OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau said on Thursday he had urged U.S. President Donald Trump not to withdraw from the North American Free Trade Agreement because it would cause a lot of pain on both sides of the border.
The White House said earlier that Trump told the leaders of Canada and Mexico in separate calls on Wednesday that he would not terminate the NAFTA treaty at this stage, but would move quickly to begin renegotiating it with them.
Trump, who says NAFTA has been a disaster for American workers, has threatened several times to walk away from the three-nation pact unless major changes are made. Mexico is the third member.
“He (said on the call) he was very much thinking about canceling and I highlighted quite frankly ... that a disruption like canceling NAFTA, even if it theoretically eventually might lead to better outcomes, would cause a lot of short and medium-term pain,” said Trudeau.
“That’s not something that either one of us would want so we agreed that we could sit down and get to work on looking at ways to improve NAFTA,” Trudeau told a televised news conference in Gray, Saskatchewan.
Any move to break up NAFTA would cause great economic damage to Canada, which sends 75 percent of all its exports to the United States.
Trump’s administration has yet to formally advise the U.S. Congress of its intention to open negotiations.
A Canadian source familiar with the matter said Trudeau had added in his comments to Trump that pulling out of NAFTA would be counter-productive.
Canadian officials have so far taken a largely restrained attitude to Trump’s harsh language on NAFTA, describing it as a negotiating tactic ahead of the talks.
That said, government ministers have made clear Canada could slap sanctions on the United States if it decided to impose protectionist measures such as a border tariff.
Trudeau, asked about possible trade retaliation, said Canada preferred to work with the United States constructively but added: “There’s no question there’s a broad range of options and paths available to us that we’re looking at.”
He did not give details but the Trump administration on Monday moved to impose tariffs on imported Canadian lumber that mostly feeds U.S. homebuilding.
Reporting by David Ljunggren; Editing by Tom Brown