President Donald Trump wants to end the three-party talks to renegotiate the North American Free Trade Agreement, aiming instead to deal separately with Canada and Mexico to restructure the trade accord, a senior adviser said Tuesday.
Trump does not intend to withdraw from NAFTA, National Economic Council Director Larry Kudlow said on Fox News. But after more than one year of multilateral discussions, he feels the current approach hasn’t been fruitful and a new one is needed, Kudlow said.
“His preference now – and he asked me to convey this – is to actually negotiate with Mexico and Canada separately,” Kudlow said. “He prefers bilateral negotiations.”
It wasn’t immediately clear how such an arrangement would work. The United States, Mexico and Canada agreed to NAFTA in the 1990s, and all three countries have worked to renegotiate the deal since Trump became president. Changes would have to be agreed to by all sides.
But officials from the three countries have been unable to find consensus on several critical issues, leading to angry finger-pointing between Trump and Canadian Prime Minister Justin Trudeau in recent days. Trump has accused Canada of ripping off the United States through unfair trade practices, and Canadian officials have said Trump is using inaccurate information to attack a U.S. ally.
“When you have to compromise with a whole bunch of countries, you get the worst of the deals,” Kudlow said. “Why not get the best? . . . Canada is a whole lot different from Mexico.”
Trump is trying to use the threat of tariffs on steel and aluminum imports, as well as other goods, to force numerous countries to agree to trade concessions. He’s in standoffs with Mexico, Canada, China, Japan and members of the European Union, a collection of countries that includes many of the world’s largest economies and the largest U.S. trading partners. The talks all appear to be moving slowly or stalling, leading to angst on Capitol Hill and among business leaders.
Kudlow said he briefed a senior Canadian official on Trump’s new idea Monday and was still waiting for a response. Trump and Kudlow are traveling to Quebec later this week for a meeting of leaders from seven of the world’s leading economies, and several of those officials have expressed frustration at Trump for his protectionist approach to trade.
“NAFTA has kind of dragged on,” Kudlow said of the negotiations. “The president is not going to leave NAFTA. He is not going to withdraw from NAFTA. He’s just going to try a different approach.”
A Canadian government official, speaking on condition of anonymity to discuss diplomatic relations, said there have long been one-on-one talks as part of the NAFTA negotiations, but noted that the trade pact is a three-country agreement and any resolution would require all three countries to sign on together.