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The Trump Administration Is Making Progress on NAFTA ‘Behind the Scenes’

April 24, 2017, 5:24 PM UTC

U.S. President Donald Trump’s administration has adopted a “constructive” approach to NAFTA behind the scenes, despite headlines to the contrary, the head of the biggest U.S. business lobby said in a speech in Mexico on Monday.

Thomas Donohue, president and chief executive of the U.S. Chamber of Commerce, said his organization has been urging the Trump administration to amend but not end the North American Free Trade Agreement, and would not stop until the deal with Canada and Mexico was strengthened.

“I want to assure you that despite what you may see in the news, or hear in the news, there is a constructive process underway behind the scenes,” Donohue said in a presentation at the American Chamber of Commerce of Mexico.

The comments should help soothe government officials and business leaders in Mexico irked by Trump’s repeated promises to ditch the trade deal if he cannot negotiate better terms for the United States.

Trump reiterated the threat last week, insisting that “some very big changes” are needed for the United States to stay in NAFTA – putting pressure again on Mexico’s peso.

Donohue told Reuters on Sunday evening that he believed a basic deal on a reworked NAFTA could be agreed by mid-2018.

The chamber clashed with Trump before he took office in January, saying his proposals, especially on trade, would push up prices, kill jobs and weaken growth.

But Donohue said he has been “very encouraged” by recent meetings with U.S. Commerce Secretary Wilbur Ross, U.S. Secretary of State Rex Tillerson and U.S. Vice President Mike Pence.

Trump’s tough campaign rhetoric has given way to pragmatism, said Donohue, citing Trump’s softened stances on China and NATO.

“Reality is setting in for the president,” Donohue said. “We are encouraging the administration to take the same pragmatic, fact-based approach to NAFTA.”

The chamber wants the United States to work quickly to update NAFTA by using the deal’s amendment process to avoid delays that could suppress economic growth and fuel political risks. Any deal must be trilateral, Donohue added.

Mexico’s presidential elections next year could complicate NAFTA talks, especially if candidates hostile to Trump win.

Donohue said the trade deal, which came into effect more than two decades ago, had made North America the world’s most competitive region, that millions of U.S. jobs relied on the trade deal and that in the past seven years alone U.S. exports to Mexico had grown by more than $100 billion.