Chamber’s Donohue says withdrawal from NAFTA would be ‘grave mistake’

U.S. Chamber of Commerce President Tom Donohue on Wednesday touted the importance of global trade for the nation’s growing economy, arguing that abandoning trade deals would ultimately undermine the expansion.

A withdrawal from the North American Free Trade Agreement (NAFTA) by the Trump administration would be a “grave mistake,” Donohue said during his annual State of American Business speech in Washington.

{mosads}“The American economy has taken several big steps forward with regulatory relief and tax reform, and the administration deserves lots of credit,” Donohue said.

“But a wrong move on NAFTA would send us five steps back,” he said.

“The bottom line is growth will be weakened, not strengthened or sustained, if we pull back from trade.”

The same holds for the U.S. trade deal with South Korea, Donohue said.

“We agree that in some areas the Koreans need to do more to faithfully implement the deal,” he said.

“But overturning it would hurt American farmers and manufacturers and benefit only our foreign competitors.”

President Trump has repeatedly threatened to pull out of NAFTA and the 2012 agreement with South Korea if the United States doesn’t get bigger benefits from the pacts.

Negotiations are ongoing with Mexico and Canada on NAFTA and with South Korean trade officials to amend both agreements.

In the past, the Chamber has taken a hard line against the Trump administration’s negotiating tack on updating NAFTA, calling many of their proposals “dangerous.”

NAFTA talks are heading into their sixth round in Montreal later in January. 

Donahue also put trade with China at the top of the agenda this year, which includes examining Beijing’s market access, intellectual property theft and cybersecurity, among other policies.

“We need to work with allies in Europe, Japan and elsewhere to forge a common response to China’s state capitalism,” he said.

Trade with India should be a top priority, as well as tapping the potential of the Middle East and Africa, he said.

“The president says he wants more trade and more trade agreements. So do we. So we need to go back on offense.”