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Trump administration considering removing U.S. from NAFTA

Amid a bubbling trade dispute over softwood lumber and dairy with Canada, the Trump administration is now considering an Executive Order on withdrawing from the North American Free Trade Agreement, two White House officials confirmed to CBS News. 

This executive order is one of several ideas being considered by President Donald Trump as the administration readies to move forward on Mr. Trump’s campaign trail pledge to renegotiate or withdraw from the three-nation trade deal, a White House official says. 

The executive order could be unveiled in short order. A White House official says the administration is waiting until attorney Robert Lighthizer, a noted protectionist, is confirmed as Mr. Trump’s U.S. Trade Representative before going to Congress for fast track authority to renegotiate the treaty, resulting in a formal 90 day notice to Mexico and Canada.   

The White House could also bypass Congress to remove the U.S. from NAFTA. Such a move would require a written notice to other parties in the treaty six months before implementation, and would likely revert U.S. tariffs on Canadian goods to 1989 levels due to a free trade treaty the two countries signed that year. 

Is the U.S. headed for a trade war with Canada?

Drafted by Peter Navarro, director of the National Trade Council, with help from chief strategist Steve Bannon, the order would be a win for advocates of economic nationalism in Mr. Trump’s White House. 

As trade discussions with Canada have intensified in the week leading up to Mr. Trump’s first 100 days, the order may be a hardline negotiation tactic with the aim of reaching a better agreement. 

In February, Mr. Trump appeared alongside Canada’s Prime Minister Justin Trudeau at the White House and called their trade relationship “outstanding,” promising a “very fair deal” for both Mexico and Canada. 

“We’ll be doing certain things that are going to benefit both our countries. It’s a much less severe situation than what’s taking place on the southern border,” Mr. Trump said during a press conference. 

But last week in Wisconsin, Mr. Trump toughened his tone, threatening to get rid of NAFTA “once and for all” — followed by the administration’s move to slap a 20 percent tariff on Canada’s softwood lumber and a dispute over American dairy exports. 

Congress has not weighed in on this draft Executive Order, according to a White House official, and it’s unclear whether or not Mr. Trump would receive Congressional approval. Senator John McCain, R-Arizona, told CNN on Wednesday that withdrawing from NAFTA would “devastate the economy” in his home state. 

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