Trump won't scrap NAFTA for now

Trump won't scrap NAFTA for nowU.S. President Donald Trump has told Mexico and Canada he wants to renegotiate - not scrap - the North American Free Trade Agreement, The BBC said on Thursday.

Media reports on Wednesday had suggested Trump was drafting an executive order to end the pact.

During his election campaign, Trump called NAFTA the "single worst trade deal ever" and a "killer" of U.S. jobs.

The reversal surprised markets, sending the Mexican peso and Canadian dollar higher after losses earlier this week.

The White House said it had "agreed not to terminate NAFTA at this time" and that the Mexican and Canadian leaders had "now agreed to proceed swiftly to renegotiate... to enable the renegotiation of the NAFTA".

Trump's comments on NAFTA come just days after the U.S. imposed a new tariff on softwood lumber coming from Canada. He also called a new Canadian tariff regime affecting U.S. dairy products a "disgrace".

On Tuesday, the U.S. lost a trade battle with the other NAFTA signatory.

The World Trade Organization ruled that Mexico could impose more than $160m annually in sanctions against the U.S. on commerce in tuna, capping a dispute dating back to 2008.

Early in his presidency, Trump fulfilled a campaign pledge by signing an executive order to withdraw from the Trans-Pacific Partnership (TPP). The 12-nation trade deal was a linchpin of former President Barack Obama's Asia policy.
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