NAFTA deal ‘fairly close,’ Trump says

Washington (AFP) – President Donald Trump said Monday negotiators were “fairly close” to resolving their differences over the future of the North American Free Trade Agreement but an outright US withdrawal was still possible.

Officials in Washington and Mexico City have played down expectations a deal could be unveiled later this week when representatives of the US, Canada and Mexico attend the Summit of the Americas in Peru.

“We’ve made tremendous progress. We’re fairly close on NAFTA,” Trump said at the White House.

“If we don’t make the right deal, we’ll terminate NAFTA and make the right deal after that.”

Trump’s repeated threats to exit NAFTA have unnerved US industry and members of his fellow Republican Party who say the 24-year-old trade pact has benefited American industry and agriculture.

But Trump rose to the White House on a tide of economic nationalism and has called NAFTA a “disaster” that has destroyed US jobs.

Canadian and Mexican officials have balked at American demands to raise US content requirements in auto-manufacturing, scrap a dispute resolution mechanism and put a five-year “sunset” clause on the trade agreement.

However, officials have sounded optimistic following recent talks, citing progress in reaching common ground.

“At this point, we don’t anticipate substantive discussions on NAFTA at the summit,” a White House official told AFP on condition of anonymity ahead of the summit, which kicks of Friday in Lima.

Mexican Economy Minister Ildefonso Guajardo also said Monday the odds of reaching a deal by early May were high — thus ruling out an agreement this week.

“There is a very high probability — 80 percent,” Guajardo told Mexican TV network Televisa.

– ‘I wouldn’t say that’s nice’ –

Trump on Monday also acknowledged the escalating US confrontation with major trading partners could have painful blowback for the US agricultural sector.

Farm groups have lobbied fiercely against the Trump’s plans to impose tariffs on Chinese and European exports, saying retaliation by those countries could hurt US farm states the most.

Responding to US tariffs on aluminum and steel, China has put tariffs on US pork and other exports and has threatened to do likewise for US soybeans, a third of which are exported annually to the giant Asian market.

With Republicans facing strong headwinds ahead of November’s congressional elections, analysts say disaffection in reliably conservative agricultural regions could jeopardize the Republican majority in Congress.

“If during the course of a negotiation they want to hit the farmers because they think that hits me, I wouldn’t say that’s nice,” Trump said at the White House.

“But I tell you, our farmers are great patriots,” he added. “These are great patriots they understand that they’re doing this for the country and we’ll make it up to them and in the end.”