Canada, Mexico shrug off Trump’s latest NAFTA threat

Trump’s suggestion that he will ‘probably’ terminate NAFTA fails to draw much response in partner nations

In this April 21, 2008 file photo, national flags of the United States, Canada, and Mexico fly in the breeze in New Orleans. Negotiations start Wednesday for an update to the quarter-century-old North American Free Trade Agreement. THE CANADIAN PRESS/AP/Judi Bottoni

In this April 21, 2008 file photo, national flags of the United States, Canada, and Mexico fly in the breeze in New Orleans. Negotiations start Wednesday for an update to the quarter-century-old North American Free Trade Agreement. THE CANADIAN PRESS/AP/Judi Bottoni

WASHINGTON – Donald Trump’s sudden threat to blow up NAFTA less than a week into its renegotiation isn’t drawing much of a response from the other North American countries, which are downplaying his remarks.

Canada and Mexico say it’s a predictable event in the course of a trade negotiation.

“As we said last week, trade negotiations often have moments of heated rhetoric,” said Adam Austen, a spokesman for Foreign Affairs Minister Chrystia Freeland. “Our priorities remain the same and we will continue to work hard to modernize NAFTA, supporting millions of middle class jobs. …

“Canada’s economic ties with the United States are key to middle-class jobs and growth on both sides of the border. Nine million American jobs depend on trade and investment with Canada.”

MORE: Trump says he’ll ‘probably’ terminate NAFTA

The Mexican foreign minister described it as an obvious leverage play: “No surprise: we’re in a negotiation,” Luis Videgaray tweeted in response to Trump. “Mexico will remain at the table with calmness, firmness and in the national interest.”

This comes after the president told a partisan crowd at a rally that he doubts a deal is possible. Trump said he’ll try negotiating but will probably wind up killing NAFTA.

“Personally, I don’t think we can make a deal,” Trump told a campaign-style rally in Arizona on Tuesday night. “Because we have been so badly taken advantage of. They have made such great deals – both of the countries, but in particular Mexico – that I don’t think we can make a deal.

“So I think we’ll end up probably terminating NAFTA at some point.”

He repeated it: “I told you from the first day, we will renegotiate NAFTA or we will terminate NAFTA. I personally don’t think you can make a deal without termination, but we’ll see what happens. You’re in good hands, I can tell you.”

The president’s threat itself is no surprise. A common topic of hallway chatter at last week’s first round of talks last week was just when he might deploy that withdrawal threat, which many view as his principal source of negotiating leverage.

The only surprise is how quickly it came.

MORE: ‘Great deal’ of work still to go as first round of NAFTA talks end

While he’s made the threat numerous times, this is the first time he’s done it since Canada, the U.S. and Mexico began talks last week.

Insiders say they expect him to keep making these threats.

It’s his main source of power to force the other countries to reach an agreement. One well-connected Washington lobbyist at last week’s talks said he was convinced the threat was coming: “Almost 100 per cent.”

Robery Holleyman, former deputy trade czar under Barack Obama, said it’s an obvious move and he thinks the president made it too early. In an interview several weeks ago, Holleyman said it was a serious tactical error when Trump made the threat in April.

He said Canada and Mexico gained valuable insight that will render Trump’s threats less powerful at the negotiating table. In April, the U.S. Congress pushed back against him, the business community fumed and his own cabinet members pleaded against it.

”It was, at a minimum, terrible timing,” said Holleyman.

”You do that at the 11th hour in the negotiation – that episode in April underscored the complexity of ending NAFTA.“

A president might withdraw the U.S. from the international agreement without the support of Congress, but he could not single-handedly wave away the U.S. law that implemented NAFTA.

RELATED: NAFTA: Is Chapter 19 worth fighting for?

An international economic law professor and former State Department lawyer said he believes it would ultimately end up in court. And he said U.S. courts would ultimately conclude that the president can’t rip up NAFTA without congressional support.

That’s because the president can’t just erase the 1994 NAFTA Implementation Act passed by Congress. In addition, the U.S. Constitution makes clear that Congress has power over international commerce.

“If the president were to rip up NAFTA and then sort of jack tariffs way up, I think somebody would be able to come in and say … ‘You’re actually violating U.S. domestic law’,” said Tim Meyer, a Vanderbilt professor, former government lawyer and one-time clerk for Neil Gorsuch, whom Trump appointed to the Supreme Court.

“I think courts are going to be sympathetic to the idea that the president can’t ignore the legislation that implements these trade agreements. Congress has not repealed that legislation and they’ve given no indication they intend to.”

Several observers suggest a presidential attempt to withdraw could set up a legal and political tug of war with Congress over the setting of new tariff schedules – and that would foster economic uncertainty.


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