Trump to renegotiate NAFTA with Canada, Mexico after considering withdrawal | Americas| North and South American news impacting on Europe | DW | 27.04.2017
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USA

Trump to renegotiate NAFTA with Canada, Mexico after considering withdrawal

US President Donald Trump had initially considered leaving the trade deal with an executive order. Earlier, Washington said it planned to investigate aluminum imports and their impact on national security.

US President Donald Trump announced Wednesday that he will work with Canada and Mexico to renegotiate the North American Free Trade Agreement (NAFTA) after considering leaving the trade agreement.

"President Trump agreed not to terminate NAFTA at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the NAFTA deal to the benefit of all three countries," read a White House statement.

Read: What does NAFTA mean to Mexico?

The White House said Trump spoke with Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau by phone on Wednesday and said he would not immediately terminate NAFTA after a "pleasant and productive" conversation. 

'Very upset with NAFTA'

Trump said in an interview with the AP news agency last week that he was "very upset with NAFTA," a trade deal that has been in effect since January 1994.

"I think NAFTA has been a catastrophic trade deal for the United States, trading agreement for the United States. It hurts us with Canada, and it hurts us with Mexico," said Trump in the interview.

In the White House statement released on Wednesday, Trump changed his tone.

"It is my privilege to bring NAFTA up to date through renegotiation. It is an honor to deal with both President Pena Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better," Trump was quoted in the statement.

Canada said it was ready for talks on NAFTA.

"At this moment NAFTA negotations have not started. Canada is ready to come to the table at any time," said Alex Lawrence, a spokesman for Canadian Foreign Minister Chrystia Freeland.

If Trump were to attempt to formally leave NAFTA, he is required to give six months notice before leaving the deal under Article 2205.

Read: NAFTA leaders target 50% renewable sources by 2025

Washington to investigate aluminum imports

Earlier Wednesday, US Commerce Secretary Wilbur Ross announced there would be an investigation into aluminum imports and their effect on US interests, including national security.

The announcement comes a week after the US launched a similar probe into steel imports.

The investigation into aluminum will be conducted under Section 232 of the Trade Expansion Act, a little-used law which allows the US to investigate the effects of imports on national security. It gives the president the power to restrict imports and impose tariffs if a US Commerce Department investigation determines there is a threat to national security.

"It's very, very dangerous, obviously from a national defense point of view, to only have one supplier of an absolutely critical material," said Ross during a White House briefing. He said the threat to national security stems from combat aircraft requiring high-purity aluminum that is produced by only one smelter: Century Aluminum Co.

"At the very same time that our military is needing more and more of the very high-quality aluminum, we're producing less and less of everything, and only have the one producer of aerospace-quality aluminum," he said.

Aluminum company stocks rose in anticipation of the investigation. Century Aluminum shares jumped up 8.7 percent and Kaiser shares increased 2.6 percent.

China in focus

The primary focus of the investigation is expected to be on China, which is also the focus of the investigation into steel. China has increased its aluminum production nearly 12-fold and increased its share of the world's aluminum market from less than 11 percent in 2000 to nearly 53 percent.

Aluminum production in the US fell 77 percent in the same time period. The US world aluminum market share dropped from 16 percent in 2000 to less than 2 percent in 2016.

Ross said imports from other countries, including Russia, were also a part of the problem.

"This is not a China-phobic program, this has to do with a global problem," said Ross.

kbd/cmk (AFP, AP, Reuters)

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