Stoking up his base at a campaign-style rally in Phoenix, Arizona – while also stroking his own ego – U.S. President Donald Trump apologized Monday for taking so long to renegotiate the North American Free Trade Agreement (Nafta) and made another threat to withdraw from the trilateral trade deal.
“We’ll end up probably terminating Nafta at some point,” were the words he threw out as bait to his adoring audience, adding, “probably.”
Formal talks between the three partners had only started five days earlier in Washington D.C. and the comments were presumably greeted by negotiators with bemused smiles, but, unlike some unscripted Trump pronouncements of late, his bombastic rhetoric is unlikely to have any long-lasting negative consequences.
Although Trump’s comments briefly caused the peso to wobble, Mexico’s Foreign Minister Luis Videgaray dismissed the remarks, preferring instead to stress his commitment to concluding successful negotiations while preserving Mexico’s national interests.
The president’s threat to dump Nafta surprised some U.S. officials, who believed Trump had seen the light after taking office in January, realizing that pulling out of Nafta would seriously harm important segments of the U.S. economy, in particular the agricultural sector.
A day after Trump delivered his controversial comments, Mexican Finance Minister Ildefonso Guajardo announced that Mexico had already elaborated a clearly defined “Plan B” in case Trump carries through his threat and ditches Nafta.
Without offering many details, he said that faced with the prospect of paying WTO duties on the large amount of grain this country imports from the United States, Mexico would be able fall back on South American markets, such as Argentina and Brazil, although he acknowledged there would be many transportation issues to resolve.
Canadian officials expressed no surprise at Trump’s comments, suggesting they had expected him to throw a monkey wrench into the negotiations at some point, in a bid to try and unsettle the Canadian and Mexican teams, although perhaps not quite so soon.