US President Trump speaks during Reuters interview in the Oval Office at the White House in Washington
Washington - President Donald Trump has told the leaders of Mexico and Canada that he will not pull out of the North American Free Trade Agreement (Nafta) at this time, just hours after administration officials said he was considering a draft executive order to do just that.

The White House made the surprise announcement on Wednesday in a readout of calls involving Trump, Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau.

“President Trump agreed not to terminate Nafta at this time and the leaders agreed to proceed swiftly, according to their required internal procedures, to enable the renegotiation of the Nafta deal to the benefit of all three countries,” said the White House.

Trump said that he “believes the end result will make all three countries stronger and better.”

Trudeau’s office issued a brief statement saying “the two leaders continued their dialogue on Canada-US trade relations, with the prime minister reinforcing the importance of stability and job growth in our trade relations.”

The White House announcement came hours after administration officials said Trump was considering a draft executive order to withdraw the US from the deal - though administration officials cautioned it was just one of a number of options being discussed by the president and his staff.

Some saw the threat as posturing by Trump to gain leverage over Mexico and Canada as he tried to negotiate changes to the deal.

Trump railed against the decades-old trade deal during his campaign, describing it a “disaster.”

The administration appeared to be divided on Wednesday over how and when to proceed, as officials balanced a newfound cautiousness with the desire to rack up accomplishments before Trump’s 100th day on the job.

Some were gunning for Trump to sign a draft order this week, while others were weighing the complications surrounding withdrawing from or renegotiating the deal without Congress fully on board.

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Trump could withdraw from Nafta - but he would have to give six months’ notice. And it is unclear what would happen next. The law Congress passed to enact the trade pact might remain in place, forcing Trump to wrangle with lawmakers and raising questions about the president’s authority to raise tariffs on Mexican and Canadian imports.

Trump said in an interview last week that he planned to either renegotiate or terminate Nafta, which he and other critics blame for wiping out US manufacturing jobs, because it allowed companies to move factories to Mexico to take advantage of low-wage labour.

“I am very upset with Nafta. I think Nafta has been a catastrophic trade deal for the US, trading agreement for the US. It hurts us with Canada, and it hurts us with Mexico,” he said.

A senior White House official declined to comment on “rumours” of specific actions.

But that official said Nafta has been a top priority for the president since day one and said the administration has been working on it since taking office.

The Trump administration last month submitted a vague set of guidelines to Congress for renegotiating Nafta, disappointing those who were expecting Trump to demand a major overhaul.

In an eight-page draft letter to Congress, acting US trade representative Stephen Vaughn wrote that the administration intended to start talking with Mexico and Canada about making changes to the pact, which took effect in 1994. 

AP