Steven Mnuchin warns of NAFTA pullout if talks fail

January 12, 2018

Treasury Secretary Steven Mnuchin explicitly warned Thursday that the U.S. would pull out of the North American Free Trade Agreement if the administration doesn't get what it wants in current renegotiations.

[Sean Higgins | January 12, 2018 | Washington Examiner]

"We expect that will be renegotiated, or we'll pull out," he told reporters during a Thursday White House briefing. It was the first explicit threat from a top administration official tied directly to the ongoing talks.

The sixth round of negotiations among the U.S., Canada, and Mexico regarding the 1993 trade deal are scheduled to begin Jan. 23 in Montreal.

President Trump, a longtime critic of NAFTA, has threatened to pull the U.S. out of the deal, and was reportedly on the verge of signing an executive order to do so last April. He was talked out of it by top Cabinet secretaries and the leaders of Canada and Mexico on the promise that an updated version of the deal could be reached.

The NAFTA renegotiations have been strained. Canadian and Mexican officials rejected U.S. demands to change the rules for determining when a product can be labeled as "made in America" or "made in the U.S.A.," arguing that the changes would damage the auto industry, whose supply chain is spread throughout the continent, according to an official with knowledge of the talks. The administration is also pushing to add an end date to NAFTA as well as to allow countries to opt out of its investment dispute settlement system, changes the trading partners also object to.

Canadian officials on Wednesday told Reuters they are increasingly convinced that Trump would pull the U.S. out of NAFTA, while Mexican officials said the country would pull out of the free-trade deal if the U.S. does.

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