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Trump seems to be trying to break up NAFTA

A possibly unscripted February 13 remark by Donald Trump might indicate he wants to break up NAFTA, not merely renegotiate it.

At a press conference for the Washington visit of Canadian Prime Minister Justin Trudeau, Trump stressed that, in renegotiating NAFTA, he intended only to “tweak” America’s deal with Canada. ”

“We have a very outstanding trade relationship with Canada,” Trump said. “It’s a much less severe situation than what’s taking place on the southern border. On the southern border, for many, many years the transaction was not fair to the United States.”

No doubt his comment was an accurate summary of his and his advisors’ views about trade relations with Canada. But NAFTA is not a free trade deal between the US and Canada: it is a three-way deal between the US, Canada and Mexico in which each treats the other two equally. Though the fine print of NAFTA has many special provisions, it is simply not possible for the US, say, to double duty on Mexican imports, but not on Canadian. If that is what the US wants to do, it needs to scrap NAFTA and agree new, individual, deals with Canada and Mexico separately – a process likely to take a great deal longer than the simple doubling of duty or change in Rules of Origin implied in Trump’s speeches so far.

Abolishing NAFTA would, of course, be in line with the antipathy of Trump and his team to multi-member trade deals, which they believe allow all the non-American members to gang up on the US.

Paradoxically, of course, most of America’s partners believe precisely, the opposite.

Whether or not Trump meant precisely what he said, his words will increase pressure from Congress for a clear set of objectives it can approve before the renegotiaton can be accepted for later approval under the fast-track Trade Promotion Act