White House Considers Formal Threat to Withdraw From Nafta -- Update

By Jacob M. Schlesinger and Peter Nicholas Features Dow Jones Newswires

The Trump administration is debating whether to issue a formal threat to withdraw from the North American Free Trade Agreement, as part of its strategy to renegotiate the 23-year-old pact with Mexico and Canada, according to White House officials.

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It is unclear whether President Donald Trump will take the dramatic step of issuing a Nafta withdrawal notice -- and even if he does, whether he would actually follow up by pulling the U.S. out of agreement. The pact requires any party to give six months' notice for withdrawing.

But two people familiar with White House deliberations said the option would be discussed at a meeting Wednesday of the National Economic Council.

The White House "is taking a look at all options," said one of these people. The person noted that Mr. Trump regularly attacked Nafta as "a disaster" on the campaign trail, and has continued to do so in the early days of his administration.

As his presidency nears the 100-day mark this Saturday, the White House is scrambling to show that Mr. Trump has moved to meet many of his campaign promises, including reorienting U.S. trade policy.

A Nafta overhaul "is a major campaign pledge of the president and he's spoken about it throughout the first 100 days," this person said.

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The internal discussion, first reported Wednesday morning by Politico, touched off a swift backlash from American business groups and members of Congress, rallying to try to quell the prospect before it gains traction inside the White House.

The mere speculation of a Nafta pullout jolted financial markets, with the Mexican peso falling 1.7% to its biggest daily loss since January. The Canadian dollar, which has been battered by trade tensions with the U.S. this week, also edged 0.3% lower.

Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com and Peter Nicholas at peter.nicholas@wsj.com

(END) Dow Jones Newswires

April 26, 2017 17:48 ET (21:48 GMT)