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White House chaos has weakened Trump’s NAFTA hand

President Donald Trump walks across the South Lawn of the White House in Washington, Wednesday, May 17, 2017, following his short trip on Marine One from nearby Andrews Air Force Base, Md.

Pablo Martinez Monsivais/AP Photo

It's here: that moment when Donald Trump formally tells the Congress he is going to renegotiate the North American free-trade agreement.

It is a panic-inducing moment for many in Canadian business, for workers in cross-border industries such as the auto sector and for Liberal politicians in Ottawa, who have to fear that the decades-old trade-rules platform that supports 75 per cent of Canadian exports is about to burn. It's a blast of unsettling chaos.

But Mr. Trump has taught us all a lot of about chaos in recent months, and one lesson is this: The U.S. President doesn't control it, either.

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Guide: The countdown to NAFTA talks has begun. What's going on?

After months of it, the politics of NAFTA negotiation are looking a lot better for Canada.

Mr. Trump is already an embattled president, struggling to get an agenda through Congress, and starting to lose the support of some Republicans.

When he came into office promising to tear up NAFTA if he didn't get a better deal, he was a populist who had defied all to win. Republicans felt they had to line up behind him, and many Democrats were already skeptical of trade deals.

Now, with a chaotic White House, the firing of the FBI director, the investigation into possible collusion with Russians – many Republicans are thinking about constraining him or ditching him. Democrats aren't eager to hand him wins.

Mr. Trump's erratic style has weakened his NAFTA hand, too. Remember that flurry when the President nearly triggered a U.S. withdrawal from NAFTA to mark his 100th day in office? That didn't just scare Justin Trudeau's government in Ottawa and Mexico's Enrique Pena Nieto – it alarmed many Republicans in Congress.

Senate Majority Whip John Cornyn and both senators from Arizona warned against it; Nebraska Republican Senator Ben Sasse called it "dangerously bad." Others voiced worry about sudden withdrawal from NAFTA, including most of the Texas congressional delegation and South Dakota Senator John Thunes. Congressional leaders weren't courted; they were surprised.

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That's important because Mr. Trump, as President, probably doesn't have the constitutional authority to withdraw from NAFTA, and he can expect opposition in Congress if he tries again.

Jon Johnson, a former adviser to Ottawa on NAFTA talks, argues the constitutional power over trade belongs to Congress, and though it delegates negotiation to the U.S. Trade Representative, it never delegated the power to withdraw. NAFTA allows for the United States to withdraw on six months' notice, but it doesn't give the president the power to trigger that withdrawal.

If Canada and Mexico refused to negotiate, Congress might back him, Mr. Johnson said. But it would probably be hard to get congressional approval for an abrupt termination. That makes the negotiations more of a give-and-take.

It also makes Congress key. Cross-border trade matters more to the economies of Canada and Mexico, and many in Congress are protectionist – but many of their districts would have losers if NAFTA were suddenly blown up.

When Mr. Trump was thinking of triggering withdrawal, Agriculture Secretary Sonny Perdue showed him a map of areas that would be affected by a trade war, noting they overlap with Mr. Trump's base. They are congressional constituencies, too. Mexico is now a big market for corn from Iowa, Minnesota and Nebraska, but those exports would again be slapped with 30-per-cent tariffs if NAFTA were killed. That's not the biggest U.S. trade interest – but it will make noise in a few congressional districts, and there are many more like it.

That, presumably, is one reason why Foreign Affairs Minister Chrystia Freeland is going to Mexico next Tuesday: to work on using those pro-NAFTA spots to press Congress and cool threats to kill NAFTA. Both countries will also want to co-ordinate demands. And it would be worth exploring another angle: finding wins for Mr. Trump.

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Mr. Trump wants to claim progress on protecting U.S. jobs. His Commerce Secretary, Wilbur Ross, has talked a lot about tightening rules of origin, for example, to ensure that autos coming into the U.S. under NAFTA aren't full of Asian car parts. Canada and Mexico could work on a deal that doesn't deeply hurt their economies but allows Mr. Trump to claim a win. If Mr. Trump knows it could be hard to withdraw, a failed negotiation is just a failure, and he now has a lot of reason to claim a renegotiation victory.

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