Trump agrees to NAFTA talks, no exit for now

After threatening to pull the US out of the North American Free Trade Agreement, or NAFTA, President Trump says he has changed his mind.

After a day in which media reports indicated President Donald Trump was considering signing an executive order that would have allowed him eventually to withdraw the United States from the North American Free Trade Agreement, the White House late Wednesday issued a statement that Trump had spoken with Canadian and Mexican leaders and decided not to move forward on withdrawal. But then Peña Nieto and Trudeau called him - that's important - and asked very nicely if a renegotiation might be possible.

Trudeau says the two agreed instead they could sit down and work on ways to make the deal better, a renegotiation process similar to what's been done in the past.

[Agriculture Secretary Sonny] Perdue even brought along a prop to the Oval Office: A map of the United States that illustrated the areas that would be hardest hit, particularly from agriculture and manufacturing losses, and highlighting that many of those states and counties were "Trump country" communities that had voted for the president in November. This came after it emerged that the Trump administration officials had been weighing whether to use an executive order that would effectively have led to the withdrawal of the United States from the trade pact. During the whole of his campaign and into his first couple of months in office, Trump railed against NAFTA, describing it as the "worst deal" ever and vowing to scrap it as soon as possible.

Canada buys more goods and services from the USA than any other country: $322 billion a year ago. I like both of these gentlemen very much.

"But we're going to give renegotiation a good strong show".

Canada sends 75 percent of its exports to the United States.

If NAFTA is renegotiated, supply chains in sectors such as clothing and autos could be thrown into disarray.

USA media reported on Wednesday that he was likely to give formal notice of pulling the United States out of NAFTA - and then came the White House announcement that the U.S. would renegotiate the agreement after all.

"They (U.S. legislators) pushed back. because they know the importance" of Canada-U.S. trade, said Brown.

Forty percent of all USA imports come through Southern California ports, and worldwide trade supports an estimated 4.4 million jobs in California, according to the Business Roundtable, an association of chief executive officers.

The president made the announcement at the end of a dramatic day following an evening phone chat Wednesday with Prime Minister Justin Trudeau, followed by another call with Mexican President Enrique Pena Nieto. Trump frequently bashed NAFTA on the campaign trail during the past year.

A copy of the draft order posted online by the Financial Times says Canada has "continued to exploit the American dairy and lumber industries". Relative calm returned on Thursday after Trump's comments, and the Mexican peso strengthened 0.86 percent against the USA dollar, while the Canadian dollar was flat versus the greenback.

In its statement, the White House said the leaders of the three countries had "agreed to proceed swiftly, according to their required internal procedures".