind new order
According to Politico, Steve Bannon and Peter Navarro – both part of the “economic nationalist” wing of the White House – are said to be behind the executive order.
Trump faces increasing pressure to renegotiate NAFTA and get terms that are considered better for the United States. Trump’s victory in the electoral college was owed to support from American workers in Ohio, Michigan, Wisconsin, and Pennsylvania. For him to maintain that support, he needs to show results on the economy, and that political pressure could make trade tensions even worse.
Trump has been increasingly critical regarding the status of free trade in North America in the past few days. In a Wisconsin speech he said “NAFTA’s been very, very bad for our country. 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.”
Trump has already removed the United States from the Trans-Pacific Partnership, and has expressed a negative opinion on multi-lateral trade deals, preferring one-one-one deals instead.