President Donald Trump is privately discussing the possibility of withdrawing from the U.S.-Mexico-Canada Agreement, Bloomberg reported Wednesday, citing officials familiar with the matter, a move that could inject fresh uncertainty into upcoming renegotiations of the trilateral trade deal.
Officials who spoke to the news organization on condition of anonymity about the internal discussions said the president has asked aides why he should not renounce the pact he made during his first term, but he has stopped short of signaling he would do so.
When questioned about the talks, a White House official characterized Trump as the final arbiter and someone who is constantly looking for a better bargain for the American people. Any discussion of possible action before the president made an announcement was nothing more than unfounded conjecture, according to the official.
A representative in U.S. Trade Representative Jamieson Greer's office said the administration planned to keep Trump's options open and engage in negotiations to resolve identified flaws, saying that approving the 2019 terms was not in the best interests of the country.
Speaking on condition of anonymity, both officials refrained from openly addressing whether Trump was considering leaving the trade agreement. Greer stated Tuesday that the administration would have separate discussions with Canada and Mexico, citing the more tense trade relations with Canada. He made no mention of Trump's approval of an extension.
The USMCA took the place of the North American Free Trade Agreement (NAFTA), which governed commerce between the three nations since 1994 but was criticized by Trump during his initial presidential campaign. Trump vowed to withdraw from NAFTA before accepting the revised agreement, which included a sunset clause that required a renegotiation this summer and tighter regulations and increased U.S. car content standards.
On July 1, the USMCA will undergo a mandated review prior to a potential extension. The procedure, which was first anticipated to be routine, has turned into a heated negotiation. Trump has put pressure on Ottawa and Mexico City to address unrelated matters like defense, migration and drug trafficking, in addition to demanding additional trade concessions.
Stricter rules of origin for important industrial goods, improved cooperation on crucial minerals, worker safeguards and dumping are all areas of potential concern, an official stated, adding that Greer will suggest a renewal if a settlement integrating input from industry stakeholders can be reached.
The agreement would be in effect for an additional 16 years if the nations consented to a renewal. But if that does not occur, it can lead to yearly reviews for 10 years, until the agreement expires in 2036. Any nation could give six months' notice before announcing its intention to leave.
The treaty covers almost $2 trillion in products and services, so such a move would rock the foundations of one of the biggest economic relationships in the world. Even the prospect of a U.S. withdrawal would make investors and world leaders more uneasy.
