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Feb 27, 2018 | 23:43 GMT

2 mins read

U.S.: Why Washington Won't Walk Away From NAFTA Yet

(Stratfor)
The Big Picture

Stratfor's 2018 Annual Forecast highlighted the possibility that U.S. legislators would step in to prevent the United States from abandoning negotiations over the North American Free Trade Agreement. Recently, U.S. Senator Orrin Hatch has said that Congress will take action to limit any withdrawal from negotiations, confirming that analysis. 

Congress has emerged to counter U.S. President Donald Trump's threat to leave the North American Free Trade Agreement. On Feb. 27, U.S. Senator Orrin Hatch said that Congress would take "veto-proof" action to save the deal if Trump decided to withdraw from the ongoing negotiations. The comments show that Congress will play a key role in shaping negotiations on NAFTA. Congress could craft (or threaten to craft) legislation intended to keep the president from withdrawing unilaterally.

Legislators are concerned about the impact of a NAFTA withdrawal, which would disrupt supply chains and impact U.S. agricultural exports to Mexico. That effect could create a backlash from voters and major economic groups that would hurt the re-election chances of some legislators. Lobbying from U.S. trade and agriculture organizations, as well as the Canadian and Mexican governments, are further influencing their positions.

The U.S. delegation will remain at the negotiating table if it believes walking away will cause a counterproductive showdown in Congress.

The U.S. delegation has maintained a hard line during negotiations, but pressure from Congress against a unilateral withdrawal could cause the administration to consider moderating its stance. The United States has so far been able to fend off pressure from Canada at the talks, but internal legislative resistance could prove impossible to counter.

NAFTA negotiations will likely be a long-drawn-out affair, but legislative support offers them a better chance of success. Canadian and Mexican negotiators can continue chipping away at sticking points with the knowledge that Trump cannot move against NAFTA without risking decisive action from Congress. And the U.S. delegation will remain at the negotiating table if it believes walking away will cause a counterproductive showdown in Congress. It's still possible for talks to fail, but continued negotiations will make it more likely for the three sides to overcome their key disagreements and progress toward a final agreement.

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