February 7, 2018 / 9:20 PM / 2 years ago

U.S. senators express optimism about NAFTA after Trump meeting

WASHINGTON (Reuters) - Republican U.S. senators left a trade-focused meeting with President Donald Trump on Wednesday expressing optimism that Trump is less likely to scuttle the NAFTA trade pact than previously feared, and would press ahead with talks to modernize it.

FILE PHOTO: Senator Orrin Hatch (R-UT) arrives on Capitol Hill in Washington, U.S., January 22, 2018. REUTERS/Joshua Roberts

Senate Finance Committee Chairman Orrin Hatch said Republican members of the panel told Trump that preserving the North American Free Trade Agreement was “vital” for U.S. jobs and that weakening the agreement would “jeopardize American economic growth.”

“We committed to working with the president to improve and modernize the agreement,” Hatch said, in a statement released after the meeting.

Trump has repeatedly threatened to end the 24-year-old trade pact if it cannot be renegotiated to terms that shrink U.S. trade deficits with Canada and Mexico and return jobs to the United States.

He has said that terminating NAFTA could result in the “best deal” for the United States.

Hatch later told reporters that Trump gave senators no guarantee that he would not quit NAFTA.

“But I think he wants to do NAFTA,” Hatch added, referring to a modernization deal.

Ongoing NAFTA negotiations have less than two months to run before the official start of Mexico’s presidential election campaign in April, with two scheduled negotiating rounds remaining. Deep divisions persist over automotive content rules, dispute settlement mechanisms and other issues.

The senators meeting with Trump were largely pro-trade Republicans, including several from farming states who have expressed concerns that a NAFTA exit would seriously damage U.S. agricultural exports.

Hatch also said the senators “discussed the mutual desire to confront the challenges China poses to American businesses and workers.”

While offering no specifics of how these issues could be tackled, Hatch said Trump has a “bold vision” and would work with the White House to advance trade policies that help grow the U.S. economy and U.S. jobs.

Senator John Cornyn, the second-ranking Senate Republican, told Reuters after the meeting that he is “more optimistic” that Trump won’t terminate NAFTA.

He said the senators emphasized NAFTA’s importance to the U.S. economy and cautioned against trade moves that would reverse economic progress fostered by tax cuts passed by Republicans in December.

“We just encouraged him to continue to modernize NAFTA,” Cornyn said.

Cornyn said that making progress in the next few weeks would be important to a successful NAFTA deal, as Trump was “very aware of the election in Mexico and not wanting to have an untoward effect on that.”

The White House said in a statement that Trump discussed “ways to promote fair and reciprocal trade” with the senators. It did not reveal any details of the discussion, but added that Trump “appreciates hearing the perspectives of his friends on the Finance Committee and will continue to consult with them.”

Additional reporting by Ayesha Rascoe; Editing by Jonathan Oatis and Rosalba O'Brien

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