The U.S. Department of Agriculture’s Economic Research Service’s 2015 report, “NAFTA at 20: North America’s Free-Trade Area and Its Impact on Agriculture”, says U.S. corn exports to Mexico have more than quadrupled from the volume exported there from 1984 to 1993.
“He can do the same thing with his NAFTA order that he can do with his wall”, Vela said, alluding to a previous missive to Trump encouraging the future president to “take your border wall and shove it up your ass”.
Reuters reported soybeans, wheat and corn declined on Wednesday, with some blaming the downfall on jitters over the report that the White House is considering pulling out of NAFTA.
Earlier Wednesday, Politico reported that the White House was developing plans for Trump to sign an executive order that would put the US on a path to leaving NAFTA. He argued in favor of ripping up trade deals, said NAFTA was “the worst trade deal in the history of the country”, and called the Trans-Pacific Partnership, or TPP, “a rape of our country”.
As well, earlier in the week the U.S. slapped new tariffs on softwood lumber from its northern neighbour.
Trump had threatened to renegotiate the NAFTA pact during the election campaign as he said it had destroyed American jobs, although he has backed off tough action in trade since taking office in January.
Trump has criticized NAFTA, saying that it harms American businesses and workers.
NAFTA is an agreement signed by Canada, Mexico and the United States to create a trilateral trade bloc in North America.
The law Congress passed to enact the trade pact might remain in place, forcing Trump to wrangle with lawmakers and raising questions about the president’s authority to raise tariffs on Mexican and Canadian imports. He consistently cast the agreement – which was negotiated by President Bill Clinton, the husband of Trump’s presidential opponent Hillary Clinton – as a raw deal for the middle class. Jeff Flake said the move would be devastating.
“Getting a deal done by early 2018 or the end of this year was wishful thinking”, said Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics.
By signing an intent to renegotiate and an intent to withdraw, the White House could attempt to leverage new concessions from Mexico and Canada while still maintaining a credible threat to leave the agreement entirely. CNN says he might simply go ahead with renegotiations, as originally planned. Lighthizer did get approved by the Senate Finance Committee this week and a full vote could come within a few weeks. The order, though, could be used as a negotiating tactic with Mexico and Canada, the other NAFTA parties.
In recent weeks, U.S. president Donald Trump has increased his rhetoric a notch, against both Mexico and Canada.
The Mexican government has said it can’t conclude a NAFTA deal after the first quarter of next year.
“I think we’d better be careful about unintended consequences”, said Cornyn, according to Politico.