Trump backtracks on Nafta withdrawal vow in favour of renegotiation

US President Donald Trump has ruled out the departure of the country from the North American Free Trade Agreement, despite previously pledging to withdraw from the deal.

The White House announced on Wednesday that following talks with Mexico and Canada, the US would now seek a renegotiation of the trade deal, which Trump has claimed benefits the other two states more than American trade.

The Republican spoke with Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau in what were described as “pleasant and productive” conversations.

"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," the White House said in the statement.

The Republican spoke with Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau

Trump's relationship with Mexico in particular has been fraught after claims from the former reality television star that the US is going to build a wall on the border between the two countries, as well as introducing new trade tariffs on Mexican imports.

The Mexican peso and Canadian dollar both gained following the announcement.

"It is my privilege to bring NAFTA up to date through renegotiation," Trump said in an accompanying statement.

"It is an honor to deal with both President Peña Nieto and Prime Minister Trudeau, and I believe that the end result will make all three countries stronger and better."